Newsletter Referral Program: Step-by-Step Guide | 2024

Medha Mehta

Medha Mehta

newsletter referral program, morning brew referral, morning brew referral program, newsletter referral program,

Own a newsletter? Congratulations! We have crazy respect for writers and journalists who create original human-generated content in the era of AI. You’re like the Theodore of the movie “She”! To help you grow subscribers to your awesome newsletter, we have created this practical guide on how to build a successful newsletter referral program. 

Explore the practical steps to develop a successful newsletter referral program, including a breakdown of the costs associated with the necessary tools and technology at various stages, an overview of customer acquisition cost (CAC), and examples of some powerful referral programs. 

What’s the Newsletter Referral Program?

A newsletter referral program is a system to motivate existing subscribers to recommend your newsletter to their peers. Typically referrals are incentivized with rewards. This word-of-mouth publicity is more powerful and cheaper than other paid advertisements to increase the number of newsletter subscribers.

How does a newsletter referral program work?

Newsletter companies provide their existing subscribers with a unique referral code or link to share within their networks. When someone in their network subscribes using that link or code, the referrer is typically rewarded. Rewards can include the following:

  • merchandise, 

  • gifts, 

  • free access to exclusive or paid content, 

  • discounts, 

  • gift cards, 

  • event tickets,

  • memberships, 

  • points to be redeemed at a later time, or

  • other benefits.

1. Tiered reward system

This is one of the most popular and widely used newsletter referral strategies, employed by top newsletters like MorningBrew and The Hustle. In this approach, subscribers earn more valuable rewards as the number of people they refer increases. For instance, subscribers might receive a t-shirt for 5 referrals, a mug for 15, and a hoodie for 25 referrals.

Each new referral level achieved unlocks a higher-tier prize, motivating subscribers to continue promoting the newsletter to reach the next level and earn better rewards.

2. Contests with a Leaderboard

In this approach, companies set up a contest where the individual with the most referrals—or those in the top three, five, or ten—wins significant prizes. To encourage competition, a leaderboard is displayed, allowing participants to check their ranking. This method motivates users to refer others aggressively in hopes of outperforming their competitors and achieving the highest position on the leaderboard to win the contest. 

An example of a referral leaderboard.

Image source: Sparkloop

3. Referral point system

Similar to airlines' frequent flyer programs, the referral point system for newsletters works by awarding users points for each referral they make. These points can then be redeemed for a range of rewards including products, discounts, and other perks.

For instance, users earn 3 points for each referral and an additional 15 points if the referred person makes a purchase or subscribes to a paid service.

4. Two-way referral reward program

In this mutual reward system, both the referrer and the referred friend benefit. For example, if you refer a friend, both of you could receive 30% off a newsletter subscription for three months, or alternatively, you both might enjoy one month of free subscriptions. Major companies like Uber and Clinique employ this type of referral strategy. However, it is most effective when applied to paid newsletters.

An image from Clinique’s two-way referral reward program.

5. Cross-referrals

Cross-referrals involve newsletter owners partnering with their peers i.e., other newsletter owners to promote each other's newsletters to their respective subscriber bases, often for a fixed fee per subscriber. This strategy benefits both parties by expanding their audiences at a reduced cost. 

For instance, if the owners of newsletters X and Y refer five new subscribers to each other, they can do so without any financial exchange, effectively gaining new subscribers for free.

Let’s Talk Numbers

As we mentioned earlier, these referral programs are based on word-of-mouth publicity and people always trust their peers' reviews more than any paid advertisements. But what makes these programs more attractive is that you pay only for results! 

In other words, you spend money in rewarding someone only AFTER you get new subscribers. While in other advertising strategies like LinkedIn ads and Google ads, you pay-per-click, without any guarantee of the results.

In paid advertising, your customer acquisition cost (CAC) for paid advertisement (Google ads, Facebook, Instagram, LinkedIn) tends to be $3 to $5 per subscriber but it can go up as high as $25 per subscriber. 

While in referral programs, there is a guarantee of results at a lower CAC. This is the formula you can use to calculate CAC. 

CAC = (Cost per merchandise + shipping cost)/number of referrals 

Example: Let’s say you have decided to gift a good quality tee embedding your brand logo as a reward for referring 10 new subscribers. 

The custom tee costs you $15 per tee. And the shipping cost per tee is $6. This means you are spending $21 to get 10 new subscribers, making the CAC only $2.1 per subscriber

CAC in tiered referral programs - With a template

Below, we have provided a sample newsletter referral program with an average cost of the customized reward product, shipping cost, and customer acquisition cost (CAC). Here, we have considered Stitchi’s product pricing and MorningBrew’s referral program structure. 

Template: Tiered Referral Program Custom Acquisition Cost Calculation Template

Product(Customized with your logo)Cost per custom product, excluding $5.99 shippingTiers for the number of referralsCAC per subscriber
Basic Tote$65$2.4
Cotton Zipper Tote$1425$1.9
Roll Duffel Bag$1550$1.4
Quality Utility Bag$1975$1.3
2-in-1 Hoodie, Convertible to backpack$38100$1.4

How much spend is worth per newsletter subscriber? 

