The most famous referral success stories are outliers.

The well-known referral programs that grew brands like Airbnb and Dropbox are highly unlikely to work for your startup.

In fact, instead of trying to "build a successful referral program," you should be focused on finding your company's viral loop.

Examples:

• If you run an ecom pet store, your viral loop might be getting dog owners to post pictures of their dogs on Instagram (with you tagged).
• If you're in EdTech, your viral loop might be a bustling community where eager students get free course credits when they invite their classmates.
• If you're a SaaS founder, your viral loop might be a freemium tier where your customers include your badge in their footer.

There are no one-size-fits-all solutions. You have to dig into what your product offers and align that with an incentive that increases your exposure.

Common startup mistake: Asking customers to refer their product at the end of the sales process, before they've even tried the product.

That’s like asking someone if they’d recommend a movie as they’re waiting in line to go watch it.

It's ineffective and will lead to a low adoption rate and annoyed customers.

Instead, look for moments when rapport is high between you and your customer:

1. Right after your customer gives you a high Net Promoter Score on a follow-up survey.
2. When your customer renews for another billing cycle.
3. When your customer actively engages with your marketing efforts (replies to an email newsletter, sends a social media DM, or comments on a post).

It’s in these trigger moments when your business is top of mind for your customer. Use that to your advantage by engaging them in your referral program.

To get referrals to work, you need your incentives to check three boxes:

1. Your customer acquisition cost (CAC) must be less than the lifetime value of that customer (LTV). This is obvious.
2. The referrer's incentive needs to be desirable enough that your customers take action.
3. The referral's incentive needs to be desirable enough that they convert.

Different business models call for different incentives. Here's what we've seen work best:

• For B2B: Tailored personal rewards work better than discounts. A gift card to a local restaurant works better than 20% off your product since B2B customers are employees—they're more motivated by personal incentives.
• For Ecommerce: Discounts or cash offers work because there is a direct benefit to the customer. But your cash incentive needs to be significantly large enough to drive action. $5 off typically doesn't cut it.
• For SaaS: Offer greater access to your core product—that's what users come to you for. So give them more of it. E.g. Dropbox offers referrers more storage. 

Common startup challenge: Your product solves a problem that people don't know they have yet.

For example, no one knew they needed an Uber–they thought they needed a taxi.

When planning your go-to-market strategy, choose a marketing channel that:

• Allows you to get in front of a lot of your target customers, quickly
• Allows you to get in front of your target customer, inexpensively

There are seven ways people learn about new products:

1. Word-of-mouth: through friends, family, and colleagues
2. While browsing online, organically: SEO article, social media recommendation
3. While browsing online and seeing a promotion: Facebook, Instagram, YouTube ad
4. Offline, organically: seeing a product on the shelf, someone using it
5. Offline and seeing a promotion: billboard, posters, samples
6. While at home, seeing a promotion: direct mail
7. Someone reaching out to you: direct sales

Go through all seven ways people learn about new products and list all the channels that are possible. For each channel, ask: How quickly and cheaply can I reach my target customers? How many are there?

This exercise will clarify which marketing channels will be most effective for your go-to-market strategy.

Most marketers skip a key step in the growth process while running A/B tests.

Everyone looks at quantitative data. That's easy. Your analytics platform will show you which A/B variant had a better conversion rate.

But few dig in to figure out why a given variant won.

Two approaches to determining the why:

1. Use heatmaps: Tools like Hotjar will help you figure out why certain variants won. Were users distracted by a suboptimal CTA in one variant? Maybe users bounced before scrolling past the top half of your landing page?
2. Survey customers who were impacted by the test. You can use tools like SurveyMonkey to set up automated survey emails that trigger post-purchase. Ask questions that help you determine what aspect of your test variable got them to purchase.

Figuring out why each variant wins will inform your next tests: It's what keeps your growth flywheel spinning.

Most SaaS apps lose 95% of new users within 90 days. A majority of these users drop off before they finish onboarding.

When customers fully onboard, they're more likely to stick around and pay for your product. One way to encourage them to complete onboarding? Give them a quick win.

Example: After logging in to Quora for the first time, a new user sees a checklist called “Set Up Your Account.” The first step, “Visit your feed,” is already checked. The user has accomplished something just by signing up.

People are more motivated to keep going if they think they’ve already accomplished something. Early in the onboarding process, keep motivation high with quick wins and reminders of what the ultimate big win will be.

• Keep the “job-to-be-done”—what users will get out of the onboarding process—front of mind. Airbnb’s host signup page shows you what your monthly earnings could be if you complete the steps to rent out your home.
• In your welcome email, don’t waste precious space on a “thanks for signing up.” Remind them of how your product will benefit them once they’re fully onboarded.

Tip from behavioral psychology: people place a higher value on things that they have a hand in creating. If you allow people to customize your product, they'll either 1) convert at a higher rate, or 2) pay more for it.

Two examples of customization in practice:

Ecommerce: Converse allows shoppers to choose the color, shape, and star placement of their famous All-Stars.

SaaS: Slack lets users customize their setup with bots and integrations. Customization in SaaS doubles as a retention driver — switching costs rise as users integrate other tools.

Here's the lesser-known benefit: customization generates valuable data. Take Converse. If people self-select one particular color or style more than the rest, Converse can use that data to create a core product line.

Failed payments can be a quiet cause of unnecessary churn.

Even very successful startups like Segment have said that non-payment can account for up to 50% of total churn in a given week.

If you sell subscriptions, use this process to reduce churn. (This can be automated.)

• When a card fails, retry the card-on-file again before emailing your customer. Over 20% of payments are resolved by retrying the card before sending emails.
• When you do need to reach customers, email them a mobile-friendly link without a password so they can easily give you their new card details.
• If customers don't engage with your email, send an SMS.

