Acquisition Tools of the Best Companies Part 2 (Groupon, Airbnb, and RentTheRunway)
Groupon
Groupon originally targeted the gender that is responsible for 75%+ of purchases, women. Because of the illusion of the low barrier to entry, Groupon did not want to signal the huge business it was building to the tech ecosystem.
Groupon was also one of the first companies to run successful referral programs. If you had 3 of your friend buy the same deal with you, your deal would be free. Another fun campaign Groupon ran was called “LiveOffGroupon.com” where a man ditched his cash and credit cads and survived on Groupon vouchers.
Plated
Plated provides it’s new customers with credits that can be used towards their first order. In addition, they have a referral program where you can get credits based on how many people you refer.
Airbnb
Airbnb had a growth strategy in their early days using Craigslist. The first was the unofficial Airbnb/Craigslist integration. According to Morgan Brown’s analysis on GrowthHackers.com, “The benefits of the Airbnb/Craigslist integration were numerous. Not only was it the sheer volume of potential users accessible via Craigslist, but the fact that Airbnb listings were far superior to the other properties available — more personal, with better descriptions and nicer photos — made them more appealing to Craigslist users looking for vacation properties.”
The second was the Craigslist poaching. While the first integration got much needed traffic to Airbnb listings, in Craigslist the company saw another opportunity for getting more users to list their properties on Airbnb in the first place. Airbnb would email people listing on Craigslist and ask them to list on it’s platform. Though this hack isn’t as clever as the Craigslist platform integration discussed above it certainly helped Airbnb to grow their listings quickly and at almost no cost.
Also, Airbnb has a referral program. For every new guest you invite, you get $25 and for every new host you invite you get $75.
Rent the Runway
Because the Rent the Runway experience is visual, Instagram is a place where women are sharing pictures of themselves wearing clothes from Rent the Runway. There are over 17k pictures on Instagram alone, that are hashtagged with #rentherunway. This free word of mouth/”see it to believe it” approach is useful and free.
Rent the Runway also has several paid acquisition tools such as a $25 credit when you join, and refer a friend program where both you and your friend will get credits towards your next program. In addition, Rent the Runway has an affiliate program that sites can sign up for and get 7% of the sale when they drive traffic to Rent the Runway.
Takeaway:
The word that came up again and again were credits. All of these companies offered credits to help subsidise the cost to their consumer. This allows for several things to occur 1) makes the entry price seemingly lower, hence making it less of a risk to try, 2) keeps money in that company rather than offering cash and 3) because it is a friend that is inviting you, the friend benefits when you try — creating a virtuous cycle.
Exercise:
- What can you offer as a free or subsidized product that will over value to a prospective client?
- Will this offering make them switch from the incumbent?
- Which channels would it makes sense for you to market on? Word of mouth? Google/Facebook ads? SEO?
- If you had to create a “Give $25 credit, get $25 credit” promotion, what would be the dollar value that you think would be attractive enough?
- How long can you afford to run such a promotion?
- Can you tap into and convert your competitor’s userbase?
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