If you use several services and apps, you’ve probably been inundated with requests from the company to refer friends or acquaintances to try the product. This may come off as annoying or invasive. But this growing trend isn’t something to shrug off — it can be a legitimate, respectful means of proliferating their product to qualified prospects (your friends) while taking a firm stance against feeding the online advertising monster. Sure, not every company has this larger notion in mind, but a recent post from the co-founder of Basecamp (previously 37signals, RIP) had me contemplating this tactic in an entirely different context.
At first, it seems like most companies are trying to game you to hand over your friends’ emails to solicit their product. For urban dwellers, Uber and Lyft do this incessantly with ubiquitous banners and reminders to earn credits or money off future rides if you refer a friend. You can make money by doing so, but you compromise very little by abstaining. When these were actually new services, I’m sure quite a few of us handed out our referral codes to friends to incentivize them to sign up for free credits themselves, and backpay our selves with referral credits. No harm done. Everyone wins. And keep in mind this is far from a ponzi scheme or a multi-level marketing ploy. It’s a simple referral or “influencer” marketing program.
From this process, we are all voting with our trust — the company in question is voting on you, the customer and trusted user of the product already, and you are voting on your esteemed referral. We aren’t passing anything along aside from an email to a company we trust with our own email, and put our weight in a recommendation that we find valuable or useful to another vetted individual. The companies investing in you are putting their media dollars in something that is more humane than into the massive online advertising machine that exists today, the latter of which is oftentimes fraught with all kinds of digital rights considerations.
So when Jason Fried stated the following, it resonated and, frankly, made sense:
Every dollar you spend is a vote, and we were casting hundreds of thousands of votes for big companies that are tracking people’s every step, every move, every curiosity, and every detail of their lives. Fuck that.
Indeed. As a company, you can do as you please, spend your money where you deem it most necessary and effective, but to take a stance like this is commendable. Sure, it’s a referral program and Basecamp is using their current, loyal customer base for new leads into its productivity platform. But it isn’t for credit on next month’s payment; rather, it’s straight cash. They’re paying you to recommend a product to which you’re already loyal.
If this sounds familiar, the notion is certainly nothing new. Amazon might be running the most extensive referral system on the planet with their Amazon Associates Program, essentially an opt-in affiliate network. You add a tracking parameter to every URL of a product you reference or recommend on your site, and if there’s a purchase made, you get a kick-back. The difference here is that Amazon is also one of the largest data collection conglomorates, and this program comes at a cost — Amazon is tracking you and your referrals, along with everyone else who engages with either the Amazon.com domain or an Amazon ad placement anywhere on the web. (In addition, they track you if you click on someone else’s affiliate link, whether you knew it was an Amazon affiliate link or not.)
So what’s so grandiose about Basecamp’s philosophy? They previously had “experimented” with running ads on the Internet's large ad networks (Google, Facebook, and Twitter), but after spending some six-figures, they stopped:
Why give money to Facebook, Google, and Twitter when we can give it right back to our customers? They’re better advocates for Basecamp than any ad we can write. They’re not a platform, they’re people who know other people who can surely benefit from Basecamp just like they are.
That’s fluff, you might say. But they made a conscious decision to cease voting with their money to feed ad ecosystem, and instead put that money in the hands of current customers. And they aren’t the only ones pursuing this kind of referral mentality. Another example is Simple, a financial solution for “saving easily” and “banking beautifully.” They have a fairly unique proposition for referrals — instead of paying you cash, their referral program yields you a “handcrafted home for your Simple card.” In collaboration with Tanner Goods, Simple sends you and your referred friend a custom leather wallet. It’s a wry play on the debit card you receive when you become a Simple customer, as well as the provision of a handsome gift to anyone exerting the effort to refer someone to the company’s CRM.
The defiance against investing more money into advertising models that rely on tracking, data collection, and data sharing is a welcome tactic by companies to earn respect for their customers as well as future prospects. These non-traditional referral programs are clever ways to circumvent the expected normality of affiliate systems engineered by Amazon and others in the modern era. If only we voted more of our attention away from constant interaction with the platforms deploying such ad networks, we’d have the leverage to demand more transparency, accountability, and performance from the services we use.