Louis Nicholls is Co-Founder of SparkLoop. SparkLoop makes it easy to grow your audience by word of mouth. SparkLoop’s email referral program is easy to set up, and gets amazing results. Sparkloop lets you focus on creating great content for your audience.

I talk with Louis about growing your audience and newsletter through referrals. We talk about how the increasing costs of Facebook ads, and competition for people’s attention, are making referrals a cost-effective way to connect with and grow your audience.

In this episode, you’ll learn:

• Why email marketing is still a great way to connect with your audience
• How to increase your email signups through referrals
• Why social media marketing costs have exploded
• The right way to use emails in your marketing strategy
  
  

Links & Resources

• Follow Pico on Twitter
• Pico
• Manuel Frigerio
• HubSpot
• The Hustle
• Morning Brew
• MailerLite
• ConvertKit
• Campaign Monitor
• Sailthru
• The Skimm
• Front Office Sports
• Bose
• Tim Ferriss
• Eight Sleep
• Trevor McKendrick
• Quora
• Reddit
• Brian Clark
• Further
• The Tilt
• Discord
• Packy McCormick
• Not Boring
• Substack

Louis Nicholls’ Links

• Follow Louis on Twitter
• Follow SparkLoop on Twitter
• SparkLoop

Episode Transcript

00:00:00 Louis:

Brands over-index on physical goods, and they don’t think enough about rewards that make people sit up and pay attention. So, there’s stuff that’s based on exclusivity, on urgency, on personality, that’s funny or humorous. In five years, pretty much every brand will have one. It becomes even more important to break out of that Morning Brew style— stickers, mug, t-shirt—kind of phase, and to have something really cool that makes people sit up and take notice.

00:00:34 Chikodi:

Hello, and welcome to another episode of the Creator Business Show. My name is Chikodi Chima. My guest today is Louis Nicholls, Co-Founder of SparkLoop. SparkLoop helps you, as a publisher, grow your email newsletter subscriber list by referral programs.

What we discussed today is that you actually don’t need to necessarily give away schwag stickers, hoodies, coffee mugs, things like that. As great as they are, a lot of times people are incentivized to share just because they get a shout out, they get recognized, or they get preferential access to somebody that they really admire and want to know better. That can grow your newsletter tremendously.

In the last couple of years, with the cost of Facebook ads skyrocketing, and the competition for people’s attention, growing your newsletter by referrals is a really cost-effective and sticky way to maintain connection with your audience, grow your audience, and grow your revenue. It’s a really fascinating conversation, and I am excited to share it with you.

So, stick around for today’s episode of the Creator Business Show.

Well, thank you very much for joining us today. I am joined by Louis Nicholls. He is today in Lisbon, and he is the founder of SparkLoop. Louis, do you want to give a quick introduction about yourself, and tell us about SparkLoop?

00:01:52 Louis:

Yeah. Thank you so much for having me here today. I am the Co-Founder of SparkLoop, one of two, along with Manuel Frigerio. We co-founded SparkLoop about a year and a half ago, nearly two years ago now. We make a referral tool for emails and email newsletters, which makes it very easy to grow your audience by word of mouth.

We’ve been doing that for about a year and a half now. I think we power, for context, probably seven of the 10 biggest newsletter referral programs out there, and thousands of slightly smaller ones. Our team is still relatively small, but growing quickly, and spread out all across the world. So, from Europe through to the other coast of the US.

00:02:47 Chikodi:

Just for reference, if you are watching this, we did not plan to both be wearing black t-shirts. That just kind of happened.

00:02:55 Louis:

Yeah, it was a complete chance. We agreed that we weren’t going to wear pants, right?

That was something we did beforehand, but the black t-shirts is a coincidence.

00:03:04 Chikodi:

That is one of the great things about working from home and shooting from the waist up. So that was, that was an agreement, but the black t-shirt thing completely random. okay. So talk to me about email, I think, and I’m sure you’ll agree that email is still the killer app of the internet.

00:03:24 Louis:

Definitely. Yes, absolutely. I think there was debate about whether phone numbers were going to take over and text was going to take over. And I think that still has some application. There are still some interesting avenues to explore with, with SMS and with phone numbers. But if you look at the trends over the last two years, we had a decade slightly more than a decade where.

Everybody was being pulled onto third party proprietary platforms like Facebook, Instagram, YouTube, and everybody was very happy building their own audiences and their own empires on top of those platforms. And then those platforms came and said, well, brilliant. We now have a relationship with your audience.

We’re going to start slowly squeezing you and to start slowly charging more and more and making it more difficult to own that relationship with your audience. And you can’t take them anywhere else. They’re locked in. And all of a sudden, everybody started realizing, wow, we need some way to be able to keep up to date with our audience.

We need some way to be able to keep in touch with them, to move them to different platforms and to, you know, really own that relationship. And what’s the one thing that everybody has, it’s an email address. So I think less two years has really been a wake-up call. And I don’t see that changing in the next five years, for sure.

Really, even in the next 10 years, I think it’s going to be just as important.

00:04:51 Chikodi:

We just said something interesting about SMS. So we think that SMS is, hierarchically inferior to email, but, that SMS is actually less preferred than email. Is that, is that a vested interest or like, explain that.

00:05:09 Louis:

Yeah, no, I mean, for me, doesn’t have a vested interest. I mean, we are an email referral platform. We could do the exact same thing with SMS, right. It would be probably one day’s work to change the entire company to just be maybe focused on SMS. It would not cost, you know, it would not be a difficult thing at all.

