Louis Nicholls is the co-founder of SparkLoop, an email newsletter referral program where you can have each of your subscribers refer their friends to unlock cool rewards.
SparkLoop is amazing. They’re growing really quickly in the audience-building space and ConvertKit actually gives away free SparkLoop accounts to all of our creative pro customers.
In today’s show, Louis talks about how to increase your email list growth rate by more than 30% with a referral program. He also gives his (hot!) take on paid newsletters, discusses how best to monetize your audience, and so much more.
Links & Resources
- James Clear
- Tim Ferriss
- Brennan Dunn
- Anne-Laure’s Ness Labs
- Art of Newsletters 018: Anne-Laure Le Cunff – Building a Loyal Audience & Growing Your Newsletter
Louis Nicholls’ Links
- SparkLoop’s Referral University
- Personal site: LouisNicholls.com
- Twitter: @louisnicholls_
Episode Transcript
Louis: [00:00:00]
I think you should be creating content probably in other places. Most often people who get to a hundred subscribers and carry on, they get there relatively quickly because they’ve been being useful in other places. For example, on Twitter, in forums, you should focus less on getting more subscribers through the door and more on being useful and creating content.
Nathan: [00:00:25]
In today’s episode, I talked to Louis Nicholls from SparkLoop and SparkLoop is an email newsletter referral program where you can have each of your subscribers refer their friends to unlock cool rewards. So, for example, if you refer three friends to a newsletter, you could get access to the special content, 10 friends, you get a t-shirt 50 friends, you get something extra incredible.
SparkLoop is amazing. They’re growing really quickly in the audience, in the audience building space and, ConvertKit’s actually an investor in SparkLoop and we give away SparkLoop accounts for free to all of our creative pro customers. So the article is so good. Talk about how to grow your email list by more than, or increase your email list growth rate by more than 30% with a referral program, as well as Louis’ take on paid newsletters, how best to monetize your audience and so much more.
So let’s dive in.
Louis, welcome to the show.
Louis: [00:01:17]
Nathan. Thanks for having me, excited to be here.
Nathan: [00:01:19]
All right, so let’s talk SparkLoop right at first. you’ve been in the newsletter industry for awhile. You’ve been watching this whole space, building lists of your own. What was the impetus for wanting to start SparkLoop?
Louis: [00:01:32]
Yeah, I’m kind of half from me, but also half from my co-founder Manuel. So Manuel had been running a, like a generic referral tool called referral hero for a couple of years. It was, or it still is pretty successful at a lot of clients, you know, larger fortune five hundreds as well as smaller ones. And that was in like the generic referral space.
So mainly e-commerce SaaS and so on. And I was at that point where I just sold my last company was kind of looking around for things to do and keeping myself kind of engaged. So I was running a small newsletter, doing a small course teaching founders, how to do sales and doing kind of like that classic.
I call it marketing consulting, but really just kind of helping other founders who reached out with some kind of like consulting gigs. And one of them ended up being a paid newsletter in like the flight steals space. And they, I think they probably, at that point seeing what morning brew was doing with their referral program and they were really eager to add one in.
So they asked if I knew of anyone who could help do that. And I said, well, I’ve done referral programs before. And the software I’ve used is from my friend, Manuel, who runs her federal hero. So I thought, well, if anyone knows what tool to do or what, what tool to use, it’s going to be Manuel. So I’ll ask him, reach out to Manuel.
And he says, well, you can kind of make referral hero, do this with a lot of work. there isn’t really a better option out there. But it’s funny you say this cause you’re like the fourth person this week has asked me if we can get referral here at working with newsletters. So maybe we should look a bit into this together.
And, that’s kind of, I think where it starts, if we didn’t originally planned the Spock week to be a new tool necessarily, we thought it could be kind of inside of referral Europe. But as we. Kind of understood more about exactly how it was supposed to work and kind of the integrations that newsletters need to be successful. We’ve realized it really needs its own dashboard and its own integrations. And at that point it may as well be a separate product.
Nathan: [00:03:46]
Yeah. And so we’re recording this in January, 2021. when was that? That, you two started working on.
Louis: [00:03:55]
I think the first time we probably started talking about it was in summer 2019. Yeah. So about a year and a half ago.
Nathan: [00:04:03]
Yeah. And so now, I mean, SparkLoop powering referral programs for a whole bunch of people. I know James Clear, a lot of ConvertKit customers, who are some other examples that you could share?
Louis: [00:04:15]
Yeah. James Clear, Tim Ferriss would be two big ones from kind of that personality author space, I guess. then we have a lot of info-product creators using us people like Vernon Dunn. and Anne-Laure from Ness Labs, who I know you had on the, on the podcast recently. And then we’re seeing a lot of interest from kind of the, the media companies as well.
So, Punchbowl news, we just recently launched a using us front office sports, people like that.
Nathan: [00:04:46]
Nice. Okay. So when someone’s thinking about a referral program, What are some of those misconceptions, right. Someone comes in and they’re, they’re like, I’m going to copy. What morning brew does exactly. Like, and then it’s going to explode. We’re going to have viral growth. Like it’s going to solve all of my, user acquisition problems.
What are some of the things that people come in with and where do you either say, no, this is actually the best practice or like sort of reset their expectations.
Louis: [00:05:16]
Yeah. I mean, how long do you have we could, we could go at this all day, I think. so I’ll start with some common ones. The, I think the most common one we see straight off the bat is that some people that newsletters are just too small for it to be worth one. so if you have, if you’re a hundred or 200 subscribers, yes, you can grow.
I don’t know, 20%, 50% faster with a referral program, but 20 or 50% of five new subscribers a week, just isn’t worth the time you’d put into it. Right. And you could be cross posting or doing something way more useful at the time instead. so that’s the main one when we see
Nathan: [00:05:55]
What sort of minimum threshold that it, that it does make sense.
Louis: [00:05:59]
Yeah. Good questions. So I think if you don’t monetize your newsletter yet, or you monetize it via sponsorships, Then you’re probably looking at somewhere between the thousand to 2000 subscriber. Mark is when it starts to really be something you should think about. If you do monetize, especially if you have, you know, courses or something like that, where you’re like the value of a lifetime value of a subscriber is, is high, is 20, 30, 40, $50.
