Rethinking Referral Marketing (Part 10)

During the 2014 Lok Sabha election campaign, when I was assisting in the election campaign of Narendra Modi, my team at Niti Digital came up with an interesting twist on the Amway-type multi-level marketing program. Our goal was to get Modi supporters to identify other Modi supporters, and let us know. This way, we could ensure that all of them received the right nudges and reminders on the polling day to go out and vote.

So, we came up with an idea called “Namo Number”. An existing supporter needed to SMS their VoterID to enroll. They could then get others to also show their support by asking them to send their VoterID along with the mobile number of the referrer. This way, a tree could be built. We extended this to two levels and gave one point for every sign-up. (To keep it simple, we did not distinguish between the first and second levels.) The total count of the tree was the Namo Number.

We showed a leaderboard in real-time, and offered an incentive that those with the highest Namo Numbers would be invited to the BJP HQ in Delhi for an interaction with the party leadership.

The program worked very well – we ended up getting well over 10 lakh SMSes across states. The VoterID helped us identify the supporters at a booth level who could then be prioritised for the turnout operation on election day. It also helped identify the “super spreaders” – those with a large influence in specific areas.

Now imagine applying this same idea to the world of referral marketing. Allow the best customers to create a multi-level network of referrals for which they get credit based on the lifetime spends of the referred customers. This is how brands can build customer evangelists and measure their impact in a transparent manner.

The one big difference between what brands like Amway and others do is that there is no cost to joining. Each of the best customers can decide if they want to participate or not. There is no pressure and there is no payment; there are just good rewards as a recognition of the contribution made to the growth of the brand they love and are loyal to.

Taken together, the three ideas – focusing on best customers, rewarding them based on the lifetime value of their referrals, and extending the rewards program to the downstream of the referred customers – can transform referral marketing and make it a very powerful parallel track for new customer acquisition.

Tomorrow: Rethinking Referral Marketing (Part 11)