Here’s What Great Referral Email Campaigns Look Like
How to make your referral email campaign work? Here are tips we've compiled from experts!
Do you go to that food joint a couple of blocks away that has 50 different things on the menu?
Or do you go to that small pizzeria that sells only pizza ... and from a wood-burning pizza oven ... and according to a traditional Italian recipe ... and so on?
You know the answer.
So the real question here is why?
What makes the pizzeria so special and so appealing in comparison to the other place that also has pizza on the menu?
The answer: positioning.
The pizzeria has positioned itself as a place that's obsessive about one thing.
They specialize in pizza. They live and breathe pizza. Their chefs are pizza maestros.
This conveys a really strong message to the consumer: If you want good pizza, go to that place.
Most of the time, your customers don't want to buy a number of things from you. They have a specific problem, and they'd like the best possible solution for them. They don't care that much about what else you might have in store.
As an entrepreneur, you're naturally tempted to juggle many balls and to try bringing a full range of products (or services) to perfection before you reach out to your first customers. You just want to be sure that no matter what a customer might want, you have.
But this turns out to be a dangerous game to play.
In fact, I don't think there was anyone who managed to pull it off in the history of ever. Even Facebook started out exclusively for Harvard students.
Today, Facebook is so large that it's hard to remember that it started with a handful of people– which makes it hard for regular business owners to relate to them.
So let's take a look at some of the other guys - businesses that dominated early on to then expand and secure their place on a bigger market, plus how you can emulate them.
[caption id="attachment_16345" align="aligncenter" width="600"]
ndy Dunn of Bonobos | Photo: Alexander Thompson[/caption]
Designers and merchants and founders think about collections. Consumers think about items. Designers and merchants and founders think about one-stop shops. That kind of thinking may lead you to a no-stop shop.
Consumers don’t need many things from your brand - they just need one thing from your brand. You may want them to need everything from your brand, but guess what: consumers don’t care what you want. Your job is to care about what they want, not what you want them to want.
Six months after Bonobos first launched their ecommerce store, they were already at a $1 million revenue run rate.
But let's go back a bit.
The no.1 thing that Andy and his co-founder Brian Spaly wanted to do when they started out was to solve a specific problem.
According to their local market research (surveying their Stanford business school classmates), it turned out that nearly all guys didn't like their pants very much. Most store-bought stuff didn't fit, didn't look good and didn't make the person feel good in general.
So they set a goal to fix this issue and create something that does fit.
They didn't set out to create a whole spring collection of clothing or anything. They just wanted to get one pair of pants right, and then sell that to people directly.
Because of their one product being better than what the big brands were offering at the time, people started buying. And it was such a superior experience that they'd tell all their friends.
Through word-of-mouth, more people found out about Bonobos and more people got interested in what the company was all about.
Andy shares that at some point, 90 percent of customers who tried on the pants ended up purchasing, and that 25 percent of customers purchased three or more pairs.
Clearly, Bonobos did get that one thing right.
Fast forward a couple of years and Bonobos is an entirely different company. If you visit their site, they offer a whole collection of things. Pants, shirts, suits, shoes, you name it.
But it all started with pants.
Takeaway: Worry about getting one thing right.
Just one product that's awesome and solves a specific challenge. Expand only once you master the art of selling that one product.
TaskRabbit lets you find people willing to take care of a range of small tasks around the house (in exchange for money, obviously).
You can use TaskRabbit to find someone to mow your lawn or help you move some stuff to a new apartment. Or, you can go the other path, create your own listing and start helping other people as a service provider.
Even though the idea is quite niche, Leah Busque - the founder of the company - knew that it still wasn't niche enough.
If anyone was to start talking about it, they needed to target a small geographical areas first. Or even better, target specific demographics within those areas.
So they chose to go with Boston first, and targeted a group that's often out of time due to the myriads of tasks that need to be taken care of every day - moms.
It worked. Those first users started sharing the site with their friends, and through word-of-mouth the TaskRabbit brand was established.
Currently, TaskRabbit operates in 19 cities (mostly in the US + London), has raised nearly $40 million in venture funding, and has sights set on expanding even further.
Would it have worked if they had targeted the whole world right away? You answer.
Takeaway: Niche-down by going local.
Learn how to serve a specific community in a specific area.
Take notes, put your hours in, and expand only after you have a good grasp on the real needs and problems that your original user base faces.
SendinBlue is an email marketing tool (made in France) that's slowly catching up to the giants on the market such as MailChimp or AWeber.
And they didn't even start out doing email marketing. They started out as a web development agency.
While working on their client projects, they noticed that there was a need for a clever email marketing tool that could be used by small businesses.
Their clients simply wanted to have something that they could use themselves, even if they lacked experience in email marketing. Nothing fancy. No extreme bells and whistles.
So the SendinBlue team started developing a tool that would meet those needs.
Once a prototype was ready, the distribution was done in a similar one-by-one manner. Each client got access to the platform, and very soon the word (of mouth) about the product did spread.
Amalia Bercot - the CMO of SendinBlue - attributes the company's ability to grow into an all-in-one platform that it is today to this early strategy. Here's what she said about SendinBlue's current offering:
With the current version of SendinBlue, SMBs can manage their every email and SMS marketing campaign from A to Z in one place. The platform is available in six languages and serves customers in more than 80 countries.
The takeaway: Take notes of your clients' individual needs.
After a while, patterns will pop up. Notice them and think of a product that would be able to solve a problem that a number of clients all share.
You probably know Under Armour as this huge company that sells sports clothing all across the globe.
This won't surprise you at this point, but Under Armour started very small. In fact, it only took $17,000 to launch the company.
The company was founded in 1996 by a former football player Kevin Plank. Similar to how Bonobos started with a pair of pants, UA started with a compression shirt.
Specifically, Kevin was fed up that his cotton shirts were dripping with sweat whenever he spent more than a couple of minutes playing football.
So he decided to change it.
He came up with a compression shirt that remained dry at all times (no matter how much you sweat), invested the aforementioned $17,000 in product development and got 500 shirts to show for it.
He distributed them to his former teammates, and they all loved them. In a standard success-story manner, one thing led to another and the rest is history.
The takeaway: Start with your own frustrations.
The things that make you angry about the products you use, the services you buy. Help other people solve the same frustration. Make it small. Make it really work. Gain confidence, and then expand.
In the end, playing the "make it small" game seems very counterintuitive. We're naturally tempted to try taking over the world and building the a full assortment of the best products ever, all on our first attempt.
But in practice, as shown by countless examples of successful companies out there (including the four on this list), having a really narrow focus does pay off.
In a nutshell, it's always better for a new business to "sell a lot of one thing, not a little of a lot of things" - quoting Andy Dunn one more time.
So what's your take here? Does starting small sound like a viable strategy for *every* business?