I would like to give my "existing" customer their reward (a) after my "new" customer has paid for using my services for the first time? (b) or I can give their reward immediately after my "new" customer signs up for an account? Regarding my "new" customer I can give their reward (a) immediately after they sign up for an account (b) or give them their reward after they use my services by paying first and then they would receive their reward for the second time they use my service? "New" customers need to use a credit card when signing up for an account where I charge a $1.00 signup fee just to verify and make sure the credit card is valid. However, it can take a couple weeks before a "new" customer actually uses my services which they would pay for. I guess requiring "new" customers to use a credit card makes it more secure and allows me to give my "new" customer their reward immediately? However, for my "existing" customer should I be giving them their reward immediately or delay it until my "new" customer either uses my services for the first time (either by paying or using the reward I gave them initially)?

It sounds like you want all your "new customers" to register with their credit card info so that you can verify that it isn't someone just referring themselves via zombie email addresses. That makes sense, otherwise you'd be giving away a lot of rewards for fake referrals.

When people send referrals to friends, they aren't doing it to make rent money, they're doing it for a reward that would be nice to have, but isn't essential, and isn't time critical. Because of this, I don't think that people who actually think your product is cool would hesitate from referring friends if they know the reward could take weeks to come.

However, you _can_ get the best of both worlds, by also giving _another_type_of_reward_ immediately after each of their friends signs up. We'll call this other reward the "social reward". It would be an email you send saying, "One of your friends just signed up, thanks so much! We'll send you a reward once they start using our services!"

That way the referrer would be getting an immediate reward once any friend signs up by
A) seeing that they provided their friend with something useful, and
B) knowing that their 'real reward' is imminent.

Meanwhile, you would also be giving the referrer feedback about how many of their friends signed up.
A) If very few of the referrer's friends sign up they can ask them why they didn't, or give reminders. So they'll be doing your work for you.
B) Meanwhile, if many of the referrer's friends sign up, it would be a powerful implementation of a psychological concept called "social proof" , which essentially means that the more people like you do something, the more you do it too. So the more of the referrer's friends sign up, the more committed the referrer becomes to your product too.

In summary:
- Give the big reward after their friend(s) starts actually paying for your services (i.e. delay of possibly weeks).
- Also give "social rewards" via email immediately after each of their friends signs up.
By doing those two things you'll be getting the best of both worlds + a bunch of other cool side effects.

If you want to discuss these, or other options further, feel free to send me a message,

all the best,


Answered 8 years ago

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