It’s just, I think people, they don’t like having that relationship with brands and with creators via SMS, right. That’s still very bound to your phone as opposed to, to, you know, to the various devices that you use. and it’s just, it’s not a rich medium with which to get information across. Right. It’s very clunky.

It’s it’s, it’s almost too personal people still don’t like being interrupted there. And, yeah, I, I, I just don’t see that changing. I thought there was going to, there was an opportunity maybe for that to become kind of like the defacto, but it seems to be going like swinging back in the, in the other direction, especially with, I think you’re seeing a rise of, you know, people having, most people will have maybe two phone numbers, right.

Everyone has a personal phone number and then potentially also work phone number often. It’s the same one, but some people will have a second phone before work. Most of us have a couple of different email addresses for different things. kind of different versions of ourselves, right.

Different identities. And I think that’s, one of the main reasons that, you know, that email is just such a, I think it’s just so sticky. I think it’s going to be very hard to get rid of.

00:06:38 Chikodi:

You know, as you say it, I definitely can relate to not wanting, like there aren’t really any brand, like maybe my local restaurant or something could text me and get me to take action, but I do actually resonate with your point about how it is too personal to have that relationship with a party that just wants to sell me stuff, on my phone, but I don’t have a problem filtering it through email, so yeah.

Point taken for sure. Talk me through the journey of SparkLoop. Email is now 45 or even 50 years, in its life. And SparkLoop is two years in its life. And email newsletter is having quite a moment with, you know, very big startups being grown on the back of email servers, servicing people through email.

So what was it, what was it about this moment and your background and your co-founders background that led to the creation of SparkLoop?

00:07:44 Louis:

Yeah, for sure. So I would say as the background, my co-founder at the time that we started SparkLoop, he’d been running his own referral platform. That was just a generic referral platform. You know, you could, you could connect it to any kind of business to do referrals really. And that’s still today what the bulk of referral platforms.

I like that kind of like a, like a Swiss army knife. Right. They, they, they kind of do everything and it, you know, you can kind of plug them in and kind of make them work to do everything. And what we saw, which I just touched on was you had this kind of. Shift of like a couple of different things happening at the same time.

Firstly, you had kind of that effect. We talked, we touched on about like the platforms, the third party platforms becoming more restrictive and brands kind of waking up to the fact that, oh, well I need to own the relationship with my audience. I need to have their email addresses, which means all of a sudden, about two years ago, three years ago, people really had this big shift that we need to start collecting email addresses, smaller audience, and we need to start doing it now.

So that was kind of like the demand bubbling of that originally. And if you look at how a lot of these big brands started out over the last five years or so, a lot of that was done by a. Marketing. So social media marketing on Facebook, for example, by Google Instagram, in some cases, even Snapchat at a time, probably a bit at the moment, it’s still a bit of tick-tock going on.

And that was relatively affordable. Now that everybody is trying to do this at the same time, and Facebook are pushing up the prices and you had all the iOS 14 changes around privacy that came in Facebook has become an all the other channels like that have become very, very expensive. So you have a lot of people who are desperately trying to get more email addresses at the same time, as you have it becoming very, very expensive to get more email addresses.

And at the same time as all event going on, you also have kind of a shift in kind of the preferences of consumers to hear about this kind of thing from friends and from people they know, and they trust, and for brands at the same time to really be thinking slightly more long-term to be thinking, okay, you know, a bank, for example, someone wants told me, you know, a bank is quite happy having a 20 something year nurturing cycle for their customers, right?

They will happily start advertising to you when you’re 10 years old, knowing you’re not going to pay them a cent until you turn 30 something and get a mortgage with them that’s built in. They think in 10, 20 years cycles, car manufacturers, people like that as well, right. They think in 5, 10, 15 year cycles, As an industry on the internet, we have been a lot, you know, because we’re, we’re earlier, we’re much, much younger.

We have been a lot faster in how we think, we think in terms of like minutes or three or four clicks, maybe a couple of weeks, you know, if you, if you’re nurturing for awhile, e-commerce brands, maybe thinking in weeks, we’ve seen a shift. I think as the industry matures over the last couple of years to start thinking in terms of maybe even months, potentially some brands are even thinking in Year’s right.

That’s why you see HubSpot buying the hustle as a That’s why you see a morning brew getting sold off. And we, you know, you see brands building out media arms, basically because they’re thinking more long-term about customer acquisition. And you just put all of that, that we’ve just talked about together.

And basically it’s kind of inevitable that, you know, over the last two or three. Somebody had to come up with some way to help brands get more email addresses using word of mouth. we definitely weren’t the first to invent this referral programs had been around before you had, companies like morning brew.

For example, you had to spend, you know, ridiculous amounts of time and money to build their own simple version of this in house. And basically what happened was I had people coming to me just with a marketing background and the background is the founder saying, Hey, Louis, how can we do this thing that morning brew and the hustle of doing, but without having to hire someone full-time and spend tens of thousands of dollars.

And I went out to my friend, Manuel, who was running a referral tool and said, well, you know, you’re a clever guy. You’ve got one of the good referral tools out there. Can we do this, if not, who should I go to? And he basically said to me, look, you can’t do this without tool. There’s no really good tool for us out there that wouldn’t involve a lot of work.

But funny thing, you’re like the fifth person who’s asked me that this week we should look into this and see if there’s some way to do it. And we kind of played around with it on the side for a couple of months and then realized, oh wow, this is actually, you know, there is a massive market for this that is performing ridiculously.

Well, we should kind of go all in on this and then see what happens. And yeah, that’s the, I guess the longish version of the story.

