Scott Porad

Patrick McKenzie, creator of Bingo Card Creator, writes about how he was inspired by how Dropbox uses “two-sided incentives” to drive growth.

McKenzie’s inspiration comes from Drew Houston’s presentation at the Startup Lessons Learned Conference.  Houston explains how their customer referral program has been a huge success because it benefits for the referrer and referree.  Specifically, if you’re a Dropbox user and refer another customer then the person you refer will get a pay a lower price…and, as the referrer, you will get more services for the same price that you’re currently paying.

This is great…it makes “tell-a-friend” type features more palatable than because it everyone get value.  But, I’d argue that it’s lame for two reasons.

First, it’s still spamming your friends and social networks.  Sure, perhaps it’s not as bad as Viagra e-mail spam.  In theory, your friend has made the decision that you might be interested, and you trust your friend.  Still, it’s not Permission Marketing.

In addition, it doesn’t it doesn’t actually mirror real world behavior.  Here is my experience in the real world:

I want to sign up for a service like Dropbox—let’s call it Service X—and I want to get a discount.  So, I go around the office, or tweet, or post to Facebook, “Hey…does anybody have a discount code for Service X?”

So, how could someone like McKenzie harness the power of this behavior?  I’m not sure…perhaps when a user goes to sign up for a service there would be a way to “ask” your social network if anybody has a discount code.

For example, using social network APIs, it should be easy to determine if there are currently any existing Service X users who are in my social network.  From there, the system could send messages into my network asking my friends they would recommend the service.  If they do, then we both get a benefit.  In this model, I am giving permission to my friends to market to me.

Do you have any ideas for how we could improve dual-incentive tell-a-friend marketing?