| I think the key points are to align incentives, provide authenticity, and make it opt-in. Dropbox and Groupon align everyone's incentives by offering benefits to both parties and acquiring customers at a much lower cost than traditional ads. They provide authenticity because the folks referring their friends are genuinely using their products. Many consumers now frown upon affiliate marketing because they feel taken advantage of--the affiliates say whatever they think you want to hear in order to get you to buy, and some make an awful lot of money doing it. Plaxo was perceived very negatively because they were inviting their user's contacts without their permission. The book "The Ultimate Question" contends that asking "How likely is it that you would recommend this company to a friend or colleague?" is the single most important metric you should measure in your business. Thus, if you find that you have to offer too large of an incentive to your customers, you should instead focus on improving your product. We're building a social referral platform right now with these factors in mind that will make it super easy to run different referral programs and find what's best for your business. We're focusing on eCommerce now, but are getting into SaaS and other services very soon. Send us a note at hello _at_ curebit.com if you're interested in piloting with us. |