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How to Replicate the Referral Program BoxyCharm Used to Grow Subscriptions by 15K Subscribers Per Month

Consider if using a referral link in your upcoming charge notification will work for your brand. Derric Haynie teaches us how to make it work.
July 18, 2022

Strategies are not the same as silver bullets. Subscription ecommerce businesses hear all kinds of success stories that come down to being in the right place at the right time or some other unrepeatable set of circumstances.

This story is not one of those.

BoxyCharm’s remarkable growth came from thoughtful planning and actionable insight. Derric Haynie, now Chief Ecommerce Technologist at EcommerceTech.io, played a big role in developing and implementing the referral program that brought BoxyCharm 15,000 new subscribers a month. 

The strategy was actually pretty simple: they added a link in the upcoming shipment notification to get a free product (for the subscriber and their friend) if their friend subscribed using the referral code. 

But pulling it off was complex. Derric explained how they did it on an episode of Subscription Ecommerce Live. Other brands can adapt the approach, which he says will require knowing your product’s virality, getting your whole team bought in, and executing the strategy with the right tools. 

We put together this guide to give your brand a roadmap to expand (or launch) your own referral program and grow your subscriber base. 

Step #1: Know Your Product’s Virality

Derric recognized that BoxyCharm was ripe for a referral program soon after joining the team. The Instagram page had already grown from 500,000 to 1 million followers because of the engaging content the team published.

“People loved to follow the account because everything that happened was surprise and delight, had a network of influencers behind, and the audience was already the influencer.” He said all of this led to “a lot of social buzz and virality centered around this product and product experience.”

This buzz is the starting point for a successful referral program: not the follower count necessarily, but the fact that people are “raving about you.” Derric equates that kind of buzz with a product’s virality. 

He also encourages merchants to consider the difference between what he calls “discoverable” vs “renewal-based” products. Discoverable products gain traction because subscribers get to discover new products with each shipment. This creates more natural excitement because they don’t know what they’ll get. BoxyCharm, a beauty subscription box, sent a package of new, surprise products every month.

Alternatively, renewal-based subscription products create value in a different way. Think convenience or savings. Subscribers are happy with the product, but it won’t stir up excitement in the same way. Derric used Dollar Shave Club as an example to illustrate this idea. “You don’t post on social about the same razors every month,” he explained. “Nobody is talking about it.” Those kinds of consistent product subscriptions have a lower virality and low referral coefficient.

Referrals can happen with both–DSC has obviously had great success as a brand. It just might involve an adapted strategy. Renewal-based products involve more one-to-one, word-of-mouth referrals rather than large-scale social campaigns. The BoxyCharm strategy may not lead to the same results for brands with lower virality. 

4 Questions to Ask When Identifying Virality for Profitability Math

Derric outlined a few key questions to help brands identify how ready they are for this strategy.

  1. Are people already trying to tell others about your brand?

It makes it much easier to increase referrals if your subscribers are excited about your brand. Monitor social media to see what kind of buzz exists already, and check your net promoter score to see how often people would advocate for your brand.

  1. How are your existing referral efforts going?

Do you have referral codes out there? How are they performing? Are there other ways your audience is helping draw customers? 

Your referral coefficient (sometimes called viral coefficient) gives you the answer to these questions. The people behind the analytics tool Klipfolio define it as “the number of new users or customers the average customer generates.” It tells you how viral your product is, giving you a number to compare success to before and after you implement this strategy. Any number greater than 1 indicates exponential growth. 

You can measure your own referral coefficient with this formula:

(Number of subscribers X the average number of referrals per subscriber) X referral conversion rate ÷ 100 = Referral Coefficient.

  1. Why would someone recommend your product?

This question goes back to the Dollar Shave Club example. You can’t expect to hype people on a razor subscription, but they might tell others about the value they get. Find out the specific thing that gets your subscribers excited, emphasize it, and get your audience to talk about it. 

  1. How can you make people excited about sharing your product?

There are ways to get subscribers excited about your product, even if you have a renewal-based product. Kettle & Fire uses their upcoming charge notifications as an opportunity to offer a free mystery gift on first renewal, which has helped keep customers subscribed while also training them to open the emails and engage with the content. 

Derric suggested that brands could keep the excitement going by offering another mystery product or benefit if they refer a friend. As a bonus, the friend would get the extra perk, too, which could help stir excitement on their end. These are the kinds of perks that create that buzz and increase virality.  

Step #2: Get the Whole Team Bought In

A large-scale referral program is more than a sales tactic. It involves the whole business. 