Your customer acquisition efforts aren't optimized without a heavy focus on retention. Limit failed payments to fix a leaky bucket. 

Cold email works better when your targets already know who you are.

So unless your startup is a household name, you might consider pre-targeting: Run ads to a specific list of email addresses before reaching out to them. 

Pre-targeting can boost open rates and response rates because it makes your company feel more known—especially in industries with large, older companies (like government, manufacturing, supply chain, and real estate).

How to run a pre-targeting test:

• Pull a list of at least 1000 emails. Call this group A.
• Then pull another list of 1000 emails. Group B.
• Run ads on LinkedIn and Facebook and directly upload the group A list (you’ll want to use “Direct Audiences”). Then email group A.
• Email Group B without running ads.

See which group responds and converts better.

Final tip: When optimizing your pre-targeting campaigns, consider choosing the Awareness objective on your ad platform. You just need your prospects to see your ads—not click. It’s cheaper because fewer advertisers bid on awareness ads.

More people read emails on mobile as opposed to desktop.

If you're not truly creating mobile-first emails, your campaigns aren't fully optimized. 

The good news is that it's easy for email clients & ISPs to automatically adapt mobile-first designs to desktop whereas the opposite is not true. So if you optimize for mobile, your design looks sharp regardless of the device.

Here's how you create great mobile-first emails:

1. Write short subject lines to prevent them from getting cut off on mobile.

2. Keep the design clean to make it easy for readers to engage the content:

• Narrower design with plenty of negative space.
• Bigger, legible fonts.
• Larger, easy-to-click CTAs.

3. Use small files only. Many mobile devices are running weak processors. Prevent people from bouncing due to slow load times by compressing your image files.

4. Send a test and read it on your own phone before scheduling.

There's often a disconnect—marketers use desktop platforms to create and send emails. It's easy to overlook mobile when you're working from a computer.

Some social proof is better than none.

According to a major ecommerce study, a seller with negative reviews and poor photos is more likely to outperform a seller that has zero information.

Chew on that for a second.

Zero information leads to distrust, while negative information facilitates a neutral level of trust.

This finding illustrates the importance of “uncertainty reduction.” That is, people require information to feel more trust about something.

That’s not to say you should actively seek out bad reviews. Rather, understand that having no reputation or photos whatsoever may preclude sales.

Most call to action (CTA) buttons aren't compelling enough. Here's how you can improve yours:

Successful startups describe WHAT you get by signing up:

1. Download the ebook —> Read the book for free
2. Get started —> Create your meal plan
3. Sign up now —> Watch now (Start your 30-day trial)

Always remind people what's in it for them: Simple yet thoughtful changes to your CTAs could increase clicks and conversions.

Decision fatigue might be hurting your conversion.

If people have to make too many decisions when they get to your landing page, they'll tire and bounce.

So what can you do to avoid it?

Decrease the amount of decisions per page that people have to make.

• Only include the most critical links in your nav bar: Don’t distract people from the action you want them to take.
• Limit the types of CTAs you use. You can take this a step further by using Unbounce or Optimize to show a dynamic CTA: a single CTA that is most likely to get a click given the particular person.
• Use plenty of negative space to prevent people from having to choose between focusing on creative or copy.

Remove all unnecessary decisions so people quickly get what they're looking for from your site. They'll be more likely to buy from you.

New subscribers come into your email list in a variety of ways:

• Some sign up for your newsletter.
• Others sign up after reading your content.
• Customers opt-in at checkout.

Yet many startups send each new subscriber the same welcome series even though we know what drove the sign up in the first place.

 Increase your email performance by segmenting your flows:

• When new subscribers sign up for your newsletter, include a sample of the newsletter in your welcome flow—get new subscribers acquainted with your newsletter while it's fresh in their minds. They'll be more likely to notice and open it when you send your next issue.
• When people sign up through your blog content, tailor your welcome flow to send them more relevant blog posts. Get specific: If they signed up while reading a keto blog post, send them more keto content.
• When customers opt-in after a purchase, create a flow that shows them how to use your product. Optimize for a second purchase: 53% of customers who’ve made two purchases make a third purchase.

Most marketers set up a welcome email automation that greets new customers immediately after signup.

But people reflexively discard them: more spam.

Welcome emails are a critical opportunity to move leads down your funnel.

Here's how you get people to open and read your welcome emails:

• Delay your welcome email by 15 to 45 minutes. The time delay removes the subscriber's mental connection between their signup and your email. This bypasses the reflex to ignore.
• Set the email sender name to someone within your company, rather than your business name. An email from Julian Shapiro is more likely to get opened and read than an email from Demand Curve. It's more human.
• Write a unique subject line. Don't simply write "Thanks for joining!" Instead, write something that will people want to click. Allbirds writes "Welcome to the Flock." Grammarly includes "You + Grammarly = Ready for Action."

You should optimize every part of your funnel, and welcome emails are no exception.

Here's a friendly reminder: Slight tweaks to your email subject line can lead to significant swings in open rate.

To get the highest ROI out of your email campaigns, try this:

• Create multiple subject lines and A/B test them on ~10% of your list. Then set up your email software to send the iteration that receives the highest open rate to the rest of your list. We've found that small iterations on your initial subject line work best because they require less time to write.
• Pique curiosity. Subject lines are like cliffhangers. Provide an inkling of the content within without revealing too much: Intrigue readers to open to satisfy their curiosity. Just make sure your subject line does relate to your content—otherwise you'll lose trust.

Reminder: Past email quality has the greatest impact on your open rate. Quality content leads to high open rates on future emails. Subject lines are just the icing on the cake.