Reflecting on the first year of SparkLoop

The good, the bad and the ugly of the first year of SparkLoop.

Reflecting on the first year of SparkLoop

2020 has not been a kind year for many people. And that’s putting it mildly.

So it feels almost strange to write this post when my company SparkLoop has had such a tremendous year. I feel incredibly lucky and privileged we were able to do what we did.

In this post I’d like to share with you the story of what happened in our first year, how we got where we are and even some incredible stats.

In 2020 we went from practically unknown in January to being the default, no-brainer newsletter referral tool for the largest newsletters in the world, including James Clear, Tim Ferriss, Shane Parrish, FrontOfficeSports, David Sinclair and many many more.

While we have spent literally thousands of hours improving the product, it’s undeniable that a big part of our success is due to the tremendous growth the whole industry has seen in 2020. More people than ever have started a newsletter, with many of them being able to even replace the income of their full time job.

At the same time, after the “social media hangover” of the last 5-8 years, many media companies and big personalities have caught on to the fact that owning the relationship with their audience (a.k.a. their email list) and being able to reach out to them without intermediary, is their most important asset.

Both these trends have meant the newsletter industry has seen an explosion of tools and resources to help companies and individual creators grow and nurture their audience. We think this trend will continue for many years to come.

But let’s start from the beginning...

Private beta

SparkLoop was in private beta for 9 months.

I actually don’t like the word “beta” because it suggests the product wasn’t ready. And while the product certainly wasn’t as polished as it is today, it was fully functional and generating great results for our customers. Internally we referred to it as “private access” and in hindsight it was the best decision we ever made.

Our marketing website consisted of a single landing page with a signup form to get on the waiting list. After people signed up, we redirected them to a page with a Calendly widget to schedule a call with us. This helped us build an email list but also (and more importantly) get on a call with the most eager prospects.

The first SparkLoop landing page

Our process consisted in qualifying prospects on a first call to see if they were a good fit and if they were, inviting them to a second call where we’d discuss their goals, create their account and set them up for success.

We also told them if they were NOT a good fit. As I'll explain in a minute this was key to get their trust and establish ourselves as "credible" players. After years of entreprenurship one important thing I've learned is that attracting the right people is as important as telling people when they are not the right fit.

We designed this process (but I should really say Louis designed it) with two goals in mind: learn as much as we could from potential customers and generate buzz.

It worked.

We spoke to hundreds of newsletter creators about their business, their goals, their struggles, what worked and what didn’t. We personally onboarded our first 100 customers. I calculated we spent an average of 3 hours per customer and we even went as far as coding the sign up page of a couple of people.

But it was totally worth it.
We quickly got a reputation for being honest (if we weren’t the right fit for them, we’d tell them immediately) and for going “above and beyond”. As a result, our early customers were very happy to refer their friends to us.

But the most important thing that happened during those months was the learning.

We learned a ton about the language our customers use (which we then used for the copy on our marketing website), the different types of rewards and which are more likely to work for different type of users (which we then used to write the ultimate rewards library), the quirks of each ESP and much more.

This wealth of knowledge informed our decisions when we finally designed the self-served onboarding for our public launch (more on this later), which meant a better user experience for them and less support for us. Win-win.

In short, a private, concierge-only phase had lots of benefits with no downsides. I now can’t even imagine working on a product without using the same process and if you’re working on a new B2B product I absolutely recommend it.

Official launch

We officially launched on August 6th and like any respectable startup, we did it on Product Hunt.

The launch wasn’t a slam dunk, but I think it was quite successful with over 600 upvotes, which made us the 4th product of the day.

On the same day we opened up signups to everyone and launched our new marketing website.

We worked extremely hard for weeks on end for the public launch but we were super happy with how it went and the feedback from people was very positive.

Growing SparkLoop

Launching is cool but if you want to grow a business you need to find scalable acquisition channels.

Luckily, it wasn’t too hard for us to figure out where to direct our attention.

