Flip the Funnel: How to Use Existing Customers to Gain New Ones

REFERRALS

If you think about it, a referral is a kind of personal recommendation that carries a corresponding social currency. “Tell him Mo sent you” is the physical version of a referral; in the digital space, Amazon.com has one of the most robust affiliate networks that build referring sites in to a purchase process. In a virtual or social environment, GB1, GB2, and GB3 are the codes Cali Lewis, the host of the popular video tech podcast Geek Brief TV, uses when registering a domain from GoDaddy. And although a referral doesn’t have to involve some kind of compensation plan, it usually does.

I believe that these kinds of systems will be deployed across the board at an accelerated pace in the months and years ahead. It’s an inevitable response to the continued explosion of choice, fragmentation of traditional promotion and distribution channels, and adoption of social networks as a more efficient means of spreading the word. I also think there will be a Pandora’s box of missteps, controls, rules of engagement, rebukes, regulation-versus-deregulation disputes and deliberations, and more that will come along for the ride. In the next several chapters, I will elaborate on how companies are formalizing or can formalize this practice without muddying the drinking waters. It’s surely going to be a heated topic for debate going forward, so we might as well tackle it sooner rather than later.