Morning Brew has grown from a dorm room start-up to a $75 million media company in less than six years.
Its initial product, a business-focused newsletter aimed at millennials, has grown to 300,000 subscribers in part thanks to the success of the company's aggressive referral program.
During a Jan. 16 appearance on Motley Fool Live, Morning Brew co-founder Alex Lieberman explained the referral program to Motley Fool Marketing Manager Margaret Powell and highlighted how effective referrals can be in building a brand.
Margaret Powell: When I think about what stood out to me about Morning Brew as I've learned about it over the years, is that insane, crazy fast-growth. I personally think one of the key parts of that when I look at it as a consumer of Morning Brew is this robust referral program. Can you share a little bit about the referral program and how did that come to be? What was that inspired by and what role has that played in the growth of the subscriber base?
Alex Lieberman: Yeah, for sure. I'll talk about the referral program and then I will talk about this concept that I called the balloon effect, which is how I think a lot of companies grow or the type of trajectory in which a lot of companies grow. The referral program has been probably our most important lever that we pulled to grow. Other than our college ambassador program when we first started, our referral program was the first thing that we launched to get the flywheel going of people who read Morning Brew and feel passion about it, sharing with other people. The high levels that more than 300,000 of Morning Brew subscribers, so obviously more than 10% of our subscribers have gotten at least one referral. When you think about that, it's pretty crazy. Because if I wasn't running our media business and specifically a newsletter business, I would never be the person to read a newsletter, get to the bottom, see a referral link, say, "I get to earn a hat or a bottle opener, with that referral link." Go share that with my friends, gets them to sign up to earn the stuff like that was never going to be my behavior. The fact that 300,000 people have done that is pretty remarkable. The referral program still continues to be a massive driver because it makes every new subscriber worth more than just one subscriber. Just to give kind of insight into it at specific referral checkpoints, so when you get people in your network to sign up for Morning Brew through your link, you'll earn rewards. You can earn anything from our Sunday edition of the newsletter, which is called Light Roast to stickers, to a Brew mug, to a Brew crew neck, which we call a Brewneck. Basically our view was let's come up with rewards that do two things. One, reward our most passionate readers who are going to want to wear the Brew on their bodies as like a sign of being a VIP in the club. Then the second thing is come up with rewards that don't cost a lot, but mean a lot to people. So how can we acquire new subscribers not super expensively but reward with things that mean a lot to people? I'll give you an example like Light Roast, which is our Sunday edition of the Brew. It rewards our best readers with great content, but the cost of producing Light Roast obviously isn't super high. It's a writers worth of time over a year. Same thing with a mug. People think mugs are expensive. I think our mugs costs 25 cents a mug. When you back into the cost of acquiring new subscribers by giving away mugs, it's very low.