30 April 2018 | 11 Comments
Have you ever shared a referral link?
When I was thinking about this post, my initial answer was no. I was thinking about it in terms of specific tweets or Facebook posts where I mention a project and share a referral link, which I don’t recall doing.
But then I realized that I’ve definitely embedded referral links in this blog. Not often, but it has happened. Last week I did it while writing about GROWL. There’s one for Capital One in my accounting and finances post. And I’m sure there are others.
The key, I realized, is that I haven’t actively shared referral links on social media. Rather, I’ve passively included such links in related posts.
I mention this because it impacts the way I’ve previously viewed the concept of referral links. In the past I’ve considered them somewhat disingenuous. If you share a referral link with me, is it because you genuinely believe in the project or product, or are you just trying to enhance your pledge?
I think the answer is probably somewhere in the middle. That’s kind of the point of referral links–they give people an excuse to share something they’ve already bought into.
Should You Offer Referrals?
My perspective on referral links has evolved into this: They don’t hurt, and they might help.
Let’s use a concrete example: Say you’re running a project where the core reward is $20. If someone pledges via a backer’s referral link, you will give that backer a $5 refund.
So every time a referral link does its job, you gain $20 and then lose $5. It’s a net of $15 that you almost definitely wouldn’t otherwise have (there’s no proof that the person wouldn’t have backed anyway, but I think it’s unlikely).
There’s a soft benefit as well: goodwill. When I click on a friend’s referral link, I feel like I’m helping them, which makes me happy. This happiness will carry over to the way I view and engage with the project.
Types of Perks
Here are a few examples of perks:
- $5 refund
- 10% refund
- free shipping
- promo cards
- bonus copy
That said, I think the most effective perks are those that allow both backers to benefit. For example, if you click on my referral link to back a project, I get $5 and you get $5. That doesn’t work well for a project where the reward is $20, but if it’s $50, you have more margin to work with. This is what Capital One does: I get $10, you get $25.
Types of Services
- Kickrock.it: This platform, while still in beta testing, is extremely flexible. It allows creators to choose both requirements and perks. I used it as a backer for GROWL, and it was quite easy to create my referral link and see the stats for it. On the back end, they’re planning to sync the referral data with the Kickstarter survey data so you don’t need manually update each applicable pledge.
- Kickbooster.me: This is more of a pure affiliate service. Boosters–people who share the links–get a % commission on the new backers they bring to the project. While it doesn’t have the flexibility of Kickrock.it, it encourages boosters to discover new projects on its platform (and then share them to increase their commissions).
As a publisher that no longer uses Kickstarter, of course I’m interested in the potential of referral and affiliate marketing beyond crowdfunding. I could use it to provide links to reviewers, ambassadors, and followers, but there’s one area I’m more interested in than the others: tracking return on investment (ROI).
For example, I was recently approached by a huge YouTube creator about having them feature any of our games on their channel (it’s not a review channel, in case you were wondering–I would never pay for a review). The cost, however, was quite high. Let’s say it was $10,000. If I spend that much on a video, will I increase sales enough to justify the expense?
To a certain degree, it’s impossible to answer that question. If you watch a video today about Scythe, it may nudge you towards buying it someday, but it doesn’t mean you’ll rush out to buy it today.
With a referral link, however, I can do a much better job of answering that question. I can look at the number of people who click the link and the number of people who actually buy it on our webstore to determine if I received a justifiable return on my investment. Also, it could potentially help me negotiate a lower up-front cost: Instead of spending $10,000 on the video, I could perhaps spend $5,000, with $10 from every referral-link purchase going to the YouTube creator.
What are your thoughts on referral links, perks, services, etc? If you’ve used referral links as a creator or backer, what has your experience been?
If you gain value from the 100 articles Jamey publishes on his blog each year, please consider championing this content!