00:12:32 Chikodi:

No, that’s great. So it’s a perfect storm, really, because brands are recognizing perhaps too late that there’s never not a time when it’s good to have. People’s email addresses the costs and competition for attention via paid ads was getting intense and then people’s preferences have also evolved to not necessarily want to be targeted in that way.

So it sounds like there was just all, all signs pointing towards, this is the thing to do. And you guys took the loop or sorry, you took the leap and the, it was the right move. How does, how does SparkLoop actually work to generate word of mouth referrals for an email?

00:13:21 Louis:

Yeah. Okay. That’s a great question. So if you have an audience, many kinds of email, you know, you will be sending them regular emails, hopefully, probably not as often as you should be doing, but, hopefully that will increase as well. And what SparkLoop makes it very, very easy to do is to give every single email contact.

You have a unique referral link that they can share with friends, colleagues, strangers on the internet, people isn’t next to the bus stop. It doesn’t matter. They can share that with them. And when those people sign up and give you their email address, basically you get a referral points or your subscribers get referral points.

And as they refer more people. They can unlock rewards. They can be entered into giveaways. Basically you can incentivize them with different things for when they, you know, when they share, when they make referrals. we basically, we make it very easy to connect that up to whatever email platform you’re using.

We take it from, you know, what would normally be a couple of weeks and some serious developer time, even with these generic platforms into something that literally takes about half an hour and a couple of clicks.

00:14:28 Chikodi:

And I saw on the site, it’s, a Webber mailer light. do you guys do, convert kit as well?

00:14:37 Louis:

Exactly. Yeah. ConvertKit HubSpot campaign monitor the sale through all the, all the big ones. They, yeah.

00:14:44 Chikodi:

And why would a word of mouth referral a trackable referral be the preferable way to grow an email?

00:14:53 Louis:

Yeah. So I don’t think it’s the only way by any means. Right? I kind of see it as you need to be doing other things to grow your email list. Probably you probably do want to be whether that’s Facebook ads, whether that’s sponsoring other newsletters, whether that’s, you know, promoting your content on social media, sharing it, you know, working with influencers as a whole different load of ways to, you know, to grow your brand and to get the word out there, to bring people to your site who will then sign up and give you their email address.

What we do is we basically say, look, There is a group of people who you are in regular contact with who know a lot of other people who would be perfect subscribers and customers and members of your audience. And you’re in contact with them all the time. Why aren’t you asking them to share firstly, and why aren’t you incentivizing them a little bit to share, instead of giving that money to Facebook or someone else, you know, who, if you give Facebook money to get, to bring your new subscribers, you don’t build a relationship with Facebook, right?

That’s not engaging them more. Right. If you do that with your existing audience, you build up a, you know, a really engaged,

Kind of, you know, really, yeah, just a really engaged audience, right? Because they’re, they’re the ones who are sharing. They’re sharing with friends of theirs and people they know who are naturally a good fit.

So. It’s normally we do have cases where this is the kind of thing where it does just take off. And it just is the thing that completely, you know, it’s by far and away the biggest channel, but more realistically, what we say is if your business, if your email newsletter, if your brand is already growing, a SparkLoop referral program will make it grow. You know, 30, 50, 60, 70% faster. It’s going to make what’s already good, a lot better. And it’s very easy. So you’d be very, very silly not to do it, but it’s also not some kind of magic bullet that’s going to save you if nothing else is working,

00:16:46 Chikodi:

Right. Yeah. If nothing’s working then, might, slow down death, but you have to have other, other aspects that are performing as well. yeah. So you just made me think, I don’t know if the hustle still does it, but you know, post, post acquisition by

HubSpot. I don’t know if that’s still, still does it, but I think that they used to call out people in the newsletter that would refer lots of people as a new subscribers.

And even though it was a free, even though it was free, people’s attention is a scarce resource. So. And I think, the S I don’t read the skim anymore, but I thought the skin was a very good newsletter as well, but they definitely had a section in the bottom where they would name people. And that’s a really powerful social lover to, to incentivize people.

And it doesn’t cost anything.

00:17:41 Louis:

Definitely. Yeah, definitely. It does two really important things. So like you said, that’s an incentive in of itself, right? People want to be, to be seen and to be recognized as successful in front of their audience, but almost more importantly, what that does is it normalizes the behavior of shack.

Right. So if it seems like everyone else is sharing and that they’re doing it successfully, and that’s something that in-group is doing you as someone who is on that newsletter or who is in that audience thinks, oh, I should probably be doing this as well. Or it would be normal for me to be doing this as well.

And I think that’s what makes it really effective. I think that that is why it’s so useful to do.

00:18:23 Chikodi:

Yeah, that makes a ton of sense. so you were saying that another lever is that instead of giving money to primarily Facebook, but I suppose there’s a little bit of Twitter, a little bit of, you know, other platforms, but Facebook is definitely gobbling up. Most of these ad dollars, you can then incentivize with like t-shirts or stickers other merchandise.

So does SparkLoop actually help with any of the fulfillment? Is it really just like here’s the person to give the, reward to now you go handle that.

00:18:55 Louis:

Yeah, it’s a great question. So what will normally happen is if you are going to be successful with that kind of physical reward, like swag and merchandise and stuff, going to happen because of one or two things, firstly, you’re either already going to be giving away that stuff, or you’ll probably have some kind of online store because people will be asking you for it.

That’s how, you know, it’s going to be a good reward. In which case, if you do have that sparkle, it makes it super easy to fulfill that kind of reward. It basically, you can just give people when they reach that number of referrals, an automated email with a unique coupon code that they can use to go and get the thing.

