Do referral programs really work? | Hacker News Reader

Do referral programs really work?

2 pointsscrollinondubs6 comments

Has anyone successfully run a referral program (ie. tell your friend about our product and if he/she purchases and mentions you, you get paid)? We have decent word of mouth for JumpBox at this point and we're interested in accelerating that. My main concerns at this point are:

* Kathy Sierra is adamant about the idea that you never pay your evangelists. I hold her advice in high regard and I can understand her arguments: http://headrush.typepad.com/creating_passionate_users/2007/02/inspiring_your_.html

* in any cash-back incentive program you introduce the ability for people to game the system. I suppose it requires willingness to accept some level of that in trade for the boost in visibility.

* energy devoted to implementing the program is potentially be better spent on other evangelism activities (Joel Spolsky in Founders at Work said none of the sales-generating gimmicks he's ever tried has had more ROI than investing time in improving the product - http://www.grid7.com/archives/143_faw-25-joel-spolsky-of-fog-creek-software.html

But at the end of the day, I'm really curious if the referral program could substantially boost our word of mouth. This forum always has insightful startup advice - I'm hoping to get input (good or bad) from folks who have conducted referral programs or other successful activities to get the awareness ball rolling.

sean

I wouldn't recommend wasting time with it. The only reason for me to recommend something to my friends is that I think the service or product is great and it would be a good fit for them. If the product is great I will recommend it even if I don't get paid. If it's not great I'm not going to trick my friends into using it just because I'm getting paid.

A refferal program could however convince someone to adverise your product to complete strangers on the web. But if that's the kind of exposure you want just go ahead and buy ads.

true. I picture the scene at a user group where I myself would recommend a service or product to somebody and that recommendation is always strictly based on if I think it would be valuable for them given their situation. So I'm inclined to agree with you.

re: buying ads- We've experimented with google ads and stumbleupon so far (no print yet) and while we've seen plenty of traffic, there is a high educational component associated with our stuff for ads to be truly effective at this point (ie. visitor has to know the value of open source, be using virtualization, etc).

The good news is people who like JumpBox _love_ it because it removes so much pain. So the word is spreading, just not as fast as we'd like. We're evaluating the best way to "light the strategic fires" to accelerate adoption. Thanks for the advice.

sean

I just took a look at your website and I have to say I really like the idea of what you're doing and I would definitely consider using your product in the future (beats having to spend couple of hours trying to get something running myself).

Here something I couldn't easily figure out from your site:

what OS are the VMs running? what virtualization software do you support?

Well the VM's are running Ubuntu but the idea of a "virtual appliance" is slightly different than a traditional virtual machine in that you needn't think about the OS. Instead you focus on using the application and for all you know it's BSD or Linux or whatever under the hood but you're managing it via a web interface so you don't care.

to your 2nd question- JumpBoxes support the major virtualization technologies right now: VMware, Parallels, Xen, Virtual Iron, MS Virtual PC and Virtual Server. They'll also run on KVM, Qemu and Virtual Box though we don't officially support those.

I'm glad you dig what we're doing. If you try one out and really like it I would welcome any suggestions you have on how to better spread the word. We have this weird challenge where the people who use it rave about how great it is. We're not at a loss for a killer product- we're challenged in how we spread awareness of its existence.

thanks again

sean

(off-topic) JumpBox reminds me of BitRock (www.bitrock.com)

yes- same goal, different approach. They do install wizards to quickly get OSS apps running in the native environment. We do virtual appliances that are self-contained so they're portable and won't muck up the system. There are advantages to each approach but see a lot of interesting possibilities for value-adds once you control the environment in which the app lives.

sean

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