Then it can make sense, you know, with hundreds subscribers. I mean, I use it for sales to founders, my newsletter and cost because. I only have about 1,500 or I did only have about 1,500 subscribers on that list, but each of them was worth about $56 on average. So even getting two or three new subscribers for me a month is a big deal.
Nathan: [00:06:51]
Yeah, that makes sense. when you’re looking at. I feel like I have so many different questions, but when you’re looking at the revenue per subscriber across lists, since you have this insight now across a whole bunch of different newsletters, what are some of those defining things? Is it always the highest when someone has a paid course?
Louis: [00:07:13]
These are, I think one of the things that we’ve seen so far that do tend to have the highest lifetime value per subscriber, it depends. So yeah, I think cost is probably like the highest consistent one that we’ve seen on average. And then you also have services, which are super hard to define because you’ll have maybe 5,000 people and list.
And one of them is going to pay $200,000, but you don’t know which one it is. So like leaving them aside. Cause that’s like a whole different thing.
Nathan: [00:07:46]
I would say it’s to average that where you’re saying like, Oh, I made $200,000 off the list. So every subscriber is worth $200. It’s like, no. Yes and no. Like, technically that is the average and no, you shouldn’t make business decisions based off of that.
Louis: [00:08:01]
Totally. Yeah, totally. So I think info-product creates is probably at the top. And then you have paid newsletters, paid communities as well, which tends to be a tiny bit lower. then after that you have sponsorships affiliates, stuff like that. Yeah.
Nathan: [00:08:15]
Yeah. Okay. So going back to the, the difference in what people are expecting from a referral program, you know, versus what they should actually do, what are some of those things that come to mind?
Louis: [00:08:26]
Yeah. So we talked about already about the, the idea that you don’t want to start when you’re too small. The other thing you have to bear in mind is that you have to be sending regular emails for it to be worthwhile because. You need to be asking people often to share. And if you only send an email every month or every three weeks or so, that doesn’t give you very many opportunities to, to nudge people to, to refer.
So they tend to see pretty poor results. And it, it does tend to be the daily newsletters. Like the morning brew Punchbowl will get the best results. And then, you know, twice a week weekly, they get great results as well. Anything where you’re not sending at least once every week tends to be more difficult.
Nathan: [00:09:10]
Yeah, that makes sense. And is that, is that a call to action that you’re putting in every email? is that something that you do dedicated emails for? How, how does it perform best?
Louis: [00:09:23]
What we tend to see is that you want to have a, a call to action, like a referral section inside of every email that you sent out. Unless that email has some other really important call to action in it. So if you’re launching a new course or you really want to drive people to a particular link particular website or video, then maybe skip that week because you don’t want people going off in different directions and doing different things.
But in general, you’d have it in every single newsletter. Normally either towards the bottom or somewhere in the middle, where people are going to see it. And then we also recommend that you probably want to. Have a specific welcome email. So when someone joins your newsletter, you presumably have a welcome sequence or several welcome sequences, depending on whether people, you know, where people joined from or why they joined.
And what you normally don’t want to do is to introduce the referral program in email one, because they haven’t had a chance to, to trust and get to know you yet, but normally a couple of days later. So between. Seven and 14 days after they sign up, you want to say, Hey, you know, I, I hope you’re really enjoying the content.
It’s all free. It would mean the world to me. If you would share it with a couple of people that you think will get value as well. And I’ll have that email somewhere in that.
Nathan: [00:10:42]
That makes sense. Yeah. I mean, you’re, you’re effectively asking for a sale in some way, right? In this case, they’re not paying with dollars. They’re paying with, A bit of their time and their reputation, right. Where if I’m saying, Hey, you know, my friend Barrett, like Louie’s email is really good, you know, go pay attention to it.
I’m like attaching a little bit of my reputation to that. And so if you’re doing that before, there’s trust built up where you’re saying, Hey, you should, you should go pitch your friends on this. And you know, we’re on email one or email two. It’s probably premature.
Louis: [00:11:16]
Sure. Oh, yeah, for sure. I think that’s an interesting point that you raise about the, I mean, the trust is absolutely spot on, but also that you’re, you’re asking people to pay, like to pay you in a way. we do see that you can almost separate. The approach that you take with the referral program out into two kind of distinct ones where what most people are used to is kind of like the really transactional approach of morning brew, where it’s quite obvious, they’re saying, Hey, please go and do this work for us.
Please go and refer. These people actively work towards it to get this reward, this price that we’re giving you in return for the work. And that can work well. But it’s also like once you have that, once you state that relationship with your subscribers, then it’s very difficult to roll back from that from asking them to do work for you.
So what we normally recommend is to start off with more of a nudge and to say, Hey, we’re not asking you to go and do work for us, but we know for example, Nathan, we know that you enjoy. Might newsletter about whatever it is. we know that that must be a lot of other people on the ConvertKit team who really should be reading this as well, that you should be sharing it with.
So as a thank you for sharing it with them, he has a small little thing just to say, thank you, basically.
Nathan: [00:12:34]
And so what’s an example of one of those small things that you would do where it doesn’t feel as transactional, or like this big ask.
Louis: [00:12:43]
Yeah. So that’s, that’s a really interesting thing as well. So most people they come in and they naturally assume when it comes to rewards that they need to do either some kind of discount, so money off something, or that they need to do some form of physical swag or gift. So maybe mugs t-shirts ad pod cases, stickers, even something like that.
And. Those are expensive. Firstly, you know, you don’t necessarily want to be paying for those and then shipping them and coordinating all of that. It can be a pain, but also secondly, they tend to underperform from what we’ve seen compared to what makes really good rewards, which is rewards in our experience that are based around either exclusivity or around urgency.
Either getting access to something that there’s no other way for them to get access to often that’s content, maybe in your case, it could be. and so James clear, for example, has a secret newsletter that he sends every month, which you can only get, if you make three referrals or we’ve seen people do, kind of small coffee chats via zoom once a month of inside of clubs.