Right. that’s very easy. The other thing we see often is that people brands will partner up with other brands to fulfill the rewards. So you’ll see, I dunno, a front office sports, for example, partnering up with Bose headphones or you’ll see Tim Ferriss recently partnering up with. I think it was eight sleep or it was one of those kind of DTC mattress brands, something like that, to, to fulfill the rewards.

So they’ll be doing it that way. And then obviously if you’re giving away, you know, creators everyday creators might be giving away more, access to exclusive content. For example, sneak previews of new books or courses that are being launched, free memberships, access to secret newsletters, coupon codes with our online stores, a free trial a month of the premium upgrade, something like that.

That’s all really easy to do with and automate with sparkling as well. Yeah.

00:20:29 Chikodi:

Okay. So, Brands partner with publishers will call these newsletter, publishers or newsletter, creators, publishers. And then they handle the fulfillment of well, it’s like, it’s a nice synergy, right? Because the brand partner gets additional exposure to the audience and then the fulfillment and, processing doesn’t need to be handled by the publisher.

Correct.

00:21:02 Louis:

Exactly. Yeah. I mean, if you’re a, you know, if you’re a brand, if you’re a DTC brand, right. If you have a, I don’t know, some kind of like some bus, the new water flavored, like bottled water brand of

00:21:15 Chikodi:

Yeah.

00:21:16 Louis:

Yeah, exactly. So if you want, if you’re one of them, you can either pay for an advertising slot to each of the audience, and it’ll be a small sponsored section, or you can pay the same amount, give, you know, a year supply of the water, which costs you hardly anything, for free to the winner of a referral giveaway.

And you’ll get a big section where you’ll be promoted as the price. And it’ll be, you know, to be looked on a lot more favorably, right. People will take notice of that when they’re reading the newsletter, because it’s presented as something really exciting, rather than being presented as an ad, which we, you know, we often like to skip over in some cases.

00:21:54 Chikodi:

What excites you about this moment for newsletter publishers?

00:21:58 Louis:

I think people are starting to. Realized the value of having a brand, an immediate brand with people who can write really well and have a relationship with your audience rather than just producing content. I think if you look at the last 10, 15 years, there has been a lot of content produced by a lot of people and not very many strong relationships built with what audiences.

And it is very difficult as a, whether you’re a software brand or B2B, DTC, whatever you are. It is very difficult to suddenly change that mindset and to build a brand in house. And I think that’s why you’re seeing that as a really big opportunity at the moment. On the one hand, if you’ve already built a media brand to yes, start monetizing that more aggressively yourself by building out your own product.

But also to be, you know, to be bought and acquired by one of these larger brands that, that doesn’t have the skillset really, to, to do that in house. And secondly, if you’re more on the smaller side as a creator who is starting off today, I think you just have so many really easy opportunities to monetize and to partner up with brands that you just didn’t have even three or four years ago.

I think it is. It’s still very difficult to get eyeballs. It’s still very difficult to create really, really good content and to build that relationship with your audience, but the monetization side of it has become infinitely easier. people are much more willing to pay for subscriptions that are much better tools out there to manage those subscriptions.

Much better tools at that to grow your audience, people, you know, courses, online courses,

Even just creating your own, like you want to create your own like much brand or your own, like physical product that is just so much easier. And there are so many more better examples of that today than the word two to three years ago.

00:24:04 Chikodi:

That’s a very short cycle, two or three years of, of this, this change. what kind of objections or what kind of pushback do you get from people when you approach them about creating a referral program for their email newsletter?

00:24:24 Louis:

Yeah. I think the biggest one we see probably is morning brew and the scale of the ones we mentioned before, they’re a blessing for us. And they’re also because they’re a blessing in the sense that because they got very big, very quickly and they also had a referral program and they were really one of the first ones to do it.

Everyone is kind of excited by the idea they’re a curse for us because everyone assumes that the way the morning brew did their referral program with swag and much stuff like that is the, the best way to do it. And this is the way that you would do it. And because of that, you get a lot of smaller media brands and larger media brands and creators and publishers who basically come to us and they say, look, I like the idea of referrals, but I don’t know.

I can’t justify spending $50 on a hoodie. And I don’t think my audience would want a hoodie anyway. You I don’t really want t-shirts or stickers with my logo on it And that is kind of the cusp of it, which is to say, you know, yes, those did work from morning brew and they’re doing fine, but the average spot loop user grows that audience faster with referrals than wanting did.

And most of them aren’t paying. Much, if anything, for their rewards they’re using, you know, we’ve spent the last two or three years since then learning all about what actually does work for thousands of different kinds of creators and publishers and media brands. And it turns out that really you can do very different things that, that work for your audience.

You can have exclusive content, you can have early access to specific things. there there’s just a whole world of different what ideas out there, and there are guaranteed, guaranteed to be a couple of things that will fit in with your audience and your brand that you can use. So it’s kind of like a personal challenge.

I always liked to take people up on that and say, Hey, well, you know, you don’t think you’ve got rewards that would work for your audience. Let’s spend 15 minutes on a call. Let’s go through a couple of different options. Talk about, you know, how you monetize, what your audience is excited by, that kind of stuff.

And we’ll see if we can’t find something and I’ve never had a creator or a publisher do that.

As long as they have already happy, you know, as long as it’s not their first edition right there, as long as they’ve already started and started the newsletter, I started that the media company, I’ve never had someone who hasn’t immediately kind of said, oh, of course, yeah.

I could do those, those three or four things. That would be, it would be really cool. Yeah. So that, that would be the biggest kind of, I guess, obstacle, roadblock, stumbling block that people have my phone.

00:26:55 Chikodi:

You don’t have to be the skim. You don’t have to be the hustle. You don’t have to be morning brew. And in fact you’ll grow faster than they did just from a cold start. Huh?

