Engagement beats scale: Inside Morning Brew’s approach to subscriber growth

Our newsletter has 2.5 million subscribers, but that’s not the number we actually care about.

In August, we hit a major milestone at Morning Brew: 1 million opens. A single edition of the Morning Brew newsletter was opened by over 1 million people.

For those who haven’t heard of Morning Brew, we’re a business media startup founded in 2015. Our marquee product is a daily newsletter that delivers the most important news shaping the business world.

While reaching subscriber count milestones is exciting, our primary focus internally is not on that metric.

Our goal from the onset was to build, grow, and retain a hyper-engaged audience. To keep ourselves pushing toward that north star, we measure ourselves not on our list size, but on subscribers that are actually engaging with our content–most cleanly measured by unique opens.

In this post, I’ll get into how this mindset of engagement over scale is actually put into practice in three main areas — the logistics of maintaining an email list, our referral program flywheel, and how we evaluate and optimize our growth channels. I’ll end with some of our more impactful insights and what I wish I knew earlier.

Before diving in: a growth strategy is nothing without its product and for Morning Brew, the strength of our product comes from our writers. Their ability to consistently create an informative and entertaining newsletter keeps readers coming back every day, builds brand obsession, and drives word-of-mouth growth. More than anything I’ll talk about in this post, the growth of our audience is because of our content team’s talent and creativity.

The Logistics

While I have your attention, I’ll start with the most boring but arguably the most important — the foundational layers of building a successful newsletter audience.

Onboarding

The first element here is an effective welcome email, the initial touchpoint with a subscriber in their actual inbox. This is ours:

The primary goal is ensuring our emails get delivered to the right place — they can’t open our emails if they don’t see them in their inbox. Since this is so important, our welcome email is super straightforward, focused on this singular goal as opposed to overwhelming them with content or trying to get too cute.

Once onboard, we have to do everything we can to turn this new subscriber into an engaged reader. To start, we test our subject lines four ways every morning (more on our content team’s approach to subject lines in this thread from Brew writer, Toby Howell). Each of the four subject lines is sent to 3% segments of our audience at 5am. The winning subject line by measure of opens gets sent to the remaining 88% at 6am.

We’ve seen open rate test results vary by as much as 10% depending on the subject line, which today translates to ~220,000 additional readers opening the newsletter as a result of the test.

For some of our most loyal longtime readers, the Brew is so ingrained in their daily routine that the subject line may not be a huge factor in whether or not they open. They’re going to do so regardless. But, for the thousands of people who are receiving the Brew for the first time each day, the subject line is the biggest lever we have to stand out in the crowded inbox and hook them in with our content.

Our data has shown that getting an early subscriber over the hump from 0 opens → that first open is crucial. If a user doesn’t open at all in their first few weeks, it’s unlikely they ever will. By testing every morning, we’re not only maximizing opens on each edition of the Brew, but we’re increasing our odds of converting our new users into lifetime subscribers.

Cleanliness

Even with an A+ product, flawless deliverability, and an optimized onboarding process, there are always going to be subscribers who never engage or become disengaged. Some are out of our control, like users entering the wrong email address or subscribing with their work email and leaving their job. Others just lose interest.

Regardless, subscribers who aren’t engaging with our content aren’t doing anything for us except potentially harming our deliverability. Sending daily emails to users who are not engaging can damage your sender reputation, making it more difficult to reach the inbox. Our newsletters ending up in spam is quite literally the subject of my nightmares, so to prevent this we have a strict churning process in place.

A reader will enter our churn flow when they fall into either of these two buckets…

  1. A reader signed up 18 days ago and has not opened or clicked at all
  2. A reader has not opened or clicked in 90 days, regardless of their signup date

When either of these criteria is met, we send them an automated email asking if they’re still interested in receiving the Brew. Here, we remind them what the Brew is all about and give them access to recent content.

If they don’t re-engage within a few days, we remove them from our list and send them a notification email that we have done so, with one last opportunity to opt back in.

Churning disengaged users process does lower our total size, but we are doing so to prioritize our ability to reach the inboxes of our current and future engaged subscribers, and in effect, prioritizing opens over subscriber count.

