Hey there, Cameron here. Last time on Starter Story I wrote about the kid’s clothing brand I started, Sawyer, and I heard it was well received.
Since that article was published, our monthly revenue has grown 3x. We attribute much of that to a laser focus on delivering a great customer experience, providing quality products, and a brand ethos that connects with our community.
Life-time value (LTV) and repeat purchase rates continue to climb and we now have a handful of customers who’ve purchased more than 10 times. As much importance as we place on keeping our existing customers coming back, acquiring new customers is still key to healthy growth.
In the original article, I mentioned how email was becoming our best performing revenue channel and how we were going to try a few different things to rapidly scale that.
Viral email giveaways being one of them. Pat asked me to further expand on our experience and talk about what worked and what didn’t work so that we can help others who may be interested in giving it a shot as well.
Why we decided to give viral email giveaways a try
Frustrated that some of the channels we thought we could tap into for rapid growth weren’t panning out as well as we’d anticipated, we noticed that email was one area that was performing beyond our expectations.
The LTV per email address for us is over $5 and climbing and we were looking for ways to scale that as quickly as possible.
We were drawn to success stories we had come across such as the one about Harry’s, where they gained 100,000 subscribers in a week by doing an email giveaway and how that ultimately played a critical role in the success of their launch.
We thought “why not” and started working on plans and execution for our own giveaway. Our total prize package ended up being less than $1500, so we figured it was a low risk, high reward scenario.
Worst case, we’d be out $1500 and a couple of weeks time, and best case we could quickly add thousands of email subscribers to help accelerate our growth. And if the test was successful, we could easily roll out more giveaways and even up the dollar amount to make them more attractive.
Setting up the giveaway
We structured the giveaway and prizes to be as relevant to our target audience as possible to try and attract people who we could later convert to customers.
We used a viral email SaaS called Kickofflabs* to facilitate the entire backend of the giveaway. This made it it super simple for us to setup the landing pages, collect leads, generate viral sharing links, provide reward level tracking, send automated emails, and even select the winners. In the previously mentioned article about the Harry’s giveaway, they provide step-by-step instructions for setting up all the tech yourself, if you prefer going that route.*
We’re a kids outdoor lifestyle brand, so we gave away kid’s bikes, backpacks from well known outdoor brands, and hundreds of dollars in gift cards to our own shop. You got one entry per email sign up and three entries for every person you referred that also signed up, with bonus tiers along the way when you referred 5,10, and 20+ people. This was to designed to encourage virality as much as possible. There were also multiple winners and rewards, again designed to maximize participation.
We initially seeded the contest by promoting it through our own email and social followings, thinking this would be the best way to attract a relevant audience. It was entirely organic as we decided against buying ads the first time around. If this first experiment was to be successful, ads would be another tool we could use in the future to get more reach. When a user entered the giveaway a welcome email was sent to them that included a unique sharing link and call-to-action for sharing it. Reminder emails were sent out periodically throughout the giveaway to keep the interest high and encourage sharing. Using the SaaS platform, we were also able to send out notifications when users were close to hitting the different reward tiers.
A not-so-great outcome
While we didn’t gather 100,000 emails like Harry’s, we did end up with several thousand new subscribers in a short period of time. Based on the LTV of our email subscribers, you would think this was a successful outcome.
However, the overwhelming majority of the new emails appear to be from people who were only looking to win something and had little-to-no interest in engaging with our brand or buying our products.
We came to this conclusion by digging through Klaviyo, the email marketing platform we use, and comparing the engagement metrics from this list against other lists we’ve built. We saw a very high drop off rate post-contest, low open rates on the follow up sequence, and the revenue per email to date is only a fraction of our other email lists.
As an example, we have a free download for an outdoor activity guide for kidsthat behind an email signup, and the metrics from that are comparable to newsletter signups or emails from customer purchases.
You win some, you lose some, and this experiment ended up not working out nearly as well as we’d hoped.
It’s important to try different things
You never know what’s going to work and what won’t unless you try it. I don’t regret that we tried this and failed. Now we know for sure and are able to move forward having learned from the experience.
The main takeaway was that instead of focusing on engaging with and attracting people who are interested in our product and brand, we attracted people who were only after something for free.
Should you try email giveaways?
Based on our experience, I wouldn’t recommend it. But if you’re like me and don’t believe the stove is hot until you touch it yourself, go ahead and give it a shot.
Overall it’s not a huge time or money commitment, so there’s isn’t a lot to lose to try. And who knows, maybe it’ll work out great for your business or product. I’ve certainly read other case studies where it was successful. But the entrepreneurs I’ve spoken with in real life who’ve also tried it, say the had similar results to us.
If you’re still determined to give it a shot there’s a couple of SaaS products out there that are built specifically for viral email giveaways.
Thanks for reading my failed case study :)
While it feels a little strange writing a case study for something that wasn’t successful, there are lessons to be learned in both success and failure.
Thanks for following along and let us know what you think. I’d love to come back and talk about some things that have worked out really well for us. In the meantime, if you have kids of your own I’d encourage you to take a look at our products and follow us on Instagram.
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Hey! 👋I'm Pat Walls, the founder of Starter Story.
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