Derric emphasizes that every department needs to get behind the idea because each plays a part.

  • Customer service will have to deal with questions about package shipments, potential delivery issues, and questions around the referrals.
  • Marketing will craft the emails and track the success of the initiative.
  • Operations will have to make sure there are processes to streamline the strategy's logistical aspects. They’ll also have to ensure that the referral benefits actually go out with the regular items.

Each team will contribute to the success of the program. Suppose operations forget to include the mystery box. In that case, customer service will hear about it, and marketing will have to work harder to overcome the potential bad rep the brand will receive.

Likewise, unclear messaging from the marketing team could cause confusion for operations, which leads to confusion for the customer and complaints to customer service.

The program sees its greatest potential for success when everybody understands the value and knows the role they play. 

Step #3: Execute the Strategy With Great Emails 

Once you’ve done all the prep work, it’s time to implement the plan.

At BoxyCharm, Derric and team realized that the star of the show had to be the shipping notification email because it had the highest open rates of any of their communications. He saw an opportunity to get more returns from those moments when they had the subscribers’ attention.

The Way BoxyCharm Ran The Referral

The team understood that shipping soon emails were successful because they weren’t marketing emails. Customers opened them because they included critical information about something they cared about (when their product was coming).

At BoxyCharm, Derric and team realized that the star of the show had to be the shipping notification email because it had the highest open rates of any of their communications.

They leveraged these high open rates and added even more excitement by subtly mentioning a referral opportunity. 

Here’s how to add a referral link to your upcoming shipment notification:

  1. Add a simple image with a clear message about the referral offer at the bottom of the email.
  2. Offer a double referral. The current subscriber got their benefit in their next box if their friend subscribed, and the referred subscriber got it the month after they subscribed. This perk helps sustain the excitement and increase retention.
  3. Use a specific URL tracking code for each subscriber.
  4. Track the URL.
  5. Don’t promote the referral on any other channel. Understand that subscribers will utilize direct word-of-mouth for their referrals rather than large, public social posts. While these are harder to track, Derric says they are typically better for retention.

3 Tips for Success with the Shipping Soon Email

You need to handle shipping soon messages with care, or you can risk the strong relationships you’ve built with your customers. At ARPU, we’ve found a few key elements of crafting shipping soon emails that don’t push away your customers.

  1. Keep Critical Information Front and Center 

Remember, these are transactional emails, not marketing emails. Your customers open them because they want to know the stats of their shipment. If you don’t give them that information immediately, they won’t continue to open them.

  1. Don’t Overly Market

At this point in your subscriber relationships, you have to earn the right to promote to them. They’ve already bought the product but you don’t want them to feel like you’re always trying to squeeze more out of them. It can damage the relationship long term. Any upsells or offers should feel highly relevant and helpful.

BoxyCharm experienced notable growth with one image and one simple message. Nothing more.

  1. Make the Referral a Secondary CTA

We like to call this “PS Marketing” because it’s not the primary focus of the email. You give them the information they were looking for, and then you offer a little note at the end that adds the invitation to refer a friend.

BoxyCharm experienced notable growth with one image and one simple message. Nothing more.

Tools to Use for Your Referral Program

Your referral program will involve a lot of data, tracking, and email creation. It’s pretty much impossible to do that without the right tech tools. Derric is obsessed with providing solid recommendations for ecommerce sellers via EcommerceTech.io.

Here are a few of the best tools he mentioned that you can consider:

  • ReferralCandy for creating unique referral codes, tracking the data, and encouraging subscribers to participate through automated email campaigns
  • Smile to help offer rewards to subscribers for their referrals 
  • LoyaltyLion for incentivizing user-generated content, automating referral emails after customers leave reviews, and creating customer-specific URLs to share with their friends and families
  • ARPU for creating and optimizing shipping notification emails that lead to growth  

Closing Thoughts

Remarkable growth doesn’t just happen. It takes thoughtful planning and careful execution. BoxyCharm found a strategy that grew its subscriber base by 15,000 month-over-month. 

And they did it by adding simple messages to their shipping soon notifications.

Remarkable growth doesn’t just happen. It takes thoughtful planning and careful execution.

ARPU helps subscription brands using Recharge optimize their messaging to improve subscriber experiences, increase revenue, and increase LTV. Plus, we’re happy to help merchants looking to get more out of their shipping soon emails by adding a referral block.

Try ARPU for free and see how it can grow your business (5X ROI guaranteed).

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