Refer2Save was born in a discussion about the problems faced by traditional Deal-A-Day (DAD) sites and quickly grew into a B2B Marketing concept. Refer2Save proprietary declining price promotion generates new customers through referrals from existing customers.
Here’s the problem with traditional DAD sites:
- Ecosystem of the Cheap – Traditional DAD sites attract a customer base using their low prices. Consequently, the user-base is biased towards deal seekers. If that’s what the user comes to the deal looking for, what are your odds of getting them back into a full price purchase.
- Disloyalty by Design – A traditional DAD site sells into a “loyal” fan base. Unfortunately, the more loyal these customers are to the deal site (buying lots of deals), the less loyal they can be to any previous purchase (because they just purchased a deal from a competitor).
- Limited Social Potential – DAD sites are concentrated in fashion and overstock. Fashion is particularly poor for word of mouth because you don’t necessarily want your friends wearing the exact same clothing you wear. Overstock has the added issue of stock-outs so promoting a site to your friend actually reduces your odds of getting into a deal.
Despite a similar “feel”, a Refer2Save promotion delivers far more value to the brand (deliberately so).
- Seed with Existing Customers – Instead of selling to the cheap and disloyal, a Refer2Save campaign starts with your existing, loyal fans.
- Generate Word of Mouth – Our price falls as more people participate in the sale so existing customers are incented to refer their friends to the sale. This is a win for the brand and a win for the existing customers.
- Know Your Customers – Our deep analytics (still under development) give us insight into your influencers so that you can focus your promotions on the most effective evangelists.
Refer2Save exemplifies the strategic potential left in a billion dollar marketplace. Don’t be surprised if your market also provides an opportunity to pivot and significantly change your value proposition. At minimum, a market analysis can help you recognize (and perhaps overcome) the assumptions you carry about your market.
Refer2Save found an alpha user and had considerable success improving performance of the system. However, the user was a relatively poor fit with the business their product included a diet additive and buyers were unlikely to publicly announce that they used the product. At the time, we were unable to recruit a user with a better fit.
My partner and I got too busy to seek further pilots. However, our postmortem suggests that we were targeting the wrong market. We originally focused on small business owners since they would have a loyal base and benefit from the publicity. Unfortunately, small business owners frequently lacked the marketing expertise to appreciate the subtle marketing benefits. If we were to resume the project, we’d refocus our sales and marketing effort on marketing agencies since their employees would better appreciate our value proposition.