On this episode of Growth, Matt sits down with Dan Laufer, the Director of Growth & Partnerships at Nextdoor – and he’s also the person behind what Matt calls the best, most contextual acquisition campaign he has ever seen. We asked Dan to share some background on the campaign – where the idea came from, how they got it up and running, and how the team has optimized it over the last seven years. Want to know what Dan says how to figure out the right offer (and the right channel) for an acquisition campaign? Listen to the full episode.
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Matt Bilotti: Hello and welcome to another episode of Growth, formerly #Growth, now just Growth. We dropped the hashtag. Today, I am super excited to talk about one of the best, if not the best, most contextual acquisition campaigns I have ever seen, and I got it in the mail maybe about a year ago, and I saw it and I just said, “This thing is so cool.” Then, once I rolled out the podcast, I said, “I have to figure out who helps run this thing, and get them on.” I am super excited to have Dan Laufer today. Dan, thanks for joining us.
Dan Laufer: Thanks for having me.
Matt: Absolutely. Dan is the director of Growth and partnerships at Nextdoor. That is my brief intro. Dan, do you want to say another couple words about yourself?
Dan: Sure. Yeah, so as you mentioned lead Growth, and partnerships at Nextdoor which is the neighborhood app for people who aren’t familiar, and kind of what that role means because I think that title can be a little ambiguous. It’s fundamentally responsible for growing active member engagement on our platform.
Matt: That’s great. Very concise, too. I love that. Why don’t we jump right in. All right, so I just want to give the audience a little bit of context. Maybe they have gotten this thing, too, in the mail. Maybe they haven’t, but for those of you that haven’t basically, and I got it a year ago but I took a video of it and I shared it with my team, and I found the video last week of me explaining this thing and opening up the letter. It was a letter in an envelope that was pretty plain and it said, “To our back bay neighbor,” and I opened it up, and it had this whole thing. It said, “There’s already 285 posts. I’m on this platform called Nextdoor,” and it said, “From Bob Myrtle on Jackson street.” There was a line in there that said there’s posts in there about crime and safety, and I just thought it was so well done. It came from my neighbor, and it was so perfectly attuned to the type of industry that you’re in. Dan, when did this campaign start and how long has it been going on for?
Dan: Sure. Actually, I’ve never heard of anyone doing an unboxing video of our campaign, so that’s pretty awesome. Hopefully you can start a trend with that. We’ve had the ability to let our members mail invites and letters to other neighbors for probably seven years. For almost as long as the company’s been around.
Matt: It’s not actually the member sending the mail, right? They’re pressing this button. Tell me how someone gets in a spot where they’re sending that mail to me.
Dan: That’s right. As a member, I can go in and say I want to invite other people to my neighborhood, and I can click on homes in my neighborhood, I can just say send to the 10 nearest homes near me, and then we take it from there and facilitate it on their behalf. We are the ones physically mailing it, but the name, and the permission, and the intent is coming from a member.
Matt: Which I think is what makes it so special is that it’s actually coming from another person that I have, even if I don’t know them, I have some connection to because I know they live near me.
Dan: That’s right. That’s really the promise of your experience of Nextdoor is that you’re connecting with people who live near you, and so there’s a consistency between the marketing and the promise that we’re trying to fulfill on.
Matt: That is really amazing to me that you’re able to align it so much. Generally, these kinds of mailers or campaigns in general are there to just get your interest enough to get you to show up, but it is so perfectly aligned with what the platform actually does that it just seems so perfect. How did the idea for this thing start in the first place? I know it was many, many years ago, and you’ve been there for a few years now, but yeah.
Dan: Yeah, so it does predate me, but I think at it’s core Nextdoor’s a social network, and on every social network you get more benefit by having more people on it. With most social networks, it’s pretty straight forward. On Facebook, I know how to add friends. Even in the early days you would email invite your friends, right? And LinkedIn, same concept. Nextdoor is unique in that you don’t know the other people in the network, and that’s what makes it really valuable is that you don’t know most of your neighbors, and so that makes it hard to text or email invite them to join you. You want to create the ability for people to invite, and you do know the addresses of the people around you, or you do know to say, “Hey, invite the 10 homes nearest me.” That is a way that people feel comfortable inviting their neighbors and growing their social network.
Matt: Maybe you don’t want to share this because it is a statistic type question, but is it most people that are on the platform wind up doing this? Is it a few of them? Am I a random one-off that someone actually happened to fall in this thing and clicked on the thing to mail it, or is it something that most of the users actually do … Sorry, I’m going to double barrel this question. Then, do they do it once they have been using the platform awhile, or is it also tied into the getting set up phase?
Dan: Yeah, so I guess I won’t share specific numbers, but I will say that the core motivation exists just as I mentioned on all platforms. So, I think there is a core motivation of I can make this more valuable by getting more people to join me, and that’s true across all social networks. We see that and that manifests, and yeah, a lot of people want to take action in this way. It’s a very easy thing for them to do.
