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Ask HN: Dos & Don'ts of Referral/Invite Programs

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Ask HN: Dos & Don'ts of Referral/Invite Programs

#1

Post by johndbritton »

I've seen a lot of great referral and invite programs, they're definitely a great way to bring in new users and reward existing customers.

There are also a ton of really poorly executed programs that result in spam and angry/displeased customers.

What are the Dos & Dont's of Referral/Invite Programs? I'm asking specifically about non-free products. Gmail had a great invite system but it was totally free.

Two good examples I can think of off the top of my head are Linode and Dropbox.

# Linode "You refer someone and they use your referral code during sign up. They keep a Linode for 90 days. You then receive a $20.00 credit applied to your account."

# Dropbox "Invite your friends to Dropbox! For every friend who joins Dropbox, we'll give you both 250 MB of bonus space (up to a limit of 8 GB)!"

Re: Ask HN: Dos & Don'ts of Referral/Invite Programs

#2

Post by samratjp »

In my recent memory, I really liked the way Quora executed on the whole closed beta thing - skim this for more details http://techcrunch.com/2010/03/28/quora-has-the-magic-benchma...

Also, http://www.forrst.com has an invitation only approach going on and I think it works really great for a community like that which self-selects.

It really depends on the product you're working with. If the general excitement around it is high, you can do the invitation/referral to get more people interested like Dropbox and Gmail did. The Closed Beta idea also works because it gives some time to work out the kinks and have time to scale up (in the case with Greplin.com).

Re: Ask HN: Dos & Don'ts of Referral/Invite Programs

#3

Post by davidcuddeback »

Dropbox's referral program is a great example of one way to do it: both parties gained something from the referral. Drew Houston says that this 2-sided incentive increased signups for Dropbox by 60% (http://www.slideshare.net/gueste94e4c/dropbox-startup-lesson...).

Re: Ask HN: Dos & Don'ts of Referral/Invite Programs

#4

Post by johndbritton »

samratjp wrote: post #2

In my recent memory, I really liked the way Quora executed on the whole closed beta thing - skim this for more details http://techcrunch.com/2010/03/28/quora-has-the-magic-benchma... Also, http://www.forrst.com has an invitation only approach going on and I think it works really great for a community like that which self-selects. It really depends on the product you're working with. If the general excitement around i…

The closed beta option is really good starting out, to me Gmail nailed that one with it's invite mechanism. Dropbox is sort of the next step along the way, they're wide open for signup, but they want more users. Giving away space for invites is a great way to encourage sharing. It's bringing people closer to the paid product experience without requiring spending and getting new users at the same time. Linode does a great job of rewarding existing customers for bringing in new, paying customers.

Re: Ask HN: Dos & Don'ts of Referral/Invite Programs

#5

Post by johndbritton »

davidcuddeback wrote: post #3

Dropbox's referral program is a great example of one way to do it: both parties gained something from the referral . Drew Houston says that this 2-sided incentive increased signups for Dropbox by 60% ( http://www.slideshare.net/gueste94e4c/dropbox-startup-lesson... ).

I too am keen on both parties getting something, it just makes so much sense.

What do you think about the possible downsides of a two sided incentive? For example new users _always_ signing up with a referrer.

In Dropbox's case the reward is 250MB capped at 8GB, but if the same thing applied to the linode model of dollars in credit, it could spell trouble.

Re: Ask HN: Dos & Don'ts of Referral/Invite Programs

#6

Post by cloneofsnake »

Dropbox really is a great example of invites done well. Google's "limited invite" comes with a sense of smugness as you get something others don't.

Dropbox's referral program is on the spammy side of things though, I've seen people complained about it on Twitter.

I think the key in referral program is to reward your loyal customers who went out to sell your product for you. Make them part of your business, give them the power to give out freebies, but put a limit on it to create prestige... (a mix of Dropbox & Google)

The other thing is viral pressure... and nobody does it better (or worst depending the way you spin it) than Zynga. There's a public Google Doc named "What I learned from Farmville so you don't have to play it", really good read on its viral pressure mechanism! Not sure if it applies to your business but will probably get you thinking nevertheless.

Re: Ask HN: Dos & Don'ts of Referral/Invite Programs

#7

Post by johndbritton »

cloneofsnake wrote: post #6

Dropbox really is a great example of invites done well. Google's "limited invite" comes with a sense of smugness as you get something others don't. Dropbox's referral program is on the spammy side of things though, I've seen people complained about it on Twitter. I think the key in referral program is to reward your loyal customers who went out to sell your product for you. Make them part of your business, give them…

I definitely don't want it to come off as smug or spammy.

I looked up the Google Doc, here's a link for anyone else who's interested: http://meidell.dk/archives/2010/11/25/what-i-learned-from-fa...

I'll give it a gander and see what I can find.

Re: Ask HN: Dos & Don'ts of Referral/Invite Programs

#9

Post by dools »

We run a referral program at 8centsms.com

We have a very small user base at the moment (about 100 regulars) and about 10 are really into the product and give us great feedback.

Of those 10 there is 1 that has really given the referral program a go with gusto.

He crafted up an email, sent it to just about everyone he knows - seriously like 100 emails, with a very in depth explanation of why he liked the service.

Zero response.

Why? Because the format of the email is so spammy. The email subject still says "You have been invited to ... " etc.

Our goal now is to try changing the program so that instead of sending out referral emails from our interface, each person gets a unique referral signup URL that they can send to their friends in whatever format they like.

Re: Ask HN: Dos & Don'ts of Referral/Invite Programs

#10

Post by shadowpwner »

johndbritton wrote: post #5
davidcuddeback wrote: post #3

Dropbox's referral program is a great example of one way to do it: both parties gained something from the referral . Drew Houston says that this 2-sided incentive increased signups for Dropbox by 60% ( http://www.slideshare.net/gueste94e4c/dropbox-startup-lesson... ).

I too am keen on both parties getting something, it just makes so much sense. What do you think about the possible downsides of a two sided incentive? For example new users _always_ signing up with a referrer. In Dropbox's case the reward is 250MB capped at 8GB, but if the same thing applied to the linode model of dollars in credit, it could spell trouble.

How's that a downside? I believe some websites make signing up invite only. See Lockerz, Squarespace(?), Jackthreads, etc.
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