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The worst users come from referral programs, free trials, coupons

andrewchen.com

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Re: The worst users come from referral programs, free trials, coupons

#11

Post by jstanley »

dazc wrote: post #6

Recent example, a piece of furniture costing over £3k and I can get 10% off if I sign-up to their newsletter. As someone who works in retail marketing, this is a guaranteed way to ensure I don't spend a penny in your store.

Are you saying that if they offer 10% off when you sign up to the newsletter, that will prevent you from buying a product from them at all? Why?

Re: The worst users come from referral programs, free trials, coupons

#12

Post by JoshTriplett »

How well do invite systems perform, of the style that gmail and other services famously used, where you need an invite to sign up and users get a certain number of invites to hand out? (They do a great job of rate-limiting user acquisition, such as if you want to ramp up slowly for resource reasons. The question is, how's the quality of users obtained through invite systems?)

Re: The worst users come from referral programs, free trials, coupons

#13

Post by nottorp »

That's a definite it depends :)

In the case of Uber, all those didn't help acquiring me as a customer. I wasn't even aware of the existence of any coupons, referrals and stuff. I installed it because clicking a button in an app is much easier than calling for a taxi on voice AND explaining where exactly you are.

In other cases though, they help.

If you don't have a free trial or free tier and don't have an unique offering suited to me, how would I know if I want your product? As a small piece of anecdata, I would have never subscribed to GeForce Now if they hadn't let me try it for as long as I wanted in 30 minute sessions.

Coupons are a well known form of discounting for customers who have more time than money.

Referrals may be useful if your product needs to achieve critical mass.

Etc etc, I'm no professional marketer.

Re: The worst users come from referral programs, free trials, coupons

#14

Post by mrweasel »

dazc wrote: post #6

Recent example, a piece of furniture costing over £3k and I can get 10% off if I sign-up to their newsletter. As someone who works in retail marketing, this is a guaranteed way to ensure I don't spend a penny in your store.

What programs like that tells me is that I can get at least a 10% discount if I talk to one of your sales people. My wife doesn't consider something a discount if it's less than 20%, because "You can always get a 20% discount" (on certain product categories).

I did have to deal with a store where I almost couldn't buy something, because I refused to signup for the "customer club program discount card", which gives you a 20% discount. The staff just looked confused and didn't know what to do. In the end my wife filled in the form and got the stupid card.

Re: The worst users come from referral programs, free trials, coupons

#15

Post by oatmeal1 »

This is a big reason why it's so hard to start a startup. You need access to high quality customers. You can't just start by making the beta version of your product free, because the customers you want aren't motivated by price. Implementing feedback from the low quality customers you start out with can make the product worse for the customers you actually want.

Re: The worst users come from referral programs, free trials, coupons

#17

Post by Veuxdo »

ghaff wrote: post #5

I sort of expected something more insightful. This general topic was discussed quite a bit when Groupon was a thing. The coupons brought in people who were pretty much only there for the discount, tipped poorly, and generally didn't become repeat customers. They weren't looking for a new place. They were looking for a deal. ADDED: Per another comment, there is probably an angle whereby a free trial is the necessary n…

The note at the end that referrals performed better than non-referrals _for drivers_ was interesting. Plus I'd say that even if this isn't earth-shattering insight, there is still benefit hearing the results for something on the scale of Uber.

I agree that including free trials with referrals and coupons doesn't make much sense. As others have commented, free trials are all-but-unavoidable in certain markets.

Re: The worst users come from referral programs, free trials, coupons

#20

Post by forsyth2024 »

For the most part, it doesn’t sound like these “bad” customers are doing anything illegal or in violation of TOS. They’re just exploiting offerings for something they wouldn’t normally spend any money on. To be surprised that they don’t stick around long or spend as much as non-incentivized customers shouldn’t come as a surprise to anyone and shouldn’t be seen as some kind of failing. They would not normally have used the service anyway so why moan when they use it for a little while and then stop?
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