We’ve seen all of this, for example, who will say, you can get a, a chapter from the book that I ended up removing from the book, and then no one else has read. For example, that kind of thing. It’s something that you can only get if you, you know, if you make the referral something exclusive or on the urgency side, which works really well for infoproduct creative schools creates us, is to say, I’m going to give you early access to something.
So when I had my last launch at the sales of founders course, for example, the course was launching on a Monday, on a Wednesday. I emailed my list and said, Hey, on Monday on Monday, you’re going to get access to this thing for free. If you’d like to get it on Friday, just share this link with two people.
And just that act of doing it grew my list by about 30%, even though it was only a two day difference, which you’d never think of it working like that.
Nathan: [00:14:49]
Well, and there’s no marginal cost to it, right. Where I would assume coming in that. I need to be on the other camp of, do this thing and I will send you a t-shirt and you’re like, well, that’s a, that’s a $15 all in cost, you know? And so what I hear you saying is sure, you can do that, but here’s a digital version that has no additional costs that performs just as well, or even sometimes better.
Louis: [00:15:16]
Yeah, totally. I mean, if you think about where the sweat comes from, it’s often because the really big newsletters that got popular with referral programs, the main two really are morning brew and the skin and that both very strongly branded newsletters focused mainly on college students and college students were really identify with it and they would really like to have a free t-shirt.
If you’re selling to, or if you’re writing emails, if you’re creating content for people who are maybe professionals that all of a sudden a free t-shirt, if you’re making 150 K a year, it doesn’t really move the needle that much. Whereas, a coffee chat with other people who are in your industry would be super interesting for you.
Nathan: [00:15:59]
Yeah, that makes sense. Okay. So, let’s put on our free consulting hats for a second. And let’s say hypothetically, someone named Nathan Barry had a newsletter of. 26,000 subscribers and was considering starting a referral program. all hypothetical, of course. what would, what would you recommend, that program would look like?
Louis: [00:16:22]
I think the first, I mean, I’d have to ask some questions first. So I think the first question I would probably ask is why people are signing up for the newsletter. So what did they turn up there for?
Nathan: [00:16:31]
Yeah. that’s a good question. So it’s a lot of content on a design marketing and audience growth, combined with, You know how to run a startup or a money or that sort of thing. Honestly, it’s a very, very broad newsletter, right? Things like this podcast are going out to it. and another point, you know, just for, for references, it’s a list that, didn’t go cold, but definitely got a lot colder as I focused on convert kit.
You know, so for example, the list peaked at 30,000 or 32,000 subscribers, and I’ve just slowly kind of trimmed it down and cleaned it. as it, you know, it’s not growing fast, it’s growing, I don’t know, 2010 to 20 subscribers a day, not the hundreds of subscribers a day that you would expect to get to those numbers.
Louis: [00:17:21]
Sure. Sure. Yeah. That’s interesting. So then the other question that I tend to ask as well is, how you, or what you want the people on your newsletter list to do. So once someone subscribes, what is kind of the, the end goal for them, are you monetizing in some ways that something like them, some action you’d like them to take.
Nathan: [00:17:41]
I want them all to sign up for ConvertKit. but I’m gonna say at this point, convert, it is. So much bigger, whereas four years ago, five years ago, my audience was driving ConvertKit and, and now, you know, ConvertKit’s email list is 10 to 20 times the size of, of my individual audience. So, Yes, they could buy the books and courses, but I don’t push those very much.
So I think it’s, you know, I was talking to, on Malik who, started to gigging, years ago and now as a venture capitalist investor and he recently switched to convert kit and he had this, this thing that I hope he executes on this idea of. Saying, he’s only going to allow 10,000 people on his email list.
He wants the 10,000 most engaged people, right? So he wants like a 70% open rate or higher. And if someone doesn’t open it consistently, he’s going to kick them out and then let in the next like 500 as he clears out that, that slot. And I don’t know that I’d ever go that extreme though. Like I liked the idea, but I would want people who.
I would want the most engaged people who are there for a conversation or who are really fans of the work, rather than just getting to the largest possible list.
Louis: [00:19:01]
Got it. Okay. Okay. Yeah. So I love that idea, right? I’m not sure I’d have the audience to pull it off, but it’s a, it’s a fun one. so normally when people have a list they tend to have, they tend to be trying to monetize the list in some way, right. If you’re using a referral program, So you would maybe, for example, with one of your books, I want to go eBooks.
What you might do is to say, okay, well, I would really love people who sign up to buy one of the books and then maybe they will see through that. They will learn that they should use convert kit. Or they will take a course of mine or they will, I don’t know, spread the word in some way internally. So the company buys convert kit or something like that.
So what you normally do that is you would try and tailor the reward to be something that someone who’s kind of on the fence about buying the book would want. So it might be a free chapter from the book, for example, and you’d set that up as. W when it comes to rewards strategy, which isn’t something we really talked about, what you tend to want is to always have a reward that you can win.
So making between one, three referrals. So that’s really easy to win because if you have a reward at that level, then everyone who sees it thinks, okay. Yeah, sure. If I share this on Twitter, if I share this with a couple of friends, I’m going to get at least one or at least two people to sign up the short.
So I’m definitely going to get this thing. So I would have something in that space for between one and two referrals. It’s digital, it’s easy for you to do, you know, you can set up an automation and convert kit or your email tool to just send them the free chapter as a, as a download link on. So they make the number for ferals and you don’t really have to think about it again.
And then what you might do on top of that is to have another reward somewhere between maybe five and 20 referrals. And that would probably be something that’s slightly more, more exclusive. The people are probably going to have to work a tiny bit towards, or they’re going to have to have quite a big list or quite a big kind of social sphere to be able to get straight off with one chat.
And that in your case, again, it’s difficult because you’re not trying to monetize directly, but something you might do that, that we’ve seen work well is for example, to say, okay, a lot of the people on your list, for example, probably marketers and would probably like to get themselves featured or in front of other people who are also on the list.
So you might say, well, I will give a shout out at the bottom to the three people each week who make the most referrals or, once you make 20 referrals, I will give you a big shout-out in the footnotes of the newsletter or something like that.
Nathan: [00:21:34]
Yeah, that makes all that sense. Something that comes to mind is, there’s a lot of content that I. Am intrigued on or want to write a write about around money. And particularly like, I have a lot of people on my list who say, have followed whatever in authority or something else over time, they execute on that.
