In June 2007, David Houston founded Dropbox because he repeatedly forgot his flash drive while he was a student at the Massachusetts Institute of Technology. He started by building something for his personal use until he realized that he could also use it for the benefit of others. He soon sought and secured funding from Y Combinator. In September 2008, at the TechCrunch50, an annual technology conference, Dropbox officially launched.
Today, the user base stands at over 200 million. According to the Application Usage and Threat Report of the Palo Alto Networks Research Center, Dropbox was responsible for 0.29% of all worldwide internet traffic as of February 2013. In the space of 7 years, Dropbox has garnered so much popularity and a wide user base. It's market share is up to 14%. Furthermore, Dropbox has achieved these stunning numbers without spending money on Advertising. The immediate question then is: How did they do it? and then; How can I apply this same strategy to my business? Well…let me show you.
How Dropbox Grew So Fast
As of August 2013, Dropbox had over 100 million users. Same time today, that amount has doubled and their website design remains so simple.
According to an article by Andrew Angus, Dropbox grew quickly because of a simple design and one ‘explainer’ video. Although they started out with Google AdWords, they quickly realized that it wasn't paying them. They were spending $233 to $388 to acquire a customer for a product of $99. Financially, that didn't make any sense. Therefore, they decided to switch to a referral campaign in order to attract more customers. This plan worked. According to Angus:
Dropbox users were encouraged to share the service via social media and e-mail. If they did, they’d get extra space for free on their own account for every new person who signed up from one of their invites.
The result was that satisfied customers became brand evangelists who helped to get the word out about Dropbox. Due to the fact that they’d get something in return, i.e. free space, users liberally shared about Dropbox via Facebook, Twitter, e-mail, and more. For every customer who was satisfied about the product, there were hundreds and even thousands of other people who were only just finding out about it and signing up. This resulted in a total of 2.8 million invitations being sent out over a 30-day period.
Another thing Dropbox did right was using a simple homepage design and an ‘explainer’ video. As seen in the picture of their homepage above, there isn't anything to distract the visitor from what Dropbox was trying to achieve with their design. It was straight to the point. Open the website, watch the 120-second video, and download the application. There wasn't much else to the website because there wasn't much else to be done. The video increased the sign-up rate by 10%. Research has shown that product videos increase the likelihood of purchase by 85% as well as increase the customers' confidence in a product by 52%.
Angus explains why videos are so effective. He says that our brains are hardwired to respond to videos and that people retain 58% more information from videos than from plain text. If an explainer video that cost $50,000 could bring in $48 million in extra revenues, then it definitely was worth it for Dropbox.
How to Adopt Dropbox's Campaign Strategy for Your Business
1. Rethink/Improve Your Current Strategy
The first thing you need to do is to look at your current marketing strategy and analyse its costs and benefits. Until Dropbox realized the loss they were facing in the short and long terms by using AdWords, they wouldn't have come up with a better strategy. Your current strategy may not be bad, but it may not be the best either. Truth is, there is always a better way to do things. Following in Dropbox's footsteps would mean that you won't even have to spend on advertising. However, you must realize that you still have to spend, albeit, in a more productive way. So, sit down with your team and look at your strategy from as many different perspectives as possible. Look for ways to either improve your current strategy, or find a better but more cost effective one.
2. Use an Explainer Video
This strategy works best for those who are offering products rather than services. In as short a time as possible, with as much comprehensiveness as possible, explain to your website visitors and how your product works. If a picture is worth a thousand words, Forrester Research says that a one-minute video is worth 1.8 million words.
At the end of your video, you must include a call-to-action (CTA). This is determined by the purpose that your video serves. Are you asking people to download your app? Are you asking them to subscribe to your product? Or are you asking them to register for a service?
Whatever you aim to achieve with your campaign, make sure your video expressly shows that. If it doesn't, then you might have succeeded in wasting the visitor's precious time, his/her internet data and your own resources.
3. Embrace Simplicity
As has been stated already, one highlight of Dropbox's campaign strategy was the simplicity of the approach. The goal was clear: reach out to more people and gain more users. The method was
equally clear: use the referral campaign to draw people to the website, use the explainer video to help them understand the product and get them to download and start using it. There is no way anyone can get confused here with what they needed to do.
This is how it should be for you too. Make your goal/target as clear and simple as possible and come up with an equally simple approach to hitting your target. This way, you will be able to easily explain it to anyone who asks and you will be able to remember everything you need to remember without stress. Simplicity, they say, is the ultimate sophistication.
4. Focus Your Campaign on What Matters Most
As highlighted in the preceding point, set a clear goal/target for your campaign. However, you must be mindful of what you are focusing on. A good campaign goal and plan without the proper focus will only end in futility. Imagine if, with all the referrals and simplicity of the website, Dropbox had focused their campaign on proving how good their product is, instead of focusing on getting customers to download and sign-up, where would they be today? No one really knows. However, they had the right focus and in the end, they are having the right results.
5. Adequately Reward Your Referring Customers
When you ask customers to refer your business to their friends and family, you better have a good way of rewarding them. Taking a cue from Dropbox, you have to find a scheme to reward the customers who have referred people to you. For Dropbox, they offered more free space. For you, it could be discounts, special offers, prizes, special services, etc. Look for ways to ensure that the ones who bring in more customers for you are appreciated and adequately rewarded for their hard work.