Regardless of scale, ensuring the users you’re bringing in are both receiving your emails and engaging with your content early on lay the foundation for growing a healthy newsletter list.

Now onto some more fun stuff.

The Referral Program Flywheel

If you’re not familiar, Morning Brew has a robust referral program that has been core to our growth. It’s the flywheel that kicks all of our acquisition efforts into second gear, allowing us to efficiently grow our audience and strengthen our brand.

For a complete overview of the program: Check out our former product lead Tyler Denk’s behemoth of a Medium post. He outlines every element, the custom tech he built to bring it to life, and why it works so well.

For a less-complete overview: Our referral program incentivizes our readers to spread the word about the Brew. Each user has their own unique link to share with others . Anytime someone signs up with a reader’s unique link, they get the credit. As readers hit the referral milestones (outlined below), they earn rewards.

Thanks to the quality of the product, our readers are willing to take the step to share the newsletter with their network at an exceptionally high rate.

Morning Brew’s referral program rewards

What makes the referral program so instrumental in building an engaged subscriber base is the type of readers it brings in. Our data has consistently shown that subscribers who come in from the program are among our most engaged group of users. When a friend goes out of their way to recommend you check out a new product, you’re likely to give it an honest try.

Unsurprisingly, we’ve also seen that after a reader refers a friend, their engagement with the newsletter strengths and their lifetime with us is on average much longer than that of a reader who never refers.

Tyler did the hard part — actually building it back in 2017. We could get away with setting and forgetting it, but because the referral program is so effective at acquiring and retaining highly engaged subscribers, continuing to find optimizations and keep it fresh for our growing audience will always be a focal point for us. We’re constantly running tests and making updates on every element from the rewards themselves, to the automated emails, landing pages and giveaways.

High-Quality Sources > Everything

While the referral program is an incredible growth engine, we needed to start bringing in subscribers elsewhere to really kick the flywheel into second gear.

We were fortunate to have such a strong monetization strategy early on that even as a bootstrapped company, we were able to start spending on paid acquisition starting in 2018.

When allocating our budget and optimizing our spend, it all comes back to the north star: Quality > Quantity. Opens > List Size.

For our hundreds of active sources, we are monitoring not just the cost to acquire a new user (CAC) but the high-quality percentage of each.

We define a high-quality subscriber as one that opens six or more of their first 12 newsletters. Two weeks is obviously short in the broader picture of a user’s lifetime with us, but our data has shown that a subscriber’s actions in this timeframe are generally indicative of their longer-term behavior.

If the source is paid, we evaluate everything based on its high-quality acquisition cost (HQ CAC). So for example, if a source has an acquisition cost of $ 5 per subscriber and 50% of those subscribers are high-quality, the HQ CAC is $ 10.

This allows us to make relatively quick decisions on the quality of a source — whether to ramp up, make tweaks or shut down based on this metric. Most importantly, it keeps us honest by making sure we aren’t just scooping up cheap subscribers who aren’t actually engaging with our content.

The variation of HQ% across sources can be extreme. We’ve seen sources bring in anywhere from 10% to 90% high-quality subscribers. Even within specific platforms, the range of quality on one ad set for example can be 30%, while another ad set is in the high 70s.

Across the board, the more ruthless we got in cutting off low-quality sources to invest in higher quality (but often higher cost) sources, the stronger our opens became. Today, we typically don’t have any active sources running with less than a 40% high-quality rate, ensuring we are pushing toward our goal of driving unique opens.

While it’s not baked into the HQ metric, we also take into account a reader’s likeliness to refer based on the source they came from and optimize for that. For example, one of our top ad sets in Facebook Ads has been a lookalike audience built off of existing readers who have referred before. Readers who sign up from this ad set have been more likely (as much as 4x more likely) to refer a friend than any other paid channel.

With this focus on engagement in our approach to growth, we’ve been fortunate to maintain a 42% unique open rate as we’ve scaled from 500k to 2.5 million subscribers.