And now they’ve made a hundred thousand dollars a year online, whereas before they were making 40,000 in their old job, or now they’re making 250,000 a year. And they’re like, what? Even. What is happening, you know, you, if you go from 60,000 to 250,000, which you can do from a single, you know, course launch product launch, your world is completely different.
But if you post about that sort of thing publicly, then there’s all like, you have to deal with everyone saying like, look at you. You’re now in the 1%, or I don’t know, like all the negative talk around it. And so one thing that came to mind is doing this like a secret course. That, you know, I’m on money that shares a bunch of these things that once you’re at this level, you should pay attention to, but that requires, you know, three or five or 10 referrals.
And I think that would be really interesting, cause it both is only for the most engaged people, which will prevent some of the public backlash. and you know, it could be a compelling reward.
Louis: [00:22:58]
Totally took. And I think, you know, that’s a great title. And also with it being, I mean, it’s, it’s your like Nathan Barry newsletter write people up as to hear from you. And that has similarities with James clear with the Tim Ferriss newsletter, where really what they, what subscribers they want at the end of the day is they want more James.
They want more Tim and they want more. Nathan. so having something like that, that’s exclusive, that’s an insider thing that you can give them is a great way of doing it. And maybe even layering on like, A monthly coffee chat or every quarter, maybe a coffee chat, something like that. Just some way that people can connect, that obviously in your case, you wouldn’t want it to take up too much time, but something where, you know, people can get more of what they signed up for, which is more Nathan barrier, basically.
Nathan: [00:23:44]
That makes sense. What are some of your favorite programs that you’ve seen people put together? We talked about James. what are some other examples that people Vic’s executed really well on the reward tiers or how they promote it?
Louis: [00:23:57]
Yeah. So something I’ve really liked is I’m a manual stacked marketer and he does a great job of mixing in. digital and physical rewards together. So he keeps the first couple of reward, referrals that people would make. So up to about five referrals, it’s all digital things that are completely free for him to give away, like, access early access to conference tickets and stuff like that.
And then from there he layers in physical rewards. So a mug, a t-shirt and so on, and he actually takes it all the way up to, I think for a thousand referrals, he will fly you to Vienna to get lunch with him. which I don’t think has happened yet, but there are people out in that far away.
Nathan: [00:24:44]
I can see that I, in a post COVID world, I have an absurd number of airline points. I, you know, that could make them,
Louis: [00:24:51]
Yeah. Yeah. I mean, we we’ve had people make over a thousand referrals before. So I was saying this to, to Trevor mackendrick who uses us in his newsletter and he, his, his kind of big, shiny, reward tier at the top. And the motivational one that kind of grabs headlines and gets people talking about it is I think for a thousand referrals, he will buy you a billboard in San Francisco and put whatever you want on it.
And so I was explaining that there’s a chance that he may actually have to do that. So yeah.
Nathan: [00:25:24]
Yeah. what, obviously you get these outliers of a thousand referrals. Are those always coming from someone who has a big audience? or do you see it from, you know, a subscriber who is really just hustling, like crazy.
Louis: [00:25:41]
yeah, you don’t tend to see too many people hustling, like. Crazy to be honest. And you, you don’t normally want that because if they’re working for it, then the engagement of the people that sending it away is probably going to be quite low. so that’s fine. If you have like a morning group or a hustle style audience, where really they’re happy to get a lot of people through the door and their audience is super broad and people will, you know, they do an amazing job in the first two weeks, making sure that people who aren’t a good fit, segmented out and cleaned away.
And it’s all fine. if you were running a more niche newsletter, especially if you have like an info product or something like that, a paid newsletter, then you really are looking for engaged subscribers, people who are really gonna identify with it. So you, you almost don’t want their awards to be too good to the point where people will start to try and trick the system and get people to sign up who maybe wouldn’t have been too interested.
Nathan: [00:26:33]
That makes sense. I think a fear that people would have with a referral system or particularly. Referral system, is it that engagement would be lower over time, right? That those subscribers would be, less than one thing that I’m realizing is inside the reporting and convert, you could segment down to referred subscribers and then just see their open rates trending over time and compare that to, you know, the more general cohort or a cohort that came from paid advertising, or that came purely from organic search.
What have you seen is that. Does that fear play play out or are they just as engaged as those that sign up organically?
Louis: [00:27:13]
Yeah. I mean, I don’t want to sound like I’m saying referral programs are the best for everything they’re not, but when it comes to engagement, I think anybody who uses spark group and probably anybody who uses any referral program would say that the engagement is better than pretty much any other source they get.
I’ve heard that engagement from people who’ve come. Fire influences is pretty good. I think that was the head of growth at morning brew was talking about that a couple of weeks ago when we were chatting. But other than that, everything I’ve heard so far is basically that the people who come from referrals, because the difference between like people coming from a giveaway, like a traditional giveaway, right?
If you go on Twitter and say, Hey, sign up to my newsletter this week, and you’ll be in with a chance to win a Mac book or something like that, which people do well, you get loads of people who sign up because they want to win that book. Whereas, if you tell your existing audience, Hey, I’m going to give away a signed copy of my book this week to one person who makes at least one referral, or the people who they’ve referred.
They’ve only signed up probably through your existing landing page or through like a landing page, which is they’re there for the newsletter. Right. But they’re not only there for the newsletter that they have for their newsletter. They know that friend is subscribed to. And that they’ve had from like, recommended to them and that they can chat about with that friend.
So that likely to be way back to quality than anything else. And what we actually see is that, especially if you’re going to go out and do paid advertising. So if you’re going to do Facebook ads, for example, to your newsletter, Then, what you really want to do is you want to add in a referral program first, you want to see which people are researching and which people are being referred.
And then you want to build a custom audience around that because those people are likely to be much better, kind of acquisition sources through Facebook for a custom audience, then just, you know, trying to build an audience in general.
Nathan: [00:29:02]
Yeah, that makes a lot of sense. And then, then you’re going to get, you know, for every dollar spent on Facebook to get a subscriber, you’re going to get a little bit more of an incremental gains of, you know, another quarter of a subscriber on average or something like that.
