[HN Gopher] How to design a referral program ___________________________________________________________________ How to design a referral program Author : gmays Score : 63 points Date : 2022-08-15 16:18 UTC (6 hours ago) (HTM) web link (andrewchen.com) (TXT) w3m dump (andrewchen.com) | fegu wrote: | Has anyone designed referral programs for online B2B products? | What payback works, and is legal? | badtension wrote: | What are some drawbacks of giving subscription product discounts | for each confirmed (paid) referral, that accumulate up to 100%? | Assuming margins that make sense in case everyone other than the | leafs have 100% discount. | franze wrote: | Due to organisational restrictions (aka a dysfunction product | team) I "invented" the double "sweapsteak" referral giveaway. | Which worked mostly outside of the product (we just needed a "who | referred this user"-flag), mostly just newsletters. | | Basically you could win 2 IphoneX. One for you and one for the | person you referred. If you referred one person, this person was | a ticket for you. | | If this ticket/person won. The referrer and the referred/ticket | won an Iphone each. | | The more persons you referred the more "tickets" you had. | | If the referred person referred new people, then they gained more | tickets (additional to the ticket they were themselves.) | | worked massively. 2 IphoneX after all. And a benefit for the | person you referred and yourself. | | And an incentive for the referred person to refer more. | | repeated runs were shot down by the legal department (Fintechs | which want to become a bank care about law a lot) due to gambling | laws of the EU. | | CPAU (cost per active user) was way better than the later | implemented real referral program which worked with moneytary | incentives. | gruez wrote: | >repeated runs were shot down by the legal department (Fintechs | which want to become a bank care about law a lot) due to | gambling laws of the EU. | | >CPAU (cost per active user) was way better than the later | implemented real referral program which worked with moneytary | incentives. | | the secret ingredient was crime | logifail wrote: | Not wishing to rain on anyone's parade, but there is no mention | of broken incentives here. Tip for the marketeers, think about | the users who will _ab_ use your referral program. | | * I've signed up for Amazon's free one-month Prime trial at least | 20(!) times. | | * I've referred myself for many different kinds of products over | the years. | | * My friends and I have referred each other for all kinds of | things too. Sometimes with offline compensation, sometimes using | the honour system for a future payback. | | "Just sayin'..." | bombcar wrote: | The reason this isn't mentioned is that often referral programs | are _designed_ to be abused, so that metrics can be gamed just | before an important funding round, a IPO, etc. | | Seen it happen many times. | logifail wrote: | > often [referral] programs are designed to be abused | | Heh. | | As it happens my OH and I were sitting at the local | playground this afternoon chewing the workplace cud - while | vaguely watching our daughter play - and were discussing how | often higher management types _actually_ know what 's going | on at the coal face. | | "Not often enough" was our unanimous conclusion. | scottydelta wrote: | For companies like Uber and Doordash and other such companies, | the system is intentionally designed to be abused. | | They can use these abuse signups to show growth to the | investors and rake in more money. | | It's not a bug but feature. | kevmo314 wrote: | I ran an abusable referral program once. Those who abused the | referral program were the best because they kept sharing our | product onto new forums telling others about how easy it is to | abuse. Many of those new customers we would never have reached | and most second-degree referrals didn't abuse the system, all | we had to do was make that first customer feel superior to us. | So it was well worth it :) | arthurofbabylon wrote: | Having designed and implemented referral programs myself, I find | that this essay misses the mark. | | The single-most important quality of a referral program - by far | - is aligning with novelty and the social currency implicit in an | invitation. | | Almost nothing else matters. | | Without the referrer feeling "in-the-know" and valued by the | referred, without the product warranting being talked about, | referrals will not be a growth engine. | | As such, iterations upon a referral mechanism should first take | place at the level of language and context. Dollar amount, offer, | terms, etc are not the most effective levers. | | I advise neglecting referral programs until a product has natural | "word-of-mouth" growth, then consider a referral program as | lubricant upon that existing growth. | | Prior to good growth, one might try a light/crude alternative | sans transactional incentive -> gift 1-month free, give coupons, | require invite-only access. While it lacks the reward-loop, this | approach offers the same trigger as a referral program without | the heavy backing logic, saving 95% setup costs. The trigger is | the first part of a referral program to get right anyways, and | the rest of the referral mechanisms can be built on top of what | is working within this lightweight system. | | Once successful, note that referral systems follow the Pareto | principle (10% of referrers accounting for 90% of referrals), and | the designer might accordingly shift their attention to | encouraging serial referrers. | hot_gril wrote: | Yeah, the most successful (and annoying) referral program I can | think of is the One Plus phones, and it hit the marks you're | describing. Maybe the 2022 version is retailing something below | market value, creating artificial scarcity, and prioritizing | orders to referred people. | atwood22 wrote: | I've seen people bend over backwards and jump through flaming | hoops to score Uber Eats credits via referrals. There are | definitely people out there who value a monetary reward. | pedalpete wrote: | I agree with this, but I think the feeling of "in-the-know" | though valuable, only applies to certain products. I've been | thinking about our referral program, and am looking at it from | the perspective of "what is it in the referrer's nature that | will make them want to refer". | | "In-the-know" is definitely valuable here, as well as a way of | showing off their knowledge. | | However, if you think about a referral campaign for a charity, | it isn't about being "in-the-know", you'd want to tap into | people's level of caring, or measure of impact. | berkeleyjunk wrote: | Surprised that this post does not talk about one of the most | successful referral programs I have seen (way before Dropbox): | Paypal. I certainly made a bunch of money and got a few friends | signed up back in the day. | TomGullen wrote: | I think Chrome when it first came out was giving $5 per install | as well. | | You see similar rewards here in UK for referring people to new | bank accounts, Chase made a big move over here and was giving | PS20 to the referrer, and PS20 to the referred for minimum | commitment. If you got the money it's a fast way to gobble up | market share. | robk wrote: | Yep I ran the early Google referral programs where we paid a | bounty to adsense pubs that originally were referring Firefox | installs! | mandeepj wrote: | Does it necessarily have to be money? I know everybody | likes cash. Dropbox ran a very successful referral program | where they give double (I guess) the storage to both | parties. | TomGullen wrote: | Doesn't have to be cash, but I think it's important to | remember when Dropbox was doing it disc space was a lot | more valuable - I don't think it would work as well | nowadays. ___________________________________________________________________ (page generated 2022-08-15 23:00 UTC)