In the pursuit of building a highly engaged audience, finding and optimizing sources, and scaling quickly, we’ve learned a ton. Here are some of the more impactful insights:

Diversify before you think you have to

If you’re looking to scale, diversify your acquisition channels sooner than later. Facebook and Instagram ads are obviously powerful, especially when you’re aiming for such a low-cost direct response campaign. Like many young brands, we definitely leaned into them heavily early on — they were super effective and we had limited resources.

As CPMs on Facebook started to creep up, we made a push for new channels. Naturally, it took more time to find efficiencies on other channels (since nothing’s easier than Facebook), but it ultimately paid off.

We‘re now at a place where we have a strong, diverse pool of sources doing work for us. At our peak, we were spending over 75% of our budget on Facebook Ads. It now makes up less than 15% and no single channel takes up more than 35%. If any of our current sources were to disappear or stop performing, we’d be able to make up for it elsewhere.

In the process, we also discovered channels that didn’t just match Facebook but actually outperformed it from both a pure quality and HQ CAC perspective. They just took more time.

Email ❤

If you’re looking for an engaged newsletter subscriber, don’t go too far away from the platform: email. People who like newsletters…like newsletters. As the podcast world has also learned about podcast listeners — it’s much harder to convince someone to buy into the medium than it is to grab an audience of existing users of that medium. Other podcasts are a great place to grow your podcast, and other newsletters are a great way to grow your newsletter.

We’ve sponsored ($ ) and cross-promoted (bartered) with newsletters focused on topics ranging from travel to wellness to personal finance to sports. Because of the broader nature of our product, we’ve been able to bring in highly engaged (and either free/low-cost) subscribers across a spectrum of topics.

In addition to other newsletters, we’ve had varying success with programmatic ad campaigns within email. Email-based is the only type of programmatic that’s worked for us in any capacity.

In general, native ads in emails just work. (Email partnerships@morningbrew.com to sponsor the Brew if you don’t believe me 😉.)

Test and repeat

Allocate time and budget for tests — and accept that most will fail. To reach the scale we’re at, we had to be willing to put some resources into totally new channels with no guarantee of results. We had some big-time flops, but we also had some surprise successes that are still chugging today.

Finding the pockets of efficient, low-touch channels (even if their scale isn’t enormous) has allowed us to expand our responsibilities as a team and be flexible as budgets and platform performances have fluctuated during the pandemic.

Messaging 🤝 audience.

When we first started spending on paid acquisition, we worked toward some brand messaging and tested it thoroughly until we felt like we nailed it.

We scaled quickly, going from a couple dozen acquisition channels to hundreds in a matter of months, and used that same messaging everywhere. While it wasn’t horrible, there was a ton of untapped opportunity in optimizing the messaging for each channel, tailoring it to the platform and audience. For example, when advertising in other newsletters, language that’s focused on the email aspect like “Add this to your inbox” ended up performing well. While on social, longer-form reader testimonials typically perform best.

Figuring out how to tweak our messaging to align with each platform helped us ramp up across channels while still maintaining our consistent value prop.

Cost might change, but quality likely won’t.

Like I mentioned, we’ve tested into tons of channels. It can be tempting when you see a super low CAC (👍) but also a super low quality (👎) to want to give it time, continue testing and see if you can bring that user quality up. That low CAC is so appealing and you think of the scale you can achieve with it — just need a way to find the pocket of users who are actually going to engage with the product.

In my experience, it’s very unlikely that a channel can make drastic improvements in the quality department. They either have the kind of users that will engage with your product or they don’t.

On the other hand, when we start off with channels that have a high CAC (👎) but awesome quality (👍), it has definitely been worth our time and resources to figure out how to bring that CAC down. When you find a channel of any kind that’s proven it has users that are engaging and are right for your product, there’s likely an opportunity. Through continuous testing, it’s possible to get the CAC down into your range and turn into a viable long-term channel bringing in the users you want.

Ebbs and flows

When you’re trying to scale quickly, a week of “bad” growth can feel like a bad year. It can be frustrating. It can steer you off course, searching for some magical undiscovered acquisition channel that doesn’t exist. That lack of focus can end up hurting long-term growth much more than the bad growth week itself.

