By Andrew Angus on January 10, 2013

In a short five years, Dropbox has gone from 0 to 100 million users.

That’s impressive.

What’s even more impressive, is the fact that they’ve done it with one of the most simple website designs ever. Since the first year, their homepage has featured only two main components—an explainer video and a download button. Here’s what it looks like (just in case you’re not one of the 100 million people who has already signed up for the service):

They’ve also grown without spending money on advertising, and they’ve grown exponentially compared to the competition, despite the fact that there are dozens of similar services competing in the same space.

So what’s Dropbox’s secret? How did they grow so quickly with such a simple design, one explainer video, and spending no money on advertising?

Dropbox’s viral referral campaign

Dropbox started out by using Google AdWords as a way to reach customers. But they quickly figured out that they were spending $233 to $388 per customer acquired. That ended up being too expensive for what was a $99 product at the time.

Thus, they decided to switch to a viral referral campaign to attract more customers. This ended up being one of the keys to their success. Here’s how it worked: 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 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.

What an awesome viral campaign. It’s one of the greatest of all time, and Dropbox fully leveraged the power of referrals and social sharing.

But that’s not all that they did.

 

How a simple design and an explainer video helped Dropbox grow even more

Dropbox’s simple homepage design focuses visitors’ attention 100% on their explainer video. There aren’t any other links or any other messages that get in the way. When you land on the homepage, there’s only one thing to do—watch the video.

By focusing every visitors’ attention on the explainer video, Dropbox was able to get more people to watch and learn how the service worked. This in turn led to more sign ups because more people now understood how to use Dropbox. It’s a lot easier to click a download button when you know how something works and understand the benefit, and that’s what Dropbox was banking on with their 120-second explainer video.

The result was a 10% increase in sign-ups. That’s right—the explainer video led to a 10% increase in conversions. That may not seem like much, but when you do the math with 100 million users, that’s 10 million extra customers simply from using an explainer video. With an estimated $4.80 of revenue per customer (based on estimates from 2011), that’s an extra $48,000,000 in revenue per year. Not bad for a “mere” 10% increase in conversions.

 

So why was the explainer video so important?

At this point, you may be wondering, “Why was the explainer video so important? What made it so successful?”

Here’s the answer:

  1. Video is worth 1.8 million words: According to a study conducted by Forrester Research in 2009, one minute of video is worth 1.8 million words. It makes sense, when you think about it. If a picture is worth a thousand words, then a video should be worth a couple million at least. Companies who don’t embrace video will need to hire a lot of writers.
  2. Video leads to huge increases in conversion: Based on research from Internet Retailer, product videos increase the likelihood of a purchase by 85%. Additional research showed that product videos gave 52% of customers more confidence in their purchase decision. Using the word “video” in an e-mail subject line has also increased open rates 13% and click-through rates over 92%. Based on another Internet Retailer study from 2012, 46% of people will share a video on Facebook, and 40% will e-mail links. How’s that for conversion-rate optimization and viral social sharing?
  3. Brain science shows why videos are effective: Simply put, our brains are hardwired to respond to videos. Not only are most people visual learners, but people retain 68% more information from video than from plain text. By using video, which stimulates both visual and auditory senses, you’ll make sure that customers understand your business 68% better than if they’d only read plain text.


Why explainer videos are worth the investment

Dropbox increased their conversion rate 10% by using a simple explainer video on their homepage. This 10% increase led to 10 million additional customers and $48,000,000 in extra revenue. This was all done with a 120-second explainer video that cost less than $50,000.

Do you think it was worth it? We do. $50,000 in exchange for 10 million customers and $48,000,000 in revenue is quite a return on Dropbox’s investment.

If you have any questions about creating an explainer video for your company, we’d be happy to help. Simply book a free consultation and one of our representatives will answer any and all of your questions.

Good luck!

Related Posts:
Why Explainer Videos Are Kicking Ass
How a Simple Video Skyrocketed Dropbox’s Success

Sources:
Thanks a (hundred) million, Dropbox Blog
Dropbox Hits 100 Million Users, Mashable
Explainer Videos Boosting Conversions, VideoRascal.com
Dropbox Startup Lessons Learned, SlideShare

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