What are you seeing on, like, on some of the numbers, you know, if we were to spin up a, a referral program and execute it, maybe it’s not the most, perfectly executed referral program ever, but we’re following these best practices, making compelling content and that kind of thing, say to a 25,000 subscriber list, I don’t know, 30% open rates, something fairly average. where do you see in a left on, on subscriptions?
Louis: [00:29:45]
Yeah. So what we tend to to measure by is, is kind of the growth rate, right? So if you’re growing, let’s say. Take X percent a week or X percent a month. What difference do we make to that? It’s kind of how we measure ourselves. And what we tend to say is all we tend to see is that anybody with completely free digital rewards that cost them nothing, not putting a lot of thought into it, not running regular referral giveaways, which make a massive difference at really kind of trying to do the bare minimum, of, of, of time and, and money investment.
They can get to somewhere between 15 and 20% faster growth with a referral program. the average that we have across all of our sparkly customers is about 35% at the moment, which is just slightly higher than I think the morning brew has from what I’ve read. and I mean, it goes the whole rain track.
We’ve had people who have consistently grown 300% faster, 400% vested, but. That’s sending daily newsletters. They have a super like gamified sequence. They have this wide audience normally of, of teens or of college students who are really interested in signing up. So it’s, if you have that perfect storm, that really the sky’s the limit, but yeah,
Nathan: [00:31:01]
Anything could change on that, but that’s a great way to represent it, of whatever momentum you already have. We’re looking for a lift on that rather than, you know, again, it goes back to if you, if the subscribers aren’t there to begin with it, doesn’t, it doesn’t work. This is only a lift on what’s already happening.
Louis: [00:31:22]
Yeah, exactly. I mean, the truth is that people do even without a referral program, you will have some people sharing. You will have people writing about the newsletter. You will have people sharing it in Facebook groups. And if you’re like without doing anything else, if you’re seeing basically no growth.
That’s normally something that’s gone wrong, that, that a referral program isn’t going to fix in the same way, the probably paid ads. Also, aren’t going to fix that. There’s something more fundamental that needs to be, to be sorted out.
Nathan: [00:31:51] can you break from referral programs for a little bit like newsletters in general, newsletters are having this, this resurgence, right. There’s been various waves of it. One was in the blogging. I feel like when maybe it’s just when I came into blogging, but when there’s a big wave in 2008 to 2010 something, 2012, something like that, I feel like tiny letter push newsletters a lot.
And. 2013, 14, somewhere in there and then died often. Then now it’s sub stack and your view and convert kit and all of us, right? There’s this big wave. And in newsletters, do you think that’s something that is here to stay? What do you, what do you think is different this time from, other particular waves we’ve seen in the past?
Louis: [00:32:33]
Wow. Big question. I think it’s, I think it’s interesting. I think people, so what I’ve seen is over the last couple of years that, I mean, info-product creators have always known that they need to own their own email list. I think. And people have always been blogging and there’s no, and yet it would be a good idea to be able to email people the same things that they don’t have to come and discover me every time and check if something’s going on.
And then I think over the last couple of years, what I’ve seen is that people who are maybe more into like the, the nerdier kind of technical industries have kind of copied onto the same idea, right? So we’ve seen people moving from a tech journalism, into newsletters. We’ve seen. Podcasters realizing, Oh, wow.
I should probably own this audience as well. people on certain platforms who’ve been kind of, especially, I think, you know, people with Facebook audiences, for example, who’ve seen, okay. Yes. I have this group with 70,000 people and, but tomorrow I may not be able to email or to reach even five of them.
So they’ve kind of woke up to that threat and realized yeah. Any to, to own that audience in a way that really own the email. Makes it easy with the kind of content that you want to send them. And what I’m seeing at the moment, especially from like conversations with people who are, you know, talking to us at sparkly is that we’re getting a lot of interest from kind of younger and maybe slightly more or less, less, less closely related to the tech industry industries.
So people coming from YouTube, people coming even from Tech-Talk from Instagram, all those people that you wouldn’t even necessarily think that they would have. A big email list, like, personal trainers who don’t, who do most of that on, on Instagram, for example, they are suddenly really aware that they need to start growing their email list.
And, I think that’s kind of it. I definitely think it’s here to stay at least, you know, for the foreseeable future. I think it’s a really interesting time to be, to be an email for sure.
Nathan: [00:34:37]
Yeah, it’s really fun. But like no one in the last two years is or said like isn’t email dying, whereas before they did. And you’re like trying to explain, no, it’s not at all. You know, like we see, these. Trends and the numbers and it’s just, it’s crazy. But now it feels like the mainstream sort of, press in general sentiment is catching up where people are realizing that they should have this hub and spoke model where the email list is their hub and then the Tik TOK and YouTube and Twitter and et cetera, are all these spokes that drive back
Louis: [00:35:10]
Yeah, totally.
Nathan: [00:35:13]
Something else that. I’ve been wondering about your take on this? You and I are both fairly vocal on, on Twitter about, email lists, monetization methods. what’s been your take on paid newsletters and how have you seen those play out?
Louis: [00:35:27]
Oh, I so difficult. I think a lot of people are going to get done by paid newsletters. And I think I see a lot of people right now who have been really struggling to get a hundred subscribers and who, if they had tried to monetize in some other way, wouldn’t be making $500 a month, but we would be making closer to, you know, 5,000 or $10,000 a month.
I mean, I was thinking about it with my own list of sales with founders. If that was a weekly list, an email where I would be just giving some sales tips each week or giving the same advice in a weekly format. I don’t think I would be at even $2,000 in monthly recurring revenue with that as a paid newsletter.
But I mean, in the first year of doing it, I was in the six figures with it, with courses and with, with coaching. so I think, especially at the, I think. People, a lot of people have gotten into that too enthusiastically without maybe realizing that you are on a treadmill at a certain point and you have to then decide, okay, do I, you know, hire, do I make this more professional?
Do I want to keep creating content or outsource the content creation to someone else for a long time? you know, like long-term to be able to grow it to something sustainable or do I want to add in different monetization streams? I think labs who. Maybe originally kind of started off with the idea of it being a paid newsletter, but realized actually it’s more of a paid community with other things going on there.