First, focusing relentlessly on creating the best product has been crucial for us to get word of mouth growth and excellent partners on board. I'm not saying “if you build it, they will come” (they won’t) but having a great product is the fundamental prerequisite for organic word of mouth.

In our case, this organic word of mouth from happy customers (some of which are very popular and influential) led to several partnerships with ESPs and personalities with medium-to-large audiences like Brennan Dunn of RightMessage and DoubleYourFreelancing, Brian Clark of CopyBloggers, Corey Haines of SwipeFiles, Anne-Laure Le Cunff of Newsletter Geeks, Dan Oshinsky of Not a Newsletter and many more.

In September we officially partnered up with ConvertKit.

ConvertKit was looking to build a referral solution in house but then decided to partner up with a tool with a proven track-record... us :) As part of our partnership, SparkLoop is now included in the ConvertKit Creator Pro package.

Second, we noticed a lot of people were moving to SparkLoop from other tools like Viral Loops, Upviral and Growsurf but no one was going in the opposite direction. We talked to many of them and they all said the same thing: these tools are great for “generic” referral programs but they are not focused on newsletters.

SparkLoop, instead, is laser-focused on newsletters and we are fully committed to making it the best newsletter referral tool in the world. Features like hosted referral hub pages, two-way data syncing, automated reward distribution and built-in automated emails made moving to SparkLoop a no-brainer. Lesson learned: people will always choose a butter knife over a Swiss army knife to cut some butter.

Armed with that knowledge Louis created beautiful comparison pages and we let Google do the rest. Now when someone searches “SparkLoop vs Viral Loops” or “Upviral alternative”, our pages appear right at the top of search results.

The third thing we did that worked really well for us was engineering as marketing, AKA “free viral tools for our audience”. This strategy, popularised by Hubspot, consists in creating simple free tools that do one thing really well but have the potential to go viral (at least within your target audience) or are highly visible.

We built two such tools: Proof and Reactions.

Proof allows you to show potential subscribers they can trust you with independently verified metrics about your newsletter.

Reactions allows you to run polls and get instant feedback from your audience.

If you have a newsletter, you should give them a go. There’s no easier way to add social proof and poll your subscribers than Proof and Reactions.

Engineering as marketing has proved to be a great acquisition channel for us, virtually free (we build these tools in mini-hackathons over a week-end) and infinitely scalable. We expect to build a few more tools like these in 2021.

Interesting stats

And now the real reason you’re here… 😇

Here’s some interesting numbers about SparkLoop:

  • 5.9M total subscribers tracked across all campaigns
  • Over 300,000 unique visitors driven through referral links
  • Over 105,000 people referred* (that's a referral every 5 minutes!)
  • Over 31,000 referrers
  • Almost 20,000 rewards won
  • One person has referred over 1.1K referrals!
  • One person has driven 5K people to a website!
  • We tracked at least 1 referral from every single country on Earth

*We've been growing really fast in the last quarter of 2020. A LOT of those total subscribers have joined recently and haven't even launched their campaigns yet. We expect to see referrals grow significantly in 2021.

More than 75% of all referrals in 2020 came from Facebook (especially large Facebook groups), people sharing referral links with their friends via email and Twitter.

Customer Success

We measure success for our customers in a variety of ways, but the three most important metrics we look at are referral boost, referral conversion rate and average cost per subscriber.

Referral Boost
Referral boost is a measure of how much faster your email list is growing thanks to SparkLoop. As an example, for a list that is adding 1,000 subscribers a month, a 10% monthly referral boost would translate into extra 100 subscribers added every month that are directly attributable to SparkLoop.

The average referral boost in 2020 was 35%.

To put this number in perspective, an hypothetical newsletter with 20K subscribers, adding ~1K new subscribers a month, would have 43,200 subscribers after 1 year using SparkLoop.