Matt: Yep. Do you prompt them at a certain point of usage, or is it one of the things that’s always there that they can go find? I think about Dropbox, right? I get prompted when I’m running out of space, or I could just always go find the option somewhere.
Dan: Right. There isn’t a, like Dropbox, there isn’t a trigger necessarily. We do encourage what we call our founding member. The very first person to join a neighborhood, there’s a lot inherent motivation for them and a lot of notifications to encourage them. Beyond that, we make it easy to discover, and there will be some periodic triggers. We just do more just time-based than it is situational based like the Dropbox example. There’s just kind of a sufficient take up that we haven’t had the need to contextualize it deeper.
Matt: Got it. Okay, so let’s talk about the campaign itself. Been running for seven years. I would imagine that it’s not been the exact same thing. The version of mail that I got was not the version of mail that was sent seven years ago. Can you talk a little bit about what kinds of things worked, and what things didn’t work that you’re willing to share.
Dan: Yeah. We have learned a ton. I’ve been here about three years, and just reflect on the amount of testing we’ve done during that time. I think, again, it comes back to that initial point of how you connect the promise of that marketing to the reality. The promise is a neighbor is inviting you to join their private neighborhood network.
If you make it really sticky, I think you lose that promise. The message all of a sudden has a disconnect. If you put, “As seen on today show Good Morning America,” and all these other logos, I think in most forms of marketing are actually really powerful and conveys trust. All of a sudden, it’s like, “Well, it doesn’t feel like the neighbor invited me anymore. It feels like a company’s inviting me.” I think that’s a pretty important distinction. To make sure that the message, and the medium, and the promise all align in a way that makes sense.
Matt: Got it. When I think about the way that you would approach this and optimizing this over time, is it get everyone in a room and come up with ideas? Are people giving you feedback on this? Actual users giving you any feedback on this campaign? How do you think about what thing are we going to try next, or is there just a long list of all the possible permutations of things that can be changed like the outer envelop, and …
Dan: Right. I think probably like any text, I think mail is interesting in that there’s a very long, slow feedback loop so that’s a challenge. Unlike digital where I could learn in a day, it takes several weeks to get insight and so that’s a challenge. But we do think about it very systematically of … I’d like to focus on what’s the open rate. You don’t actually have that number, but if I only make a change on the envelope, and that’s the only change I make, I know the relative impact on the open rate, and then I start to get a signal of how impactful is different parts of the envelope, and that then allows us to focus on subsequent changes we might make. If you put a handwritten note on the envelope, and conversion, whatever, goes down 50%, you’re like okay. Well, that’s actually useful information. I know I can focus. Maybe I can do something else that is positive.
So, really just trying to find where do we get big movement, and obviously improvements are better than detractions, but both of them are helpful. A lot of times we’ll make changes that feel pretty dramatic and nothing happens, and you’re like okay, well this is part of the mailer that we should just kind of ignore because people clearly gloss over it.
Matt: Right. Interesting. Are you generally running … I think about a software campaign or an email campaign, it’s really easy to just make a change and get results pretty quickly, but as you pointed out it’s mail and it takes awhile to get a feedback loop on it. Are you generally trying a few different variables at once maybe in different geographies, or are you making one change to the campaign, and you’re going to run that change for two weeks and see what the results are across all the mailers, or do you split it?
Dan: Yeah, so we don’t make changes by geography because there is actually a pretty big difference in performance by geography. I think that speaks to a gazillion different underlying factors. But a lot of times we’ll have a split test, a three, four-way split test on a single drop. Some of it’s just done to statistics of what volume can you do and get significant results. But it’s not that hard to do it where if four houses on the same street, all four of them might get a slightly different creative that we can then measure the impact.
Matt: Got it. As I think about this because it seems super powerful, how does this compare to other campaigns? Like I would think about for us, we have a viral aspect of the product, and then we have paid ads and all that. There’s a pretty clear comparison of viral is driving this many more. How does this compare to other channels for you guys?
Dan: Right. Well, I think organic and viral are it’s own thing. They’re a little bit of apples and oranges. I think for us, it’s always the preferred path both because it’s cost effective, and I think it’s always the best way to be introduced to a product. I think this mailer feels to someone receiving it almost on par as a personal invite, so that I think is very powerful. Yeah, we’ve tried other channels, and I think some of them are similarly efficient as mailers, but I think I really like the connection of the brand promise that you feel like a neighbor came and invited you. In that sense, I have an affinity and a preference to that channel above some of the others.
Matt: Makes sense. Are there other companies that are doing similar types of campaigns that you could think of that align the promise so perfectly well? I’m just trying to think of some right now to give listeners some other examples to tie on. I’m having a little bit of a hard time. I don’t know if there’s-
Dan: Right. Well, probably one of the best is Facebook when they added tagging to photos. That was a great viral hook for you to join because if you hadn’t joined yet, and I tag JoeSmith@gmail, there’s a photo of you, you’re pretty motivated to come through and see what the photo is. I think that does tie to the promise because you’re connecting those friendships and seeing photos is a really core use case. That tagging I think was a huge unlock, and I think that is a really good connection. It’s not a paid channel, but it is a growth channel for them.