It depends on which how much you’re earning back from each subscriber. On average, a reasonable customer acquisition cost per paid newsletter subscriber is between $7 to $12, and free subscribers are around $1 to $4.

1. Paid newsletter model: If your subscription rate is $5/month, and a reader has an average six-month loyalty period, you’ll earn $30 per subscriber.  Here, we’re not considering customer lifetime value (CLV). A CAC of somewhere between $7 to $12 is a worthwhile investment to get such a subscriber. 

2. Free newsletter model: In this model, newsletters generate revenue through paid advertising, earning money each time an ad is clicked within the newsletter, or receiving a commission from sales of products promoted through the newsletter.

According to Brennan Dunn, owner of Create And Sell, he sold $100,000 worth of stuff via promotions he ran to his email list via 200 unique subscribers. He has 10,000 subscribers and 2% of them are buying the products. Hence, each subscriber is worth $10

Now each newsletter has a different story, type of audience, and product promotions. But on average, 2% to 5% of them are going to click on the ads and make purchases. If you’re new in this game, you’d be required to build a decent subscriber list to understand the value of each subscriber. But on average, spending somewhere around $1 to $4 per free subscriber is a prudent financial decision. 

How to Build a Successful Newsletter Referral Program?

Now, let’s talk about some practical aspects of the implementation of these programs. The following guide outlines technical requirements, some brainstorming strategical aspects, and tools and software discovery.

Let’s begin!

Step 1: Get the referral management tool

The very first thing needed to build a newsletter referral program is software that generates unique referral codes or referral links, tracks the referrals, and integrates with the fulfillment system. 

You have two options here. 

Option 1: Use your newsletter platform’s referral technology

Check with your newsletter platform to see if they enable your newsletter to have a referral program. Here are some popular platforms’ referral features. 

Newsletter platformReferral programThird-party integrationAccess price
BeehiivIn-built referral program with Scale planNo information providedFree
MailchimpNoReferralCandy, Viral Loops$59/month
Substacklimited referral infrastructure and reward systemViral Loops and many othersFree
Zoho CampaignsNoReferral Factory$95/month

Option 2: Use a third-party platform 

After trying out twelve referral software, we have shortlisted three software which are affordable, and have the necessary features to help you build the various types of newsletter referral programs with ease.  

Referral softwareStarting priceTrial without credit cardContest with a leaderboardTiered referral programTwo-way referral
Viral Loops$159/mo.YesYesYes, easy to createYes
Referral Factory$95/mo.NoYesYesYes
Referral Rock$175/mo.YesNo info providedYes, a bit complicated to set upYes

Step 2: Strategizing: What’s the reward? Costing aspect

Once you have decided which platform to use for generating unique referral codes and tracking the conversions, you must next decide how you want to reward your subscribers for making referrals.? Consider these three pillars while choosing a reward.

  • Cost efficient: Decide your ideal and affordable CAC per subscriber. 

  • Motivating: Provide useful and exciting rewards that motivate users to refer others. 

  • Achievable: Keep the referral milestones achievable. Create a tiered referral program with initial stages easy to reach and the later stages progressively more challenging. This encourages candidates to continue referring more people to win better prizes.

This type of reward is highly effective for a successful newsletter referral program for two main reasons: 

  1. people always appreciate receiving free, branded swag that is both useful and unique; 

  2. the swag acts as a walking billboard for your newsletter whenever it is used.

Here are some popular swag items for referral program winning prizes.

  • Tees

  • Hoodies

  • Crewnecks

  • Mugs

  • Totes

  • Duffle bags

  • Joggers

2. No-cost rewards

These rewards don’t cost your newsletter anything and provide some great savings opportunities for users. Use these rewards only when 

1.  your newsletter has a paid subscription and 

2. if you have some useful content to offer. 

These rewards include,

  • One or two months free subscription

  • Free access to any useful guides, photo albums, or any in-built tool

  • Free access to paid or premium content

  • Discount on subscription cost

  • Membership Access

3. Cash-based rewards 

Cash: A fixed amount is credited to users’ account in exchange for the referrals. 

Gift cards: Amazon gift cards, Mastercard prepaid cards, Tngo Choice cards, Starbucks gift cards, etc. are some of the popular rewards for referral programs. 

Coupons: Discount coupons for popular products and services are also attractive to some users. 

Step 3: Setup a Reward Fulfilment System

Once you determine the structure of your referral program, including which products to reward and the number of referrals needed, you need to establish a system to distribute rewards to recipients efficiently. The fulfillment process is one of the more difficult pieces of a referral system. If set up improperly, it can be resource-consuming and error-prone.

Phase 1: Data collection

For cash Rewards, discounts, gift cards, etc., your referral software will have an in-built feature to distribute the same. 

