Hey — It’s Nico.

Welcome back to Behind Tactics 🧠, where I break down the most unique tactics that startups are applying to gain an edge in their markets.

Today, I’m diving into Beehiiv's wild ride of customer acquisition with their ingenious 'Trip Gifting Affiliate Program,' where the top affiliate receives the gift of an unforgettable trip.

Let's delve into the hive! 🐝

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The Strategy

What’s the Buzz?

Last year, Beehiiv’s affiliate program generated at least $500K in revenue.

This is an insane number for a program that is barely a year and a half old. Since then, the affiliate program has become one of their main customer acquisition channels.

So, how did they make the program so successful?

The short answer: they went crazy with it. 

While other startups were handing out pocket change in their affiliate programs, Beehiiv raised the stakes with extremely generous commissions. 

Here is a list detailing the affiliate programs of many other software companies. You will notice that the commissions are usually between 10% to 20%.

Beehiiv saw this and decided to go all in by paying its affiliates a whopping 50%. This means that out of the $500K that the program made in 2023, half of it went to their affiliates.

This, however, was not enough for Beehiiv. Although the commissions would have surely made waves on their own, the Beehiiv team had one other great idea to make their program unique. 

Enter “The Beach Club”.

The Beach Club

Nowadays, creating an affiliate program is easy. This is fantastic news for me because Failory gets revenue out of these programs, but it is not so great if you want to make your own program stand out.

“So what else can we do to get people talking about our affiliate program?” — asked a marketing intern at Beehiiv HQ (I wasn’t there, but I am pretty sure this is how it went).

“Bahamas” — answered a Senior Manager, leaning back in his chair with a distant gaze.

“What?” — replied the whole office, exchanging puzzled glances.

“Bahamas” — stated the manager as he walked out of the office, leaving the question hanging in the air.

And just like that, an idea was born. 

The plan was simple: every quarter, the partner with the highest number of referrals would get an all-paid trip to a beach destination for two. The first destination: The Bahamas.

Since then, they have sent partners to Maui in Q3 2023, San Lucas in Q4 2023 and they will be sending someone to Maui in Q1 2024.

Should I?

Why This Works

Having a unique reward is a clever way to incentivize partners to work further on promoting your tool.

• It gives partners a ‘talking point” to introduce your tool to other people. Some people might convince their friends and family to join your tool so they can win the prize. While this development may not be ideal for Grandma, who was just persuaded to launch her own newsletter (“Gram's Kitchen Tales”), it presents an excellent opportunity for Beehiiv.

• Everyone wants to win competitions. Particularly if you know the other players. That’s what happens with Beehiiv’s partners, as most of them form part of the same Slack communities and Twitter feeds. This gets partners to push to end in the 1st position and show it off to the rest.

• It encourages people to go one step further to promote your tool. Beehiiv’s Partners program page says: “You can also add unique offers using your partner link.” Essentially, this means that you are incentivized to create products or services oriented to get other people to sign up for Beehiiv. For example, there are a few services available that help you migrate from other email marketing tools to Beehiiv for a small fee, as long as you use their affiliate link.

How to Apply It

• Be generous with your partners. See the kind of commissions other software or services in your niche are giving, and make your commission bigger.

• Come up with one crazy thing you can offer to your partners to get them to talk about your affiliate program everywhere. It doesn’t necessarily have to be expensive. It has to be unique and, ideally, related to your industry and business. For example, Robinhood affiliates get access to exclusive events and to new features early.

• Gamify the program. Everyone likes to make good money. But there is a cheaper way to incentivize users: make a leaderboard. Show them how they compare with each other. Competition is usually a really strong motivator.

• Actively promote your program to your customers through social networks and in-app menus or pop-ups.

• Give all the necessary resources to your affiliates for them to succeed. Make a special website where they can find everything they need, and even offer help with copywriting or design for their promotions.

Yes, But

• This program is not cheap for Beehiiv. Just in 2023, they paid $250k in commissions. For many businesses, especially service ones, dishing out a 50% commission is unviable. Also, Beehiiv has to pay for the 4 trips a year, which can add another few thousand dollars to their expenses. Still, there are many ways you can make your program unique without breaking the bank. The key is to think of rewards that are not expensive but are original and different, like giving consulting calls or access to exclusive webinars or workshops.

• It takes a lot of time. Recruiting affiliates, setting up the resources for their success, working alongside them, and organizing these trips require significant time and effort. Beehiiv likely has a dedicated person taking care of this.

• It’s sometimes difficult to track the impact of an affiliate program. Partners will talk about your tool everywhere, often using their affiliate links. But in many cases, people might not click on their affiliate links right away and then come back to your product at a later time. This means that the real impact of your affiliate program might be greater than what you can see just by looking at the numbers in your attribution dashboard.

Keep Learning

Others Playing It

The CEO of Beehiiv was the brain behind Morning Brew’s famous referral program, which drove hundreds of thousands of subscribers to the newsletter.

MorningBrew’s program also had some crazy gifts, including a trip to the company’s HQs. He must have taken some inspiration from this program to design Beehiiv’s one.

A few other newsletters implemented similar things, like Stacked Marketer, which gifts a trip to Vienna:

And Trevor McKendrick, which puts a billboard with a picture and URL of your choice.

When it comes to physical product companies, Tesla has done some crazy things to promote its affiliate program.

Initially, they’d give free Tesla cars to those who referred 10+ customers. The first person who reached this received a Founder’s Edition Model X and $25k in stock options.

Youtuber Ben Sullins also formed part of the program — he won two free Founder’s Series Next Gen Roadsters for facilitating $12M in Tesla sales.

In 2019, Tesla gave away 80 new Roadsters to their partners. That’s when they realized their affiliate program was too expensive and replaced their rewards with things like launching a photo of the partner into deep space orbit and providing the partner a VIP invitation to a Tesla event.

Go Deeper

• How to design a referral program: A guide from Andrew Chen, who ran Uber’s referral program, spending $300M+/year on it.

• How Morning Brew’s referral program works: Written by Beehiiv’s CEO, describing MB’s trip-gifting referral program.

• How to launch a customer referral program in 6 steps: A guide from Demand Curve with lots of examples and good practices.

• Your guide to B2B referrals: How to use this strategy as a B2B growth engine, by Cello’s co-founder Stefan Bader.

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That’s all for this edition.

Cheers,

Nico