00:27:05 Louis:

W you, you call it, be wanting brute, right. Morning brew breaks the rules, really of everything. And I wouldn’t even try it and attempt to emulate what they’ve done. I think they are really, really smart team and they’ve done some really amazing things, but they have a very unique relationship with our audience that no other brand really does have with their own audience.

And because of that, you need to try very different things. And I don’t think that’s a bad thing. Yeah.

00:27:31 Chikodi:

What are the three most common things that an email newsletter publisher can do to incentivize referrals? Signups.

00:27:40 Louis:

I would say the most important one. By far is to have a really good first reward. It’s what we call a trigger reward.

And that’s the very first reward that someone would have went for a ferret. Normally that’s for one, two, or at most three referrals that they make. So it’s something that everybody thinks they can achieve just by sharing to Twitter or LinkedIn or in a group message and a slack channel.

Something like that. All you have to do is share it with, you know, with one click from the email and that pretty much guaranteed to get it. So having something really compelling that ideally something digital that doesn’t cost me anything, is really, really important. That would probably be number one.

Number two is actually nothing to do with the rewards at all, but would be more in the opposite direction. So. Even if I weren’t going to be rewarded for sharing this with my friends or my colleagues, why would I do it anyway? Give me something really interesting to share with them. Give me some motivation, make it really easy and tell me who I should be sharing it with and why.

Right. If you do all of those things, most of the time, a really good referral program, it does require good rewards, but it would have done almost acceptably. You would’ve seen some growth, even if you hadn’t been rewarding people for sharing, because you’ve done such a good job of explaining. Don’t just send people to some, you know, okay.

Newsletter signup form with a one-liner explaining the newsletter, send them to a downloadable, a book, a coupon code. If you’re an e-commerce brand, right. Ask people to share a $10 coupon code with their friends, ask people to share the first chapter of your book or an invitation to an upcoming online event or something, whatever it is that you have.

And people know this right brands, know this, when it comes to Facebook advertising that not sending people to the newsletter page, that’s sending people to some kind of, opt-in some kind of lead magnet, some kind of a gift thing. And then when it comes to referrals, they don’t think about this at all. But that’s really important is to give people something really compelling to share with their friends and to tell them who and why they should be sharing it.

And then I would say probably the third kind of most important thing. I would probably go back to just making it easy to share and asking people to share what often. So make it obvious inside of your email included in a lot of emails and. don’t have any friction. And that’s one of the reasons that a SparkLoop referral program on average, it performs about 230% better than other referral tools email.

And the reason that is, is because we make it very easy to literally copy and paste your email, your, your referral code, or to click a social sharing option. For example, on Twitter with literally one click from inside the email, we’re not sending people to click on a link to go and opt in to add your email address, to create your referral link on a page, to then grab it to then share it.

Nobody’s got time for that. It’s way too complicated. Just say, look, here’s what you’re going to get here is your link. Here is a, one-click really easy way to share it and tell them to do that a lot and surprise, surprise. If you do that, it’s going to work really well.

00:30:50 Chikodi:

Anything else?

00:30:51 Louis:

No, I would say those are the, probably the main things.

Yeah. Oh, the one thing I would add on way I’ve just touched on quickly, but I’ll, I’ll touch on like weekly again, brands over-index on physical goods, especially like the stickers and stuff like that in most cases. And they don’t think enough about rewards that make people sit up and pay attention.

So stuff that is based on exclusivity, on urgency, on personality, that’s funny or humorous. As more and more brands have referral programs. And I think, you know, in five years, pretty much every brand will have one. It becomes even more important to kind of break out of that morning brew style stickers, mark t-shirt kind of phase, and to have something really cool that makes people sit up and take notice.

So we had, for example, Trevor McKendrick has a great, newsletter and blog of his own. And one of the things that he did that was really cool was he said, look, if you make 2000 referrals, I will buy you a billboard in San Francisco for a and you can have whatever you want on that billboard.

And no one achieved it. I don’t think, I don’t think anyone quite got that people got close, but I don’t think anyone got there. And, but still that made people talk. They’ve got people sitting up and saying, Hey, I want that right.

00:32:02 Chikodi:

Yeah, because who knows 2000 people that they can influence to sign up for a newsletter.

00:32:07 Louis:

Yeah, but I mean, it’s rare, but it does happen.

Yeah.

00:32:12 Chikodi:

Although there’s, there’s that case study of, people doing jet.com referrals for, you know, I think a million dollars of jet stock and then jet got bought by Walmart.

So the guy who spent, I don’t know how he came up with like $240,000 or something to promote his, his referral code. But, you know, he did spend an inordinate sum of money on

Facebook advertising for his referral code and he did win and it did pay for itself. And then some.

00:32:42 Louis:

Yeah, we’ve seen people do similar things, you know, posting on Quora, answering, you know, things on Reddit, stuff like that to, to drive people that, if it’s something really interesting, like, you know, a half an hour session with your favorite author, for example,

00:32:57 Chikodi:

Yeah.

00:32:57 Louis:

People will will go to a lot of lengths to, to do that.

00:33:00 Chikodi:

Okay. That’s that’s a great point. So You just said that brands over index on physical incentives in order to generate referral activity. Why do you think that is?

00:33:11 Louis:

I think it does. And I feel like I’m, I’m, I’m beating on morning brew here and I’m not, cause it really works for them. So they were clever in the way they

00:33:19 Chikodi:

Josh Kaplan from, we had Josh Kaplan, formerly of Morning Brew on the

00:33:23 Louis:

Yeah. And they have an amazing team, super talented, especially the people who set this up. So they did what was right for them. But my point is that audience, especially in the earlier days was kind of college, age kids, college, age kids, they love branded merch. They love free clothing and they don’t have particularly a lot of disposable income.

