Incent All Parties Involved
Date Published: 04 March 2014
Incentives and offers are a mainstay of modern business sales and marketing. People feel better about making a purchasing decision if they think they are getting a deal, and frequently people need some kind of a push to get them to buy now, even when they’ve otherwise made up their mind that they’re ready to buy, soon. In most cases, incentives are given to just one person, the potential customer. It’s also typically the case with referral programs, which generally reward the referrer for someone they refer. These can be effective, to be sure, but they can also send the wrong message, at least in terms of recruiting bonuses.
Rewards for Referrals
When DropBox launched, they used their referral bonus to good effect. Initially they offered a small increase in free storage space to the referrer, and later when they increased their free space and referral bonuses, they applied these retroactively for past referrals, too. That’s a great way to earn loyalty from your customers, since otherwise many of their most loyal fans would have felt slighted. Providing an easy way for your users to see exactly how they’ve benefited from championing your product is important if you want to maximize how many will do so. Keep the friction low and the access to this information simple. Here’s how DropBox shows this data:
Clicking “View all space earned” will show every single user who signed up based on your referral, and when they did so.
While DropBox did a great job of this, they could have taken it a step farther. That’s where their competitor, Copy, comes in.
Don’t Just Reward the Referrer
Copy offers a service very similar to DropBox, but as a late-comer, they have a lot of catching up to do. There are a couple of ways they’re looking to out-compete DropBox. First, they’re offering more space for free (currently 15GB), and more bonus space per referral (currently 5GB). Second, and the main point of this article, they’re providing an equal reward to those who are referred, not just to referrers. Thus, if you sign up for Copy on their website without a referral, you only get 15GB of space, but if you use a referral link (like this one) you get 20GB right from the start.
Like DropBox, Copy also makes it easy to see how much space you’ve earned from referrals:
At the bottom of my activity list, it shows “Referred by …” showing the bonus I received for using a referral link. Personally, I think it’s brilliant to offer dual, equal incentives to both the referrer and the referred. You’ll also notice from my usage (“0 / 50GB”) that I haven’t yet started really using this service. However, the incentive system they put into place, and the amount of space they provide for free, both were sufficient to get me to try it out. I’m already storing different kinds of files in SkyDrive versus DropBox; it’s likely I’ll initially use Copy for some other kinds of files on a trial basis as well, and if it picks up, I might use it more and more. The point is, they got me to give their product a try, in large part through their rather clever incentive program. I will certainly remember this technique the next time I have a product I want people to quickly try out, and I hope you find it useful as well.
Steve is an experienced software architect and trainer, focusing on code quality and Domain-Driven Design with .NET.