And the newsletter again is really kind of just a way to get in that. I’ve seen other people like, like Dan from capital, he tried the, the paid newsletter and it didn’t quite go so well. And you realized consulting and services were for a much better shout. So. That’s one of the things I think also if I look at like substance, for example, that the challenge that they’re going to have is that it’s super difficult to layer other products and other services on top of that.
And that’s going to become, I think, a real, a real blockade when people realize, Hey, for the same amount of work I could be making, you know, two, three, five times as much money quite easily.
Nathan: [00:37:37]
Basically the same point that I made on Twitter a while ago is, let’s say we’re trying to optimize for. Earning a hundred thousand dollars as a creator, as an independent creator online, I want to go from zero to a hundred thousand dollars in annual revenue. What’s the best path to do that. And if that’s our goal, I don’t think it’s paid newsletter.
Now, if the goal is I want to have the simplest business model and I want to make sure that money just shows up really consistently, and I have a straight, a difficult, but straightforward life. Of showing up writing one to three articles a week, promoting them in this way and making sure that I get the same $2,005,000 a month, that just shows up like clockwork.
And then a paid newsletter is fantastic for that because it’s going to be very predictable. You and I both know from product launches that you can have a bunch of like $500 weeks, and then you can have a $50,000 a week and then a bunch of. You know, and then it’ll taper off again and, well, that’s far more money, usually over the course of a period of time.
It can be stressful, right. Especially if we wanted to hire employees and there was something like dealing with payroll when you have these spikes, but I’m totally with you when I see. I guess I’m of two minds on paid newsletters, one it’s incredible. And I love that the willingness to pay is there in the market.
And it just, it added a whole new monetization method for creators where you can choose whatever you prefer. and then the other side I’m like that is a whole lot of work for not as much revenue as you could through a course or through coaching or through, you know, so many other other methods.
Louis: [00:39:24]
Yeah, totally. And, you know, I don’t think it’s necessarily either, or, and I think there are just kinds of newsletters that need to be like that. Right. So, Isaac, over at tangle, for example, He’s writing news. Like it needs to be up to date having an info product or a course or something to him. It wouldn’t really make sense.
Whereas, you know, a paid newsletter in that case, because it’s a regular content that needs to be updated all the time. Then that’s an absolutely amazing way of, you know, of supporting him. Whereas there are other people who, you know, the founders want to come to me for example, and learn sales. Well, they don’t want to learn sales for three years.
If they’re learning sales from me for three years, that means I’ve done a terrible job at teaching them not to do sales. Right. So I want them to sign up for my newsletter. I want them to stick around for a couple of months and then I want them to not need my newsletter anymore. And, you know, I think that, you know, you just have to kind of, there will be a good mix of business models depending on what your audience wants.
And I think understanding what your audience wants is the most important thing.
Nathan: [00:40:24]
You see, in platforms of people choosing, you know, sub stack, review is just acquired yesterday by Twitter. so that’s exciting. New news. I guess in full disclosure, ConvertKit is a shareholder in SparkLoop, through an investment earlier this year. No, last year I keep forgetting it’s 20, 21. but what are you saying?
Because SparkLoop integrates with a lot of different platforms, and takes over this platform, agnostic approach, which I think is fantastic. where are you seeing in why people are choosing each platform?
Louis: [00:40:58]
Yeah. It’s it’s so I think we honestly don’t see. I hope I don’t get told office. We don’t see that many people choosing review. I think, it’s just not, I think that will change now with Twitter. But up until now, it was kind of pricey. And they had like, you know, more limited features and maybe we’re focused more on, kind of the slightly larger media companies, when it comes to sub stack, I think the advantage, the reason people go for what are the advantages sub stack has that people go for them a lot is also kind of the downside for the creator that makes them move somewhere else, which is that it’s very strongly subset, grounded.
You know, you’re on sub stack and sub stack considers. You as a subscriber to be a substance subscriber, what just a, a subscriber to a particular newsletter that happens to be using sub stack in the backgrounds. So again, it’s that they make it very, very easy to get in and to get started. And I think that’s a great thing.
And I think, you know, having as many people as possible blogging and creating newsletters and sharing what they, what they know with people is, is absolutely amazing. But I also think that there comes a point quite quickly when you start to realize with a tool like that. I mean, there are new ones popping up every day.
You do get to the point where you realize, well, if I could just send a welcome sequence, if I could just do this one thing, if I could just tack people here or give them this link or just. If I could just sell for this one specific thing, or even just change this one tiny thing, then without doing any extra work, I could be making twice as much money.
And I know that kind of, you know, I can take this audience with me wherever I want to go. And I think that is the big reason that I’m seeing that you have a lot of people coming into sub stack and finding newsletters and being inspired by substance and things like that, but then quickly turning to other tools that give them that kind of, You know, give them the flexibility to actually own their audience and actually, you know, make money and give their audience what they want.
Nathan: [00:43:04]
Yeah, that makes sense. I mean, I think that’s why you’re seeing a lot of publications start really easily on sub stack and then graduate from sub stack over time. I mean, just, just last week, Mario moved the generalist often sub stack and over to convert kit and then. ConvertKit and Pico and, and, you know, collection of tools.
And then, Dan and Nathan moved every off to their own custom built platform. And so I think you’re just going to see more of that as people come in and then grow and, and, and graduate out.
Louis: [00:43:40]
Yeah, I think it is, it is, it is graduating, right? That’s how people, it’s almost, it’s, it’s a consistent word that people use. They graduate from subsect to something else, which I think is a, it’s a really accurate way of putting it, but also maybe not the best thing for sub stack as a company that. That people graduate from them when people call it graduating.
Nathan: [00:44:01]
It’s not a dig on sub stack in particular because. Like when you graduate from high school, you’re not like, Oh, that was a terrible waste. Well, maybe it depends on your high school experience. Right. But, but you’re like, I learned all of this and now it has set me up for university. Right. And, and so it’s sort of that thing of when you get started, I think in writing a newsletter, there’s so much to do, and we see this with convert kit where you’ll get someone say who has 200 subscribers.