Most people have running newsletters or especially if you’re a publisher with a paid media thing going on. People buying that probably, you know, even with that, maybe still quite young, maybe they are only 25 30 or so. They’re still, probably pretty well off. They’re not as motivated by getting a free t-shirt or a free mug as maybe you think they are, they don’t need that $10 discount or, you know, if they wanted to buy your book, for example, for $8, getting it $5 cheaper or getting it for free is not really going to motivate them because I mean, that’s what is literally a coffin or something, right.

It just doesn’t move the needle, but access to something that they couldn’t get otherwise or access to something earlier, you know, that money couldn’t buy that is, is really powerful. That is, is, you know, it’s something that makes them feel special, brings them closer to you and is something that, you know, it’s, it’s just to them, it is worth a lot more.

So I think that’s mainly the reason as well.

00:34:39 Chikodi:

In my observation, that is very, very true now, because if you’re a college student, I guess you’re back on campus, most likely. So then you’re going to be potentially wearing that branded item and other college students who are of the audience are going to see it. But if you are of a different demographic, you’re not in school, you probably, unless you’re going to the gym or something like that, you’re not going to necessarily wear branded items.

And you’re not going to have the same kind of peer group where it’s like, oh, I see, you’ve got that, you know, I guess the new Yorker tote is kind of a, a flex it’s kind of a status symbol. It’s, it’s a, it’s a Shibboleth, it’s a, it’s a, it identifies you as part of an in-group, but there is not that same value of advertising for brand when you get older and into your career, but that exclusivity and that access there’s two, you know, there’s two parts to it now where as the pandemic continues to keep us separate, people are more comfortable going online and having a relationship online.

And secondarily people can’t necessarily access the people that they would have. They would go on a book tour, musicians would tour DJs would, would do appearances, but now that’s all online and that’s available to everybody, but what’s not available to everybody is what’s really special. And it doesn’t actually cover.

The producer anymore. If you’re an in demand author and demand DJ, and you say, I’m going to set aside an hour for my number one fan. I’d like it to be you, you can definitely get a lot of competition. Just like you said, that 30 minutes, is, as a, a matter of scheduling for the PR for the person, but for the person who desires it for the audience, there’s, you know, it’s priceless.

00:36:33 Louis:

Yeah, no, definitely. And you know, I want to be careful. I’m some of the bets rewards, we see a branded swag, right? It does work well when it works, the thing is with that, you do have to have the right audience for it. You have to have seen that there’s demand for it. What you can’t do or better said it works well for morning brew because they were very, very good at branding.

People really resonated with fat Brent. That’s why people like to buy sneakers with a Nike swoosh on it, for example, right. because they resonate with the brand and it’s part of their identity. Most publishes haven’t put much energy into branding. You know, people will absolutely love reading the emails, but they could not tell you what your logo looks like.

And if you’re one of those people, well, probably start building the brand and try and move away from the personality driven thing, because it’s going to be hard to sell otherwise at some point, if you don’t, but secondly, you can’t then expect everyone to want your logo on a hoodie because they don’t even know what your logo is.

Right. No one else know what that is. It’s got to be, you’ve got to have the brand cache to, to be able to pull it off, which, which morning brew definitely did. And they’re one of the very few the skim did as well. And the hustle. They did a really good job with that.

00:37:49 Chikodi:

Yeah. Well, one of the things that communities and audiences are really starting to gravitate towards are NFTs. Have you guys thought at all about, and if ti rewards for. Community participation or referrals.

00:38:06 Louis:

Yeah, we have seen people doing things like that. We’ve seen people, I don’t know all the words from this kind of stuff. So I’m going to expose myself as like an old Luddite here, and that was fine, but I mean, you know, we’ve seen people who’ve, or creators and publishers who’ve you meant your own coin that they’ve made their own coin.

And basically as you make referrals, you will be given the, the equivalent of, for example, $5 USD in that coin, in the create coin or something. So, Brian Clark, from further, for example, he does a really good job at doing that. We’ve seen the tilt do the same thing with their own version of a coin. we’ve seen people auctioning off, you know, like more popular NFTs, for example.

I don’t know that we’ve seen yet. Somebody’s, kind of. W who, you know, minting their own NFTs and giving them out for referrals, but I’m sure it’s, it’s probably has happened. I’m just not aware of it yet. so I do think there’s something very interesting in that space, because again, that is that perfect storm of exclusivity community.

And if, I think if we’re honest, a big poll of a lot of the NFTs today is less than it’s not so much the, the

NFT itself it’s access to that community, that discord channel with the person who, or the people who set it up, right. It’s with, people who you normally wouldn’t necessarily be in a discord channel with and chatting with as an equal.

So I think that is all, you know, that, that, that kind of encompasses all of the stuff we’ve been talking about that makes a good reward. So I think we are going to see a lot more of this as, as, as the next year or so progress is for sure.

00:39:51 Chikodi:

Anything, that people are making money off of people that kind of get excited about. Right. But the NFT moment that we’re in, like you said, access to a discord server or, you know, access to a physical club that is only peopled by folks who own a token. you know, also the visibility of it, there’s just a lot of, a lot of human behavior and incentive behavior that is really encapsulated in this new technology.

So it’s, it’s exciting and

00:40:25 Louis:

It’s all the things that talking about. It’s scarcity, exclusivity, branding, like, you know, identity to a certain extent it’s community it’s access to, to people you want to spend time with it’s. Yeah. It’s, it’s almost, you know, the perfect kind of blend of, of all those things. So I’m sure we’re going to see a lot more of it.

