My Users Say "No Thanks" to Free Money?(blog.foundrs.com)
blog.foundrs.com
My Users Say "No Thanks" to Free Money?
http://blog.foundrs.com/2011/08/17/my-users-say-no-thanks-to-free-money/
17 comments
There are plenty of studies that show that people will do things for free that they'll never do for pay, and moreover it's pretty easy to come up with intuitive examples of this in real life. Lots of people would be more than willing to help their buddies move, doing many hours of manual labor for free because that's what friends do, with the only tangible reward being pizza and beer at the end of the day. But if your buddy went on Craigslist and offered the monetary equivalent of that pizza and beer to hire movers, nobody would take him on it, as it would be way below minimum wage; if he tried to offer you that money instead of the pizza, you'd be insulted.
This setup probably makes people feel like they're being bought. You can still buy their clicks, but you'll probably have to figure out a way to make them feel like it's all their idea.
I agree it felt a little spammy, but I'm so used to people online selling their mothers to save a few cents (think Groupon). Discounts are pretty much part of the American culture. Not this time, though.
Groupon doesn't ask you to put your personal reputation on the line to endorse a product. You're essentially asking people to be pitchmen (or -women) for a product -- which involves putting whatever reputation they've built up among their social circles on the line for you -- for a measly $2. This has an entirely different vibe to it than the Groupon model of "Hey, I love this restaurant, sign up for this Groupon with me and we'll get half price!" The "endorsement" here is less obviously for hire, not least because there's a third-party service in play.
Overall, what everyone is telling you (here and in the comments on your blog post) is that putting links and/or endorsements on a social networking service is much more than just a fee-for-service proposition; there are other intangible qualities that are important, primary among them what your friends on these social networking services think of you. You want to believe that your friends post links to things because they're good, not because they're getting a discount. In fact I'd argue that one of the main reasons people like social media in the first place is that it's a person-to-person interaction that's not commerical in nature.
Overall, what everyone is telling you (here and in the comments on your blog post) is that putting links and/or endorsements on a social networking service is much more than just a fee-for-service proposition; there are other intangible qualities that are important, primary among them what your friends on these social networking services think of you. You want to believe that your friends post links to things because they're good, not because they're getting a discount. In fact I'd argue that one of the main reasons people like social media in the first place is that it's a person-to-person interaction that's not commerical in nature.
Whenever I'm presented with stuff like this (another similar situation is being asked to apply for a loyalty card at most any store), I think of it this way - the reason you have to ask me to do something is because it's a task that you want to make sure doesn't stand in the way of the rest of the transaction, meaning it's probably going to be something that's going to irritate me or something I won't want to do. Offering to bribe me a trifling sum in return means it's probably a serious pain in the ass, so of course I'm not going to do it.
When someone has their hard-earned money out and is about to pay, they are cautious. They have made sure that they have gathered exactly what it is they want to purchase. They know that virtually anything out of the cashier's mouth or anything appearing on the checkout page that isn't "thanks, come again!" is likely to be something that's going to take time to do, cost them money, cause them to lose some of their privacy, receive junk mail, spam their friends, etc.
He'd probably be better off simply putting a message on the "transaction completed" screen simply asking them if they could do whatever it is he wants them to do.
When someone has their hard-earned money out and is about to pay, they are cautious. They have made sure that they have gathered exactly what it is they want to purchase. They know that virtually anything out of the cashier's mouth or anything appearing on the checkout page that isn't "thanks, come again!" is likely to be something that's going to take time to do, cost them money, cause them to lose some of their privacy, receive junk mail, spam their friends, etc.
He'd probably be better off simply putting a message on the "transaction completed" screen simply asking them if they could do whatever it is he wants them to do.
That's not free money. That's a discount.
Hum, yes. But based on what you have to do to get it, it's pretty close, no?
I don't understand. Are you saying that it's "free money" because the discount is really easy to get?
If you control the message that goes with sharing such a link, that can be a deterrent. For example, even when I would have liked to share some Appsumo deals on Twitter I didn't because their own tweet link always has some really spammy annoying message, which you can't edit.
The other possibility is that you didn't have enough users to convert any.
The other possibility is that you didn't have enough users to convert any.
There were plenty of people paying the $29 price. And not one of them chose to pay $27 instead. I would have expected maybe half to do so. Maybe 20%. But none?
I wouldn't have either, not even if you gave the product away for free in return.
To me, spamming people that chose to listen to me on whatever site or medium seems like an egregious violation of trust. If I link to or recommend something, I want that to be meaningful.
I'll do it gladly if I like your product, but not because you've bought me for a couple cents.
To me, spamming people that chose to listen to me on whatever site or medium seems like an egregious violation of trust. If I link to or recommend something, I want that to be meaningful.
I'll do it gladly if I like your product, but not because you've bought me for a couple cents.
Founders (your audience) may be extremely wary about their "social media" image, and reluctant to advertise other businesses in the same space. Plus the value of finding a good co-founder greatly exceeds $29. Not to mention that many are selfish pricks like me and dont follow the "average person"'s behaviour. The fact that you got this to the frontpage of HN is far better than a few tweets.
On second thought, your $2 discount is very small too. Maybe if you discounted 50% it would work.
On second thought, your $2 discount is very small too. Maybe if you discounted 50% it would work.
At what point in using the service is the $30 fee required? I would be even more hesitant to spam my friends if I hadn't been using the system for a while and been convinced of its efficacy.
Interesting display of economics at work here. For whatever demographic your product caters to, they seem to be saying their social media interactions are worth more than $2. Considering absolutely none of them took the offer, I'm assuming the average value they put on it is much higher. Regardless, I'm sure there's a price point where you could get a decent number to take the offer.
Is there anyway you can make your product more useful for your users if their friends join too ?
Easier said than done, I know... but this is maybe the only way to generate more sharing.
Do I jump through hoops for $2? Nope.
Would I share something useful/cool with my friends for free? Yes.
Would I bother to prove I had shared with my friends for $2? Probably not.