How Dropbox Grew 3900% Using Referral Marketing | Hacker Noon

@Sarah.LeeSarah Lee

Sarah is a freelance editor, a SaaS and Marketing-driven specialist.

Dropbox’s referral marketing campaign is infamous. The company grew 3900% in 15 months between 2008 and 2010. How did they do it? Learn how in this Dropbox case study – and what you can learn from their example. 

The timeline

Dropbox is a file storage and sharing service that released its first product to customers in 2008. When the site launched, it achieved modest growth – registering 100,000 users by September 2008. 

A Slideshare presentation by Drew Houston, the co-founder and CEO of Dropbox, outlines Dropbox’s market position when they began the campaign. Houston reports that in 2008 it was a crowded market; there were lots of competitors and SaaS start-ups selling products to companies and individuals at the time. Dropbox itself was mostly staffed by engineers at the time, not marketing gurus.

The company considered a few different traditional digital marketing options before realizing that referral marketing was already working for them. By December 2009, Dropbox had four million registered users. By 2017, they had 33.9 million users, plus a $10 billion valuation and $1 billion in revenue. That’s how powerful their referral campaign really was.

The campaign

How was Dropbox’s referral campaign structured? Dropbox set up a double-sided reward, where the participant and the person who they refer are both rewarded. Dropbox was hoping to gain traction with a new product. It needed to get people to sign up for storage space on the cloud. 

Its incentive, therefore, was to reward participants with more free space not just for referring their friend, but also for accepting an invitation.

“In addition to the referred member getting benefits, the referrer was given extra storage space (a key component of product enjoyment),” reported Entrepreneur. This meant that participants were encouraged to try the product, realize that it worked well, fall in love with it, and then share it with others.  

The program permanently increased signups by 60%, with more than 2.8 million direct referral invites sent the first 18 months. 

Lessons from the Dropbox Case Study

Interested in replicating this success for your business? Take these key lessons from the Dropbox case study. 

Pick an incentive that aligns with your brand. 

Houston says that the structure of Dropbox’s referral program was inspired by a similar one set up by Paypal. Paypal offered cash incentives for participants who signed up a friend; that makes sense, as Paypal is primarily a peer-to-peer cash transfer platform. 

For Dropbox, their incentive needed to accomplish two things: give the participant something they wanted, and validate their product efficacy for a large market. More cloud storage is a win-win for Dropbox, a referral participant, and their friend. What can your company offer participants that creates value while building brand loyalty?

Make it easy to refer others

Dropbox made it easy for referrers at a few key points. Firstly, their call-to-action was part of the sign-up process. It invited a user to become a referral participant while they were already excited about the product and willing to spread the word 

Secondly, Dropbox made it possible to invite your friends and family to sign up without too many clicks. Referral links could be sent via any messenger app, email, social media, SMS, and more. It even offered a way to sync your contacts from Gmail, AOL, Yahoo!, and other mail providers to share your link without having to cut and paste individually. This is where a referral marketing software tool can make setting up your campaign so easy!

Tell participants where they stand

A final component of Dropbox’s campaign that contributed to its success: an invite status dashboard. Participants could see from their Dropbox account how many of their invited friends and family had completed the sign-up process, thereby granting that participant extra storage. It motivated users to follow-up on invites or send the link even more frequently to get even more storage space. 

Referral marketing software can come in handy here, too. Tools like GrowSurf show you, the company, a timeline of a participant’s activities: when they signed up, who they referred, and how many referrals turned into customers. You can send updates to participants letting them know each month how successful they were, or set the platform to automate rewards. 

Dropbox’s referral marketing campaign is admirable, but by no means irreplicable. All it takes is knowing your audience, offering the right incentive, and having the right tools in place to manage your referrals as they start to grow

This is an exclusive original content contributed to Hackernoon.com written by Emily Heaslip and Kevin Yun. Submitted with permission.

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Sarah is a freelance editor, a SaaS and Marketing-driven specialist.

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