00:40:42 Chikodi:

And then what’s next for SparkLoop. What are you guys working on in, in, you know, Q4 Q1, 2022 onwards.

00:40:51 Louis:

Yeah, it’s, it’s, it’s fun. So we, at a really, really interesting point, I think it’s about for the first year, what we really wanted to do was we wanted to say, look, morning, brew the hustle, skim. They created their own version of a referral program that works for that cost. A lot of money takes a lot of developer time to build it.

And there’s a risk that it just doesn’t work out. In some cases, some people did this and it just didn’t work for them. How do we make basically the easiest, most efficient way for you as a, as a publisher, as a brand to replicate exactly what they’ve done. Right. And that’s what we did in the first year.

And we’re now in this really interesting place where for the last six months, You know, we got to that point, right? We got to the point where basically we could say, look, you can use our tool. And in an afternoon for starting at $99 a month, you can get on average, slightly, slightly better results than, and you’ve, you know, I’m wanting to bring on someone with your own brand and took us a year or so to quite get it right with all the platforms integrate with.

And now we’ve managed to move into the world, I think is a way, way more exciting phase for us, which is to say, look well, We power. Most of the big newsletter referral programs out that we power, you know, thousands of, of pretty sizable ones, but seeing people trying different things all the time, we’re getting suggestions about what people could do.

We’re getting people trying to like break the platform. And we had ways by trying to do things we’d never thought about before, around like creates a coins and all this kind of stuff. Right. And so we’re in that really interesting place where over the next couple of months, the next six to 12 months, especially we’re starting to roll out these things, right?

So the things that someone has managed to hack together on top of SparkLoop, that’s working really well for them. We’re building in, right. We’re doing all of that kind of stuff. We’re constantly developing on like the anti-fraud systems as we bring in. You know, if you have all that data from these really big newsletter referral programs out there, and you see all the weird ways that people are trying to cheat different systems, We can use that to make the, you know, the anti-fraud that we have even stronger.

Right? So it’s, it’s kind of, there’s an element of that. Just improving it based on now that we have all the data and the results, but there’s also just looking, what are the most exciting things that are going to power, you know, the next morning group basically, or the next 20 morning bruise, what we’re different versions of our federal program.

I’m going to do that because I think in three years, that will be a next morning group. And I think they will have a referral program. And I think that referral program will look completely different to what the, morning brew did. And I think, I hope that we will be the, you know, the ones who power that, and probably the ones who, who, made the suggestion of what to do.

00:43:30 Chikodi:

Nice. And then what’s the, what’s the skill set non-technically for someone to really master referrals, because we talked about scarcity. We talked about, you know, that desire that comes along with belonging to community, having the visibility. So what’s the, it’s much more in the behavioral realm, in the human psychology realm.

Well, what are the, you know, what’s the background of someone who can create a really powerful for a program.

00:44:00 Louis:

Yeah, I think there’s that there is an element of just experience being useful. Right? And that’s why we, we try and ask, publish some creators to spend some time with us, to look through the different options, just to be aware of what’s available. And we do to a concierge onboarding, which makes a really big difference, but I don’t think it is.

I don’t think it’s, it’s, it’s not such a specific skillset. It’s more about how do you find the person who really understands that specific audience. And that person is always the publisher or a publisher, you know, who works really closely. If you can write the content that you know, or you can create the content that, you know, those people are going to really, really love and respond to and be super excited by then, you know them well enough to know what kind of rewards would work really well to motivate them to share, right.

You know, what they should be sharing to get other people to sign up. So I think if you are really good at the. Content creation on the content production side of things for your audience. Then you will also be naturally with a little bit of pushing and a little bit of help, really, really good at coming up with referral rewards as well.

00:45:10 Chikodi:

Going back to your, your Twitter, which I was reading before about cold email. I, this is a little bit off topic, but what are your thoughts about cold email?

00:45:20 Louis:

My thoughts and cold email, I guess you can, you can sum up by saying, I think that the best cold email is a warm email. And I think this builds on the same trend that I was talking about before of companies and brands in the internet space. Now starting to think slightly more longterm and realizing, Hey.

Just blasting out 10,000 cold emails a day for three months until the VC money runs out. That’s what, I’m not asking you to work anymore because everyone else has tried it and people are fed up of that and it’s not going to lead to a sustainable business. And I think what we’re seeing now is kind of a divergence where.

There’s an arms race on the side of the brands that cost slightly less than half, you know, a lot of money behind them, where they are basically looking for new tactics all the time and escalating it to actually get people’s attention in their inbox to kind of trick them into thinking, you know, this might actually be a real email with something interesting.

I knew it’s crazy there. Right? You’re seeing people like that doing customized videos and customized automated images that have been photo-shopped in with people’s names in, and, and stuff like that. And, you know, completely fake AI videos directed to that person, you know, as if they were actually really addressing them.

You can own the escalate that so far, it costs a lot of money and it takes a lot of energy. And on the other hand, you have people who’ve completely said, well, look, we’re going to stop doing this kind of like mass spray and pray approach. And we’re going to have people get to know their audience. We’re going to have them, you know, build a relationship, follow them on Twitter.

For example, really get to understand who they are. Reach out only at the right time when we have something we know they’re going to be interested in, try and make it something that’s helpful. you know, something for them providing value rather than hitting them with a sales message on day one, and then just hammering it home six times, hoping that they’ll eventually open it.

And by, um I think taking that more long-term approach saying, Hey, look, here’s something for free. I’ll email you again. Next time when I have something really useful. And at some point it will be the right time for you to purchase. And when it is, you’re going to come back to us. Cause, you know, as a, you trust us.