Referral Conversion Rate
Referral conversion rate is a measure of the “quality” of the traffic generated by referrers. The numbers represent the percentage of people who clicked on a referral link and signed up.

The average referral conversion rate in 2020 was 32.6%.

Most people would kill for a landing page that converts ~15%. 32.6% is in a completely different league.

Average cost per subscriber
This is a bit tricky to calculate but back in September our average cost per subscriber was $0.17. We've entered into some deals which make it super, super tricky to calculate the average across everyone right now. But we don't think it has changed much.

Again, to put this number in perspective The Morning Brew's average acquisition cost is between $3 and $5.

Scaling issues

Growth is great… until things break (and you’re the one who has to fix them).

As SparkLoop grew, our servers started showing signs of distress. Part of the problem is that we have to support the growth, both in terms of web traffic and email list, of ALL our customers and we now routinely onboard newsletters that have hundreds of thousands of subscribers and add tens of thousands every day.

At one point our servers were handling 20 requests…. per second, which works out at over 51M requests per month. In October we started having some small issues, like exports not sending, subscribers not being synced and rewards not being awarded.

Luckily these problems affected only a tiny percentage of our users, but alas that wasn’t good enough.

A friend of mine, Ferruccio, introduced me to an ex-Intercom engineer, Drago, who helped me fix all the problems. With his experience we started cleaning up technical debt that had accumulated during 2020 and, more importantly, we optimised our app and upgraded our infrastructure. Now I feel much more confident to scale up SparkLoop in 2020.

Staying focused on customer success

Our main focus was and remains our customer success. This is particularly important with a self-served onboarding where we don’t have the opportunity to talk to every single customer. If they have a bad experience or don’t get results, they simply leave.

We spent countless hours analysing what the biggest friction points were, where our customers were getting stuck and what we could do to make their life easier.

We used the insights we gathered to create several resources to help them succeed, including the Referral University (a free, 5-email course to learn everything you need to know about referral marketing), the aforementioned Rewards library and many more that are coming next year, including interviews & webinars with people who run successful referral programs.

Here I must point out that I used the royal “we”.
In reality, Louis did all the work here and he did a tremendous one.

Speaking of increasing our customer success, in October we realised one of the biggest bottlenecks to optimising the referral program for most of our customers was their sign-up landing page. In other words, most people were sending people to a page that was far from optimised, in terms of sign-up conversions.

We brainstormed several options, then Louis had a “eureka” moment: why don’t we just create a hosted landing page for them? It made perfect sense: on one hand, we could use all our knowledge creating high-converting landing pages to create the “perfect” landing page; on the other hand, our customers could set up a beautiful, high-converting page in minutes. Win-win.

Our goal was to create simple but beautiful landing pages optimised for conversions. We spoke with designers, marketers, conversion experts and we even spent one-on-one time learning from the team behind Morning Brew's landing pages.

The result was two landing pages that take 5 minutes to add and could boost your referral conversion rate by 100% or more.

Wrapping up 2020 and future plans

Whoooo… that was a LOT of words! If you’re still reading, thank you.

Of course, I can’t end the post without talking about our plans for next year.

In 2021 we are going to focus on 3 things:

  • More resources to help our customers succeed
  • More integrations
  • Advanced features

Resources

We believe that great companies focus on existing customers and their success.

With that in mind, next year we are going to invest a lot into creating the best resources about referral marketing and growing a newsletter in general in the world.

By the way, if you know of any talented copy-writer send them my way :)

Integrations

Integrations with ESPs (email service providers) are our bread and butter. We already support 5 ESPs (the most in the industry) and we are going to add at least 3-4 more next year.

Advanced features

One of our goals in 2021 is to differentiate SparkLoop from generic referral tools even more and build special features for newsletter creators and media companies, including anti-fraud features, auto-fulfillment of physical rewards and advanced rules for assigning referrals. If you use SparkLoop and have any suggestion about something we could add or improve, I'm always eager to hear from you.

And now, back to work.

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