Is Dropbox-like "virality system" a good replacement for traditional marketing?

We have a prototype of the service, that is almost ready for the public testing. It will help small and medium service companies like interactive agencies, consulting companies etc. replace their traditional marketing with the consumer-affiliate program.

Here is a sample usage scenario:

1. Send your customer thank you letter with a simple “You know someone who might be interested in doing business with us? Let them know!” link.

2. Give 5% discount on future engagements to your customer for each new one you get thanks to his endorsement (you'll give max 25% discount).

3. Give 10% discount to the new customer that came thru the referral link.

4. Our system makes sure that you keep track of all the users, references and rewards.

Our system keeps track of all the deals, offers, customer contacts and referrals so basically it can help you control most of the sales/marketing part of your business.

Sounds interesting? Please sign up for the beta testing here: http://virality.smartupz.com