I think that’s going to be that, you know, the future. I hope we will see on the outside. So I do like cold email, but, I think there’s a, a long way to go to make it, make it useful and to make it at that point. When you do send the cold email that it comes across as if you knew the person, it doesn’t feel like you call email.

00:47:51 Chikodi:

There was actually something else on your Twitter that I resonated with, which was that you don’t unsubscribe from most email newsletters.

00:47:58 Louis:

Oh, yeah, no, I, I, it especially cold email. I, I, I find it so useful to see, you know, I’ll read them just as if, is it like a, like a normal person basically. And then I will think to myself, why did I stop reading here? Or why,

What was the point in which I stopped trusting that person or where I, what was the sentence where I kind of tuned out and went, oh, this is a spammer. Right? And looking at that and seeing things that I like afterwards, reflecting what I found interesting or bad just makes my own kind of, you know, email skills much, much better. So I really appreciate this.

00:48:35 Chikodi:

I liked that. I liked that, myself, I feel bad. Sometimes when I unsubscribed from an email, I signed up for it for a reason, even if that. that’s no longer the case, I’m not getting the same value. I often do feel like oh, are they going to check their subscriber log and see that I personally unsubscribed.

But I really like that, that you have something to learn from every single email. I also saw one of your tweets that you said that sometimes a cold email can ruin a person’s day. So be really careful about that. Like, if it’s, if it’s, if the tone is off, if the message is not one of value. So yeah, it sounds like there’s a lot.

I mean, it’s just like in it’s it’s such a delicate balance because there are those moments of community participation from an email newsletter, and then there’s just so many. The letter newsletters that come in and so much spam. So it is kind of miraculous, in fact, that so much value in human connection can coincide in an inbox full of spam and fake insurance offers.

And you know, who knows what else?

00:49:49 Louis:

Yeah, definitely. I definitely, I think a lot of those, you know, at the end of the day, they will just stop being opened. Right. I think people are going to get punished for that more and more, and just taking the time to, you know, generally, genuinely have that connection. It’s going to become even more important

00:50:03 Chikodi:

Awesome. Well, I know you said you were under the weather and, I’ve really enjoyed this conversation. Is there any closing words you want to, you want to leave us with any, any promotion you want to do for SparkLoop or any, any tips for people that see the value of growing their email newsletter through referrals?

00:50:23 Louis:

I mean, obviously if you are interested, I would say definitely check out SparkLoop.app, which is our site. And you can find me on Twitter or [email protected]. If you have any questions, especially around rewards or would this work for me, that kind of thing. Always very happy to, you know, do a quick kind of strategy, email or a strategy call and see if it’s a, if it’s a good fit.

I would say that that’s probably pretty much it. I mean, we, we have some exciting stuff coming up over the next couple of months with Pico as well, which I don’t think we’re quite ready to announce, but there’ll be some, some more fun integrations on that side too. So, stay tuned for that for sure.

00:51:03 Chikodi:

Outstanding. So Louie Nicole’s underscore on Twitter, [email protected]. If you want to do a strategy strategy call what’s the ideal, size of publisher that, can really benefit from a, a strategy.

00:51:20 Louis:

Yeah, I would say it depends slightly on how you monetize, but if you have 20,000 email subscribers or more, you should definitely, definitely be talking to me or somebody very like me. And then if future, if you have 5,000 or more, you should probably be looking into it and at least making a timeline of, of, you know, when you’re going to start with this.

And if you are at under 5,000, you know, anywhere between 1,005 thousand, it really depends on how aggressively you want to grow, how seriously you’re taking it. it can be a good fit, but also really, you know, we say that it’s a no brainer from 20,000, then it’s probably going to be quite RLI positive from 5,000 Up.

00:51:58 Chikodi:

Fantastic. Fantastic. Just a personal question. Are you working with Patty McCormick and not boring?

00:52:04 Louis:

No, actually we are not. He is still, I think on Substack, and Substack is not a platform we can support, basically. So, what he’s done is, he is using one of these generic referral tools out there. And basically he’s doing what we don’t do, which is you have to click on a link that takes you to a page, you sign up and create a referral account, and then you can share.

There’s nothing philosophically wrong with that. it’s just the results absolutely suck. It’s a lot of work because you have to manually import and export people all time. So we looked at it, and we looked at the results people were getting, we were like, I don’t feel almost ethically okay offering this as a solution.

So until Substack sorts out their feature parity, and builds out that functionality to be on par with the better email platforms out there, we’ve just said, “Look, no, we’re not going to do half measures. If you’re with us, it’s going to be the best experience by far. You’re going to get way better results.”

But if we can’t provide that, then we’re just not going to support it at all.

00:53:09 Chikodi:

Too much friction.

Well, thank you very much, Louis. It was a real pleasure to speak with you about indicating value through creating a sense of community and scarcity. How people can refer their friends to an email newsletter, and that the rewards don’t always have to be physical.

It really can be just getting a shout-out from the publisher, getting exclusive access. I do understand now that there are tech tools that make it so much faster and easier than it’s ever been, and that this is really a very ROI-positive way to grow. So, I really thank you for your insights today.

00:53:50 Louis:

Yeah. Thank you so much for having me. It’s been great. Hopefully we can do this again at some point in the future.

00:53:56 Chikodi:

Yeah, it sounds like you’ve got something coming up with Pico, so maybe we’ll get to announce that on the show in a couple months.

00:54:01 Louis:

I hope so. I think people will be quite excited.

00:54:04 Chikodi:

Fantastic.

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