When it comes to fulfilling the merchandise, here are your options. 

  1. E-commerce website (Recommended)

Use a platform like Shopify, WooCommerce, or something similar, where users can select the products, apply the discount coupon, (if it’s free swag, provide a coupon code of the same amount as the product price), choose their sizes and provide the address and other information. 


  • Fulfillment becomes faster and easier. 

  • Most e-commerce software integrates with both: The referral program software and the fulfillment partner. 

  • Integration with swag merchandise partners (like Stitchi, Printful, CustomInk, etc.) will handle the dispatch from the warehouse to the customer’s doorstep hassle-free. 


  • These platforms cost $30 to $500 per month.

  • You’d require a custom domain or subdomain to host your store. The subdomain on Shopify is free i.e.

  • WooCommerce requires WordPress expertise to set up. 

2. Forms 

Create forms using Google Forms, Typeform, etc. to collect winners’ information like size, shipping address, name, phone number, etc. 


  • It’s free.

  • The data can be easily integrated into MS Excel or Google Sheets. 


  • Your chosen swag fulfillment partner must have a system to integrate the collected data into their system to distribute the rewards. 

  • If you’re distributing the merchandise manually, you need some dedicated staff members to verify the coupons and send the swags from the collected data. 

3. Custom-built

You can get in-house programmers or a third-party agency to build a custom e-commerce store for your program that integrates with your referral software and fulfillment partner. 


  • Because it is custom-made, you can avoid unnecessary features and complicacy.

  • For the larger and more frequent newsletter referral programs, in-house software can be cost-efficient. 

  • You don’t need to store your data on third-party software. 


  • It is a highly expensive and time-consuming process, suitable for larger newsletter companies only. 

  • You need to build all the security-related features to be compliant with the state-wide and nationwide laws to protect the custom data. 

Phase 2: Dispatch system

The last question is, how are you going to distribute the merchandise? This part involves,

  • Storage of the products i.e. warehousing

  • Packing and packaging

  • Shipping to recipients

There are two ways of setting up a reward fulfillment system.

1. Manual (Expensive, time-consuming, complicated)

You get all the products shipped at your location, store them at your facility or warehouse, and manually keep track of all the subscribers using MS Excel, send emails to each recipient to collect their sizes + addresses, pack the swags, and dispatch them to individual addresses. 

2. Automated (Cheaper, Hassle-free)

Choose a newsletter fulfillment partner like Stitchi (MorningBrew’s referral partner for joggers) that handles all the fulfillment tasks, from creating custom merchandise to delivering swags to the winners’ doorsteps. 

You’ll get a hands-free experience for the entire newsletter referral program for a nominal cost. Stitchi charges only a $1 fulfillment charge per order, which is very low compared to the facilities they are providing. 

The automated reward fulfillment partners handle all the following tasks.

  • Customize the merchandise per your requirements. 

  • Store the products in their warehouse.

  • Manage inventory.

  • Integrate with your referral platform to collect the order.

  • Pack and dispatch the product to the winners.

Case Studies: Newsletter Referral Programs

Here, we have explored three leading newsletter referral programs that have successfully leveraged the power of word-of-mouth marketing to build a newsletter empire. By incentivizing existing subscribers to share newsletters with their networks, these newsletters have organically grown their audiences. Tyler Denk, former Head of Product for Morning Brew and CEO of Beehiiv, attributed nearly 35% of Morning Brew’s subscriber growth to their referral program.

1. Morning Brew

Overview: Morning Brew is a daily newsletter that covers the latest in business, technology, and finance. It has gained widespread popularity, partly due to its highly effective referral program. It is gaining 1,000 new subscribers per day and 35% of its total subscribers come from the referral program.

How It Works: The Morning Brew referral program is straightforward: subscribers receive unique referral links to share with their networks. As individuals sign up using these links, the original subscriber earns various rewards. 

Here is MorningBrew’s tired referral program structure. 

Number of referralsPrize
10Mystery item
1000Work-from-home setup

2. The Hustle

Overview: The Hustle sends daily business and tech news in a conversational tone, aimed at informing and entertaining entrepreneurs and professionals. Their referral program, known as The Hustle Ambassador program, plays a significant role in their subscriber growth strategy. It has 300k Subscribers through this referral program.

How It Works: Similar to Morning Brew, The Hustle uses a tiered incentive system for its referral program. Subscribers get points for each person they refer, and these points can be exchanged for reward items. 

Number of referralsReward
4Official Ambassadorship
500The free event invites - lifetime

Conclusion on Newsletter Referral Programs

Newsletter referral programs are an excellent strategy for growth, creating a win-win situation for both publishers and their audiences. These programs are easy to implement if you have access to the right tools and technology.

By rewarding subscribers for referrals, newsletters like Morning Brew, The Hustle, and The Skimm not only increase their reach but also foster a community of engaged readers. These programs highlight the power of personal recommendations, which are often more effective than traditional advertising in today’s digital landscape.

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