There are going to be bad weeks and there are going to be good weeks. Stay focused on what matters and the results will come.


Engagement beats scale: Inside Morning Brew’s approach to subscriber growth was originally published in Entrepreneur's Handbook on Medium, where people are continuing the conversation by highlighting and responding to this story.

Entrepreneur's Handbook – Medium

8 Morning Habits of High Performers

“Some people dream of success, while other people get up every morning and make it happen.” — Wayne Huizenga

I really appreciate that quote. I truly believe your morning habits set the stage for the remainder of the day. For example, if you keep hitting snooze until you realize that you’re running late, how do you think the rest of your day will be? You all “get it.” You all “know.” But, do you DO the actions that support the habits you know to be correct?

You may forget an important document at home. Since you didn’t have time to eat breakfast, you grab a doughnut. And, it totally slipped your mind that you have an important meeting today — which you totally didn’t prepare for.

If that’s your version of “Groundhog Day,” then how successful and productive do you think you’ll be? That’s why top performers get the most out of their mornings. And, they do so by embracing the following 8 habits.

1. Wake from a good night’s sleep.

According to a global sleep survey conducted by Royal Phillips, 44% of respondents reported that their sleep has worsened over the last five years. What’s more, nearly 1 in 3 Americans sleep fewer than six hours per night.

Why’s that a problem? Well, it’s recommended that we get between 7 and 9 hours of sleep each night. If not, that can lead to a myriad of problems including diabetes, obesity, heart disease, stroke, cognitive decline. As a consequence, this can lead to death.

While not trying to make light of this, it’s obviously impossible to be a high performer when you’re in poor health physically and mentally. That’s why the most successful people prioritize sleep. But, if you’re having trouble, the CDC suggests embracing the following habits:

  • Be consistent. That means going to bed and waking up at the same time — even on weekends.
  • Keep your bedroom dark, cool, and quiet — kind of like a cave.
  • Ban electronics, like TVs and smartphones, from your bedroom.
  • Avoid large meals, caffeine, and alcohol before bedtime.
  • Engage in physical activity during the day.

I’d also add implementing a relaxing evening routine. Some ideas would be meditating, reading, journaling, taking a bath, or reviewing tomorrow’s schedule. These are all simple and effective activities that clear your mind and help you chill out.

2. Find some quietude.

“Silence is one of the best ways to immediately reduce stress while increasing your self-awareness,” Hal Elrod wrote in the Morning Miracle. “And gaining the clarity that will allow you to maintain your focus on your goals, priorities, and what’s important for your life, each and every day.”

I know what you’re thinking. How can I possibly achieve such a feat? Well, Leo Babuta recommends waking-up before everyone else in your home. But, if you’re not a morning person, you can find silence later at night when everyone else is asleep.

How should you spend your quiet time? You could take a walk, read, write, visualize, or meditate. Personally, I’m also a fan of not using my phone as an alarm clock. Instead, I use an old school alarm clock so that I don’t get sucked into the rabbit hole of emails, social media, or whatever nonsense that’s out there.

3. Smile and think of something positive.

Is this the first thing that’s on your mind as you groggily open your eyes early in the morning? Probably not. But, it’s been found that smiling releases those feel-good neurotransmitters known as dopamine and endorphins. For the uninitiated, this will lift your mood and kick your day off on the right side of the bed.

Furthermore, cracking a smile releases serotonin which will relax your body and lower your heart rate and blood pressure. And, it can also fortify your immune system.

Additionally, think of something positive. It could be reflecting on what you’re grateful for or something that you’re excited about, such as an upcoming vacation. You could also recite uplifting quotes like this gem from the Dalai Lama; “Every day, think as you wake up: today I am fortunate to be alive, I have a precious human life, I am not going to waste it.”

4. Make your bed.

“If you make your bed every morning you will have accomplished the first task of the day,” said Naval Adm. William McRaven, ninth commander of U.S. Special Operations Command, in his commencement address at the University of Texas at Austin. “It will give you a small sense of pride and it will encourage you to do another task and another and another.”

