Don't be trashy.

This week Birb polled 80 ecommerce businesses to ask why they don’t use referral or affiliate marketing, and the leading response was a fear of alienating customers with pushy MLM-style tactics.

This concern comes up in almost every customer and user interview Birb’s done. Pressuring a friend to buy something so you get a kickback doesn’t just risk burning social capital – it feels gross.

19th century German philosopher Immanuel Kant isn’t quoted much in referral marketing circles, but here’s his take on the matter:

“Act in such a way that you treat humanity never merely as a means to an end, but always as an end.”

— Groundwork of the Metaphysic of Morals [and Marketing]

Or to put it simply: don't use people. Don’t be trashy.

"Don't be trashy" should be the fundamental theorem of referral marketing. It's been Birb’s guiding principle since before Birb was “Birb”. So much of the branding around affiliate marketing is nakedly transactional: “FriendBuy”, “SwagBucks”, “ShareSomeFriends”. That can work for impersonal influencers or behind a whitelabel, but it's holding the industry back.

Social capital drives referrals

To grow referrals you need to understand why people refer anything in the first place. When I recommend a favorite restaurant, a trusty brand of hiking shoes, or a good book, I’m not getting paid. I’m sharing my expertise as a favor (as well as showing off my insider knowledge).

All of the most successful referral campaigns of all time were made possible by intrinsic social capital incentives, then catalyzed by extrinsic rewards.

Most recently, Clubhouse gave each new user two invites to share. Artificial scarcity made invites feel like big favors, so giving them out felt like an act of generosity, not coercion. More typically, companies use two-sided reward incentives to avoid the problem of trashiness.

Seamless likely gets more than twice as many referred customers through a “Give $10, Get $10” structure than they would by only offering the referrer $20.

Why customers don't refer businesses they like

There are three key barriers that prevent people from making referrals:

  1. Not knowing a referral opportunity exists
  2. Not knowing which friends would be interested
  3. Fear of trashiness

Most businesses do a bad job advertising their referral campaigns. Post-checkout offers aren't great because people don't recommend a product before they have a chance to use it. Emailing customers afterward can feel spammy. Birb's solution is to embed offers in targeted Google and Facebook ads where they're a persistent reminder, but relatively unobtrusive.

Suggesting who else a user knows who'd be interested in a product is a hard data science problem that requires extensive data on consumer preferences and a graph of social influence. Birb's origins in grassroots political organizing give us a head start on this, but it's a long-term project to multiply the effectiveness of referral campaigns.

Not being trashy is comparatively easy. Be smart and empathetic in your copywriting. Set fair terms for rewards. Ultimately, don't treat your customers as means to an end – treat them as you would a friend.