I'm trying to see what would be better to bake-in to my website to create a incentivized viral loop. If I just add a simple "share" feature it makes it easy to just share a message and I would have to give them their incentive for doing this immediately, but then how do I actually verify/control that they are sharing to actual friends or didn't set up a fake social media account to share on...less friction immediate reward. On the other hand, with a "referral" system I have more control over who is actually signing up based on the unique referral ID I provide to my customer and I could give them their incentive after the user signs up. However, I feel less people would be willing to do this because the incentive is not immediate....more friction delayed reward.
I like the fact that you've considered the reward system for sharing, although I'm not sure why it would have to be one or the other.
There's really no downside to offering share functionality but I've seen many cases where it's just an afterthought that's there if someone wants it, but doesn't really offer any incentive to do so.
I like it when people prompt sharing with some of the work already done, such as "Tweet this: Here's 140 Characters already setup for you" (my words). It provides some context for what you'll be sharing, and if you're active on Twitter, just does a nice job of teeing up the reward (feeding your Twitter feed beast).
On the referral ID side, how about offering some sort of immediate benefit just by making their first share? Like offering $5 credits (I'm making up a number) just for sharing. Sure, you'll get some people that take advantage of the system, but you'll also get people actually helping share the word.
Happy to answer more questions around specifics.
Great question. My humble opinion is that sharing really only helps or use visibility. You have to consider the web and mobile web especially to be a sequence of steps. If they share, then what happens?
What do hey get out of sharing? Does the sharing benefit you or them? How can they tell there is value in sharing and if there is value, how do they experience it?
LinkedIn is a true example of a referral system that works by network effect. It's very clear for a user to see how she benefits from referring people to use it. More people for her to connect to. More opportunities for a career benefit. In fact, the incentivizing is built right into the media.
I'm happy to talk about this more. Let me know how I can help. Just remember that customers need two really important things. They need a reason to change current behavior and they need an example to show how changed behavior benefits them. Every new app or business on the web is an opportunity to choose.