A couple weeks ago I wrote a post called Selling sunrise. The gist of it was that no matter how great your product is, it will live or die based on how well it is marketed. Whether you’re selling soap, or sliced bread, or sunrise – if people don’t understand how your product will improve their lives, they’re not going to use it.

Here’s a good example. After watching the most recent Spokesmonster cartoon, which deals with referral fees (a feature that’s still in development), a guy named Doug made the following comment:

That is a terrible business model. $100 for a referral. As an interior painter I would not pay $10 for a customer referral until I have been paid by that customer.

Doug’s right – $100 for a referral is a lousy deal if you don’t get a guaranteed sale out of it. That’s why with StepRep you don’t pay a dime unless you complete a transaction.

This is hugely important, and I guess the point wasn’t made clearly enough in the cartoon – anyway, not clearly enough for Doug. Let me run through how the referral model will work.

1) You don’t have to offer a referral fee if you don’t want to. You can just use StepRep to monitor and manage your online reputation – for free – and ignore all the extra features.

2) You set the amount of the referral fee. We don’t know how big your business is. You could be peddling fifty-cent shoelaces or million-dollar yachts. Only you know how large a fee you’re prepared to offer.

3) The fee is split 50/50 between the new customer and the referring customer. That’s why I worry that the term “referral fee” might be confusing (and if you have a better phrase, get in touch with me). Really what you’re offering is a referral fee plus a discount.

–and most importantly–

4) You don’t pay a dime unless you make an actual sale. It doesn’t cost you anything to offer a referral fee, and if no-one takes you up on the offer, that’s okay, you can just go on promoting your business the old-fashioned way – radio ads, coupons in the mail, paying some kid to dress up as a giant cheeseburger and stand on the street corner waving.

The referral fees won’t be coming along for another few months. Hopefully by the time this feature is ready, we’ll have a better sense of how to get the idea across to new users. Meanwhile, thanks for the feedback, Doug.

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