And they’re like, let me launch a referral program. Let me, look at this crazy automation. I segment this so many different ways and they’re learning all of that. And you’re like, hi, quick point, you have one person that made it down. This like obscure branch of your automation. Like by the time you took 200 and, and branch all the way down, what you actually need, the habit you need to work on is writing consistently and publishing and promoting that content.
And that’s what sub stack has done so well. And so it’s. It’s this initial training rounds. And then once you’re at the thousand 5,000, 10,000 subscribers, and you have the writing habit, then it’s like, okay, I’m here. Now I can graduate and use, you know, a tool like ConvertKit or something else that is going to have the sequences and segmentation.
The challenge that we have is ConvertKit is building a tool that, that beginner can start on as well. cause I think sub stack has demonstrated that they can make the market so much bigger.
Louis: [00:45:27]
Yeah, totally. I love that. It’s like that analogy I just reminded me of, I didn’t know when you were a kid and playing sports, whether you you’d see those, like you’d always want like the best, you know, running shoes or like the best. And in my case, like the best like goggles or the best swimming, like, They’re like the best, like swimming trucks and stuff like that.
And it’s always like, well, you don’t necessarily need to have like the perfect best equipment to get started. You just need to actually go and practice. You need to go and run. You need to go to play and you don’t need to spend $5,000 on a pair of shoes or something like that.
Nathan: [00:46:02]
I agree. as we start to wrap up, I’d love to hear. You know, we talked a newsletter referral programs quite a bit. but I’d love to hear some of your more general advice for someone who’s starting a newsletter and maybe growing from, I should start with getting any, any advice for someone looking to get those first hundred subscribers for their newsletter.
Louis: [00:46:24]
I don’t know. I think the first 100, I, I’m almost more of a fan of, I think you should be creating content probably in other places. And when you, before you start your newsletter, I think if you’re gonna start writing a newsletter about something in particular, Most often people who get to a hundred subscribers and carry on, they get there relatively quickly because they’ve been being useful in other places, for example, on Twitter, in forums.
Maybe even, you know, physically in, in, in, in, in places like in a, in a company or somewhere like that, that may be less than them with COVID. So I think for those first 100. I, I almost think you should focus less on getting more subscribers through the door and more on things useful and creating content in other places by people can find it on getting the subscribers from there.
I think people are very, they’re very afraid to go and share this amazing blog post or this amazing email that they’ve written. In different places to stick it, maybe on medium to tweet, thread it out, to put it on indie hackers, or how can you use, or some Reddit sub forum, something like that. I think people should be sharing it much more often than if people like it.
Then they’re going to go and sign up to get more of that. They’re not going to say, well, I’ve read this now, so I don’t need to go and sign up. I think that’s something that I see a lot of people making a mistake with.
Nathan: [00:47:43]
Yeah, that makes sense. Yeah. And just building that habit of promoting and publishing consistently can start on something as easy as, as Twitter, you know, or whatever channel. So I think that’s great. Something else that I often encourage people to do is to do direct outreach and to say. Like go find, start with 10 people.
You’ll reach out directly find, find 10 20, who might want to sign up. Even if that first group is just doing it, because they’re like, not that interested in your topic, but I like you as a person. And so I’ll support your thing. And that sort of gets that initial quick momentum.
Louis: [00:48:20]
Yeah. And you know, you can also piggyback off other people, right? Like, I mean, I only have only 3000 probably subscribers on Twitter, but if someone writes something about me or mention something that I’ve said in that newsletter alongside three or four other people that I would like to be mentioned alongside, and then they tell me that’s on Twitter.
Well, I’m. Almost certainly going to retweet it and share it with people that I know. Right. And I think most other people are not too close to being as vain as I am. So I think you can, you can pretty easily piggyback of other people’s audiences to get those best hundred or 200 as
Nathan: [00:48:52]
Yeah, that makes sense. It reminded me, I’ve been seeing more like newsletter collaborations, you know, that’s something that’s very common in the YouTube world. YouTube is direct advice to creators as you should. You should collaborate. Get, bring these two channels together. You’ll both get a bunch of subscribers release one video on each channel. Have you been seeing more newsletter collaborations and how well have they been working?
Louis: [00:49:15]
Yeah, we have, we actually, it’s something that people keep emailing me about when they sign up a spot group as well and saying, Hey, do you know anyone else who has a similar newsletter? and I think that that is a really interesting problem space that also hasn’t quite been solved yet. For some reason.
I think partly because it’s very difficult for computers to work that out. But a recent one that I saw was it was again Trevor McKendrick and, and Josh Spector did it, a recent takeover that went really well, where they basically, they introduced each other in that weekly edition of that newsletter.
And then set, this is going to be a takeover in effect. Josh is going to share some knowledge here. I think you’re really going to enjoy it. So, you know, putting your personal, what behind it, your personal trust to say, this is what I’m reading and listening to. And at the end, you can go and sign up here.
So I think we are going to see a lot more of that. And I think we’re also going to see a lot more people is slightly different. I think we’re going to see a lot more people building the framework, the structure of that newsletter around the idea of share-ability. So something that James clear does a really good really well is.
Each of his bits of his three, two, one newsletter. There is a very handy link to, to share it, tweet out that thought or to share that thought somewhat. But I think we’re going to see more people building that format in to make it super easy for their readers to, to share something that they found interesting.
Nathan: [00:50:36]
It’s interesting. I was a person who always underestimated the value of a, like a tweet button or something being there. We recently added it where after you create a landing page and convert it, it has, you know, a share on Twitter or Facebook button right there. That’s prominent. And there’s now like 50 shares a day.
That show up just from that button, like just on Twitter, like, on Facebook, I think it’s actually double. And you’re looking at this and you’re like just coming from the explicit ask to share and promote makes a huge difference. So I can totally see that with James. And when he gets down to the quote or some thought, it’s like tweet this, I knew the person who originally would say like, no, if they want to tweet it, they’ll just highlight the text jumps at Twitter and do it. And the fact of the data is that that’s actually having the button and making it, having the call to action makes a huge difference.
Louis: [00:51:35]
Yeah, I think, I mean, I I’d be the first to admit I’m a super lazy person. if you give me a button and just say, Hey, you could go and do this, then I’m much more likely to do it, even though maybe I don’t think of myself as the kind of person who would be affected by that.