“By the end of the day, that one task completed will have turned into many tasks completed,” he added. “Making your bed will also reinforce the fact that little things in life matter.”

“If you can’t do the little things right, you will never do the big things right,” said McRaven.

“And, if by chance you have a miserable day, you will come home to a bed that is made—that you made—and a made bed gives you encouragement that tomorrow will be better.”

5. Find your own rhythm.

After you make your bed you may be asking,” What’s next?” Here’s the problem with that. Making these micro-decisions every morning could put you into a collision course with decision fatigue.

If you weren’t aware, that’s a big no-no. After all, it can lead to procrastination, avoidance, indecision, and impulsivity.

To avoid this, create your ideal morning routine. For some, that could be slamming a glass of water, going for a jog, eating breakfast, and taking a shower. Others may prefer to brush their teeth, stretch, and do something creative.

Another way to make fewer decisions? Plan the night before. For me, that means picking out my meals and outfit, as well as prioritizing my to-do-list.

6. Craft results-oriented affirmations.

I’ll be direct here. Affirmations are the bomb! Besides combating self-deprecating thoughts, they can boost your motivation. Also, studies show that they can reduce stress, increase creativity, and improve your problem-solving skills.

However, Elrod suggests that you affirm your commitments — opposed to who you are or who you want to be. And, you can accomplish this by answering four simple questions:

  • What are you committed to?
  • Why is this important to you?
  • What activities will help you succeed?
  • When will commit to doing these activities?

If that’s not your cup of tea, then at least set your intention for the day. It’s a simple way to keep you focused on what truly matters.

7. Do an “hour of power.”

“Motivation doesn’t last forever, so you need to replenish yours regularly,” writes Lianne Martha Maiquez Laroya for Lifehacker. And, here’s a little secret I have for you, high performers are well aware of this. As such, “they dedicate ample time to increase their supply.”

Moreover, when you’re emotionally invested in something, you’re more motivated to see it through. In order to accomplish this, block out a power hour. While you can spend this time however you please, I’d stick with things that get you pumped. Examples include listening to a playlist or inspirational anecdotes, watching TED Talks, or reading empowering quotes.

8. Don’t isolate yourself.

Prolonged isolation is connected to cognitive decline. Even if you have a family and collaborate with others, it’s still important to put these relationships first. When you do, you’ll be healthier and happier — at least according to a famous 79-year Harvard study.

Best of all? You can easily achieve this by doing things like eating breakfast with your family. And, when you get to work, greet your co-workers as they enter or a daily stand-up meeting.

8 Morning Habits of High Performers was originally published on Calendar by .

The post 8 Morning Habits of High Performers appeared first on KillerStartups.

KillerStartups

3 Ways Thriving Entrepreneurs Structure Their Morning Routines

Ever wonder what Bill Gates eats for breakfast? Or what Oprah’s favorite meditation is?

Developing a unique routine that works for you is much more important than copying someone else’s habits to a tee. Different things work for different people. The faster we can accept that our individual preferences and needs have value, we can let go of constructing the “perfect” morning and do what actually works for us.

With that said, there seem to be some common threads in what makes a morning routine work. Specifically, they are: having a regular sleep cycle, getting some form of exercise in, and finding a way to declutter your mind.


StartupNation exclusive discounts and savings on Dell products and accessories: Learn more here

Lasso your sleep cycle

Is your sleep schedule totally wild and out of control? Do you wake up exhausted and always feel like you’re running behind? Time for an intervention!

Being able to wake up at about the same time every morning is paramount for a steady morning routine. Staying up too late or having a sleep cycle that doesn’t mesh with an early morning routine is a surefire ticket to failure.

How can you take back control of your evenings? Aside from the usual suggestions like turning off all screens by 9 p.m. (yes, do that too), consider what activities can be cut from your day. This is especially useful if your schedule is packed. Are all of these things worth the time you spend on them? Can anything be cut down or reduced so that only the most urgent tasks are handled each day?

(If you need some extra motivation, check out some of these statistics that separate early birds from night owls. Hint: Early risers tend to make out better in several areas of life).