Matt: Do you think that there is an opportunity to have a few things like that, or do you think it’s more that each company can have one of these types of campaigns that just fits so perfectly with the brand promise, or is it repeatable within the same business model in other channels? How do you think about that?
Dan: In theory, it is repeatable. I don’t think there’s anything sacred about one. I think some channels lend themselves better than others. I think within Nextdoor, if somebody email invites you, maybe a neighbor that you’re an acquaintance with, I have a few neighbors like that, it wouldn’t be weird if they were to email me an invite to Nextdoor. That’s also incredibly powerful. I don’t think there’s something sacred about mail, but having that sense of personal connection is really special. I think there’s a lot of different ways to deliver it, but there are not an infinite number of ways to deliver it for Nextdoor.
Matt: Right. That makes sense. As listeners might be thinking about building a similar type of campaign, that mailer made our team think about what can we do to deliver such a good experience to get people aligned with what we have to offer. How should people think about, one, crafting their own ideas around that sort of campaign, and then two, executing on it, and then I’ll have another three at the very end.
Dan: Yeah. I think it may be a bit of a broken record but aligning the promise of marketing to the experience of the product I think is such a core piece of that. I wouldn’t say, “Oh, direct mail worked for Nextdoor, ergo it’s a great channel and everyone should do that channel,” because if the messaging isn’t going to align as tightly, then it may not be the case. That said, I think people tend to just lock into the two or three channels that most marketers rely on to get scale. There is a wide world out there of things that are unsexy and can be incredibly effective. Thinking creatively of how do I communicate, how do I get to somebody I think starts to unlock some of these other channels for you.
Matt: Here’s my number three, for people that might be trying something, they listen to this episode, they go to their team, they say, “We got to do something like this,” and they come up with a couple ideas. Should people expect to try three of these sorts of things and have them work? Should they spend a month trying out a big campaign? Should they start super small? How should people begin?
Dan: Yeah. It’s a great question because I think it’s really hard to get it right the first time, and that was our experience. There’s been a ton of iteration and improvement over the last three years that I know and can speak to. I think there’s places to find efficiency. The first thing I would try to find is can I get this to convert, and then I can optimize on cost.
There’s a lot of different ways to optimize that are going to lower your CPA over time, and I think a lot of people will kind of do one test and be like, “If CPA doesn’t back out, I’m going to move on.” There’s an initial … Whenever we do a campaign, there’s kind of this initial gut that we have, and I know that’s not a right way to go longterm, but I think out of the gate, the gut is does this feel like I’m connecting? I’m telling you something in a way that is going to cut through the noise, and if you come through, it all makes sense. You’re like I was promised to [inaudible 00:16:35] with my neighbors, and sure enough I go and I immediately get that fulfilled.
As a contrast, we’ve had folks come to me internally, be like, “Hey, I see other social networks do stuff with celebrities. Should we do stuff with celebrities?” My gut is always I’d love to because it’s fun, but it’s not the product we’re offering. There’s this disconnect. I could iterate on that for a thousand years. I don’t know that it would make it work. That’s kind of the starting point of do you have conviction that this makes sense? If so, I think you have to power through a little bit that iteration to get to a point of do I have line of sight that if I can optimize this, could I improve it meaningfully and make it back out on the CPA? But it many times won’t back out on the CPA on their first go. If you abandon it, I think you’ve missed your opportunity.
Matt: That is a great way to tie it all together. Examples from other companies and their campaigns are amazing, but it doesn’t mean that it will work for your business also. You have to think about it, as you were saying, specifically tied to is this attached to the value that my thing is going to offer? We tried physical mailers, they didn’t work for us. That’s just because our product is not in any way related to that sort of system. It was really hard to deliver. How do you explain the value of a chatbot over a letter? It just doesn’t make sense.
Dan: That’s right.
Matt: Cool. Well, Dan, thank you so much for joining. One of the other things that we didn’t get a chance to touch on here is that, as I mentioned, Dan’s title is Director of Growth and Partnerships, and partnerships is another major thing that they have over at Nextdoor, and a really important part of their model of getting new user acquisition. What we’re going to do is on Drift Insider, Drift.com/Insider, we’re going to have another episode that digs deep into that. Definitely come check it out. Dan, any parting words? Thanks so much for coming.
Dan: No, thanks for having me. Appreciate it.
Matt: Yeah. No problem. All right, thank you everybody. Now, as I had mentioned at the very, very opening of this, Growth it’s rebranded, no more hashtag, and it’s in it’s own feed. So, please five-stars if you are a fan. If you weren’t, let me know and we will figure out how to improve that. If you have other feedback around people you’d like to hear, topics you want to hear, feel free to let me know. My email is Matt@Drift.com. Thank you so much. Thank you, Dan, and we’ll catch you on the Drift.com/Insider episode two. Great, thanks.
Dan: Thank you.