Nathan: [00:51:48]
that makes sense. Okay. So in the newsletter takeovers or the collaborations, I think the natural thing that I would have thought about is like, Hey, let’s do cross promotions, you know? If you’re enjoying my newsletter, you should also go check out the reason I really like these people you shared with Trevor of them.
Basically they wrote the same content, right? Cause they’ve wrote their weekly newsletter and then they just, they just purely swapped. and so it was that same great value and it wasn’t an additional lift for them. They have visits. Someone had to do the newsletter matchmaking, right. knowing each other and that sort of thing.
But I guess I also thought yesterday, Lenny rigidity, who’s been on the show before, did it with April Dunford or at least ran a guest post from April Dunford on, on pricing and strategy and positioning. And that’s such a big thing. I don’t think James talks about this a lot, but he did a ton of guest posts early in his career.
That’s how he built his very first audience was. Going out and guest posting like crazy. So I think we’ll see a lot more of it.
Louis: [00:53:01]
Yeah, totally. No, I agree.
Nathan: [00:53:03]
Are there other things with SparkLoop that you’ve seen that people are doing, that it was working really well for newsletters or, or any, any final thoughts on. Like, as you put together your referral program, make sure to do these things.
Louis: [00:53:18]
I’m trying to think. So I think there are really two things we didn’t necessarily touch on too much. That might be interesting. so the one is just that the, obviously the ease of use of the referral section is a big thing. So having the actual referral link itself inside of the newsletter and having shareable, like one click to tweet on click to, to share on Facebook, for example, having those links in there as well, so that you don’t have people, you don’t make your subscribers go and click on a button and then.
In to the referral programs that generate that referral link and then share from that, that tends to,
Nathan: [00:53:53]
is a refer. Is there has a referral for account by default, basically.
Louis: [00:54:00]
exactly. Yeah. I think that’s a big thing that some people that realize makes a massive difference and it’s often you see people who try out to referral program where there are so many steps involved to getting like for people even to begin sharing that they don’t get good results. And then they assume, you know, a referral program in general, it doesn’t work for me not, Oh, the specific way that I set this up was just super complicated for my subscribers. and then the other thing I would say that we’ve been sleeping on a bed at sparkly. We didn’t realize because no one else was doing this. Just, just how, how much potential is that is the idea of running referral giveaways.
So of having like a time limited window where you basically say, okay, instead of. Let’s say getting this reward for three referrals, this rewards for five referrals and so on saying, okay, on a Monday, email goes out, make one referral this week and you’ll be entered into a giveaway, to win whatever it is.
One of three of these, these things by Friday. So it adds in some urgency. And what we’re seeing as well is that a people respond super well to it because they think, okay, everyone can make one referral and I’m in with a chance to win this big thing. And B we’re seeing people using that either as a sponsorship opportunity.
So saying, you know, reaching out to a sponsor and saying, Hey, can you give me. So the price for this and return to the exposure and also maybe pay for that as a, as an additional advertising slots, if you do advertising or even using it to reach out to, to potential sponsors, especially if you’re a bit smaller and to say, okay, look marketing team at this company. You know, we know it’s difficult for you to get the budgets, especially to work with us. Cause we’re smaller. Why don’t you just sponsor us? You know, why don’t you give us two or three of your products to run as a referral giveaway. We’ll mention you we’ll include a link and we can use that as a way to build up a relationship.
And then let’s talk about you actually sponsoring us for money in a couple of months and that’s, that’s worked super well so far.
Nathan: [00:55:58]
Yeah, a lot of sense. I mean, thinking back to the early days of convert kit, when you know, you’re doing, we would do content marketing, right. To try to get customers, but there’s, there was no incentive to sign up. Right. Then it’s like, Oh yeah, I can work it. Now I’ll switch to that sometime this year, this decade, you know, and there, there’s no reason to do it right then.
And that’s when we started webinars where you would have some time limited thing, and you’re like, look, if you sign up for ConvertKit on this webinar, then we’re going to give you this discount or these additional bonuses or something else. And it takes this thing that someone is intending to do at some point.
And they go to like, great, I’m going to do actually do it right now. And that makes a huge difference. And then, you know, for those that don’t sign up in the webinar, you add another timeline of like, if you do it by the end of the week or, Know tomorrow or something like that. And you’re basically looking for any opportunity to take something of like, I want to do this and we’ll do it someday.
And you’re just saying great, anytime you want so long as it is before Friday, and that’s going to make a big difference. It turns out urgency matters. So I love that.
Well, good stuff. we should start to wrap up. I’d love to hear you may, if you just want to let people know one where to go sign up for SparkLoop, if they’re considering starting a newsletter, actually, if you have a getting started guide or sort of that it needs any content, around, knowing if a newsletter for our program is right for them, that would be good.
And then where people should follow you on other platforms.
Louis: [00:57:32]
Yes. So I am @louisnicholls_ on Twitter. louis@sparkloop.app is a great place to reach me. If you have any questions, sparkloop.app is the website that SparkLoop. But the best place to go. And maybe this can be included in the, in the show. Notes is actually sparkloop.app/referral-university.
And that’s a free, five email course that we’ve put together. That includes a free month of SparkLoop where you can get, sorry. My video seems to have gone for some reason. Don’t worry. It’s not an important part. yeah, basically if you, if you go over that, you can get. A, a Fremont and sparkly and also a series of five lessons where we will walk you through what a referral program might do.
See you, whether it’s the right time, how to set one up, what rewards to use and that kind of thing.
Nathan: [00:58:24]
Sounds good. That’s perfect. Well, I’m a big fan of SparkLoop, obviously, because. I invested in SparkLoop and we’ve been promoting it. And as part of creative pros, if you’re using ConvertKit and you’re on the creator pro account, you get it for free. so definitely take your newsletter, start a referral program, and you’re going to see pretty significant growth if you’ve set it up correctly with a bunch of tips that, that living food itself, Louis.
Thanks so much for joining me today.
Louis: [00:58:49]
Yeah, Nathan. Thanks for having me. It’s been great.
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