To: Jenn Hyman, CEO and co-founder of Rent the Runway

Dear Jenn,

It has been very exciting to watch Rent The Runway usher in a new model of clothing consumption—one of the first that puts sustainability at the forefront. The company has continued to scale in the face of many skeptics, and your customers have led the way to a massive and ever-expanding business.

As Rent the Runway continues to grow, there are a number of promising channels to build on. Word-of-mouth is always crucial for innovative services like yours, but it is also hard to measure—or control. Referral programs, conversely, are very easy to measure but often remain overly technical and fail to grow a special attachment between a prospective consumer and the company—the same fundamental programs are used for Uber, Seamless and many other services, without any differentiation.

But Rent The Runway has a unique opportunity to build a referral program that comes directly from the DNA of the service.

Here’s one idea about how to do it.

Launch Frentals.

For many women, picking out something new to wear in a friend’s closet is one of the easiest and most fun ways to shop. What if you took this habit and built on it to launch Frentals—a program that would allow Rent the Runway subscribers to share the rental service with their friends?

Frentals would serve as the offline equivalent of an online referral program. Here’s how it could work:  

  • Existing subscribers could reserve an extra item for their friend by going to the site and adding an extra item to their bag. To do this, they would put in their friends contact info (which gives Rent The Runway access to it). This would send the friend an email to enter her size and shipping info, further deepening her data profile.
  • With each new friend, Rent the Runway would collect the newcomer’s email and size data, which it could use to market to her in the hope that she would sign up to be a full-fledged member.
  • For any friend who converts to become a bona fide Rent the Runway customer, the original subscriber would unlock three more Frentals and the new customer could get an increased item allowance for her first rental.
  • If a customer is not successful in referring new subscribers with her first three Frentals, she’d unlock three more each year.  

Frentals bring your business a number of advantages. The program would go beyond word-of-mouth advertising, referral codes and even gifting, introducing new potential customers to Rent the Runway by allowing them to test drive the service like full subscribers—in this way, the product would become the referral mechanism, instead of an impersonal code or dollar amount. This means potential customers can experience your services extremely close to the way that existing customers do, which is crucial for growth. It would also turbocharge the word-of-mouth growth that likely powers a significant amount of the company’s customer acquisition.

Rent The Runway has nearly limitless growth ahead, and ideas like this will only help it unlock a more sustainable and profitable business sooner. Let me know if you would like to hear more.

Richie Siegel
Founder and Lead Analyst
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