Related: Q&A with Christine Hansen on How to Sleep Like a Boss

Pick a movement

In the 2013 book, “What the Most Successful People Do Before Breakfast,” by Laura Vanderkam, exercise is revealed as the second most common occurrence in CEO morning routines (behind waking up early).

Even those who detest exercise can challenge themselves to find one thing that works for them, like stretching, running, doing some yoga, hitting the gym or talking a walk. Different exercises work for different personalities, so don’t force yourself to do what you hate. As long as you pick a movement and stick with it, you’re good to go. (If the thought of early-morning movement makes you cringe, download the 7-Minute Workout app and just plow through it!)

Centering the mind

Another common theme in entrepreneurial morning routines is mental organization, or some form of decluttering or expanding the mind. The method through which this is achieved seemed to vary pretty vastly. For example, some entrepreneurs cited meditation, while others read from carefully selected books. Others laid out their to-do lists, wrote in journals or worked on specific projects.

Letting your mental activity settle in just one or two areas of focus is a good way to find silence and productivity, especially in the early hours when the world is still asleep.


Sign Up: Receive the StartupNation newsletter!

Tips and tools to stay on track with your morning routine

What are some other things you can do to ensure your morning routine stays focused, regular and relaxed?

Many professionals swear by avoiding their email inbox until later in the day. This gives you a chance to get your head on straight before any confusing or stressful situations are introduced. Another common citing was the popular app, Headspace, which offers 10-minute meditations that anyone can do. If you’re looking to adopt some sort of writing practice, the 5 Minute Journal might be a good place to start. What about the busy entrepreneur who simply has no time for such luxuries as a morning routine? Try the 24-minute morning routine to get all of your significant tasks completed in under a half hour. Simple as that!

What’s your morning routine secret to success? Let us know in the comments, below.

The post 3 Ways Thriving Entrepreneurs Structure Their Morning Routines appeared first on StartupNation.

StartupNation

Tesla shares drop sharply in broader tech selloff, falling 17% in morning trading

Last Thursday and Friday’s public market selloff has stretched into this week, with the tech-heavy Nasdaq Composite off 2.5% this morning. But while tech shares are down broadly to start the holiday-shortened week — and are taking stick for bringing down even broader indices — some well-known technology, and technology-ish companies are suffering even more.

Tesla is one such company, with its equities shedding around 17% of its value in early trading today.

The American electric vehicle and battery company recent split its shares 5-1 after seeing their value shoot past the $ 2,000 a share mark. In the ‘stocks only go up’ era, Tesla has proved a favorite with bulls. Even calling Tesla a car company — factcheck: 85% of Tesla’s revenue in its most recent car came from its automotive efforts — is enough to invite scorn and abuse on social media as acolytes of the company will heckle you for not viewing the company through the same lens tint that they prefer.

Tesla shares gained value during their split process, an oddity given that the news should have been priced-in before the transaction took place.

Regardless, it’s another tough day for Tesla and the declines are starting to add up. According to Yahoo Finance, Tesla’s post-split 52 week high is $ 502.49. The company is currently worth $ 345.75 per share, meaning that Tesla’s value has fallen more than 30% from recent highs.

Update: I missed that the Tesla share sale completed as of this morning, with the car company selling some $ 5 billion in equity. Given that the sale was completed friday, per CNN, what impact the news that it is over on the company’s should have is slightly opaque. All the same, the context fell critical so I wanted to add it.

But Tesla is not alone in seeing its worth revalued. The useful Bessemer cloud index of public SaaS companies is off around 1.8%, and is off around 15% from its own, recently all-time highs. The Nasdaq Composite is off a more modest 8.9% from its own recent highs.

Concern during this selloff of tech shares could dampen enthusiasm for the wave of tech, and venture-backed companies that are looking to go public while the waters for such debuts remain warm. And it is not hard to guess that if general enthusiasm for risk-oriented shares declines, exotic financial vehicles like SPACs could see their luster diminish.

Regardless, Tesla shares are off sharply today while Nikola is bouncing on news that GM took a 11% stake (worth $ 2B) in the startup.

Startups – TechCrunch