Loom’s referral loops: a case study | by Rosie Hoggmascall | Nov, 2023


Driving growth with network effects, CRM and UX

Loom logo on light purple background

In the last article, we looked at how Loom uses email to drive retention and repeat engagement with their product. Helping them growth as they retain users over time.

However, Loom didn’t grow 42X in 5 years with retention alone….

Enter, acquisition growth loops.

Growth loops come in two main flavours:

  • Retention loops: where users stick around, leading to compound growth over time
  • Acquisition loops: where users do one of three things; create content, invite friends or pay for a product. These inputs are then used to acquire more users (e.g. money reinvested into marketing, or content used to attract new customers)

Loom grew from 500k users in 2018 to 21 million today as it employs both retention and acquisition loops.

The best products not only nail retention as they have excellent product-market fit, but also ensure they have a way to acquire new users over time.

Loom is one of them.

So, we’re going to dive into to how Loom uses emails to drive referrals, where they prompt invites in their navigation and how the two growth loops together led to hockey-stick growth.

First, a quick overview of referral loops.

A referral loop is when a proportion of new users share your product. A % of those users then sign up, and go on to share. And the wheel keeps turning.

Diagram of how referral loops work

At their core, referral loops work best when the product gets better the more people use it. If inviting others is core to the user experience — like Slack — then the product has network effects.

Many products try to tack referral loops onto the side of their product and give a monetary reward or unlock features as a prize. This is fine. But it will only lead to single-digit percentage point growth, nothing mind-blowing.


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