Once upon a time (years ago, pre-Corona and the UK was still part of the EU) I – might it be through sheer luck or just plain boldness (I can never tell those two apart) – I became VP of Growth of a Debit-Card-Fintech in London. They went through a few CMOs before me. I refused to become the new CMO, but VP Growth, pushing user and revenue growth through technology and data-insights, deeply ingrained into the product-flow, count me in.

Soon after I arrived, I realized there was no process for me to get developer resources as the previous CMOs did not care about it, and establishing this process would take some time. And even when I finally get the dev ressources, first they would have to work on integrations, before I could do the cool things. (We finally got there.) But old and eager, I wanted to make an impact now. But had to work outside the product. And without dev resources for now.

As throwing even more money into the pits of Google- and Facebook-Insta-Ads was not my thing (ADS ARE A TRAP, also here), I invented the double sided viral referral raffle. (Think it didn’t exist before. At least I did not know of it. As with all good ideas, I came up with it in the bathtub late at night.)

Note: One product prerequisite that you need for this is a working user to user referral system. Where 1 user can refer another user for sign up via referral-sign-up-links. And the system knows which user was referred via which user. 

What is a raffle?

What is a double sided viral referral raffle?

  • First you need a price. But you need 2 of them. A highly desirable price, we choose 2 IphoneX Pro, the best and newest phone on the market at this time. 
  • Second you send out an email to all users / leads (that signed up for marketing emails) for the “giveaway competition”. Actually it’s a raffle, but don’t use that word. 
  • To enter the “giveaway competition” the users need to refer other users via their referral-sign-up-link. 

Let’s call the referring user, the one who sends the link to a friend, the referring user, R

The referred user that uses the referral-sign-up-link. we call: new referred user, NR.

  • R sends a link to the future NR°, which uses the link to sign up. 
  • R is now in the raffle. 1 time. R now has 1 ticket in the raffle. NR° is the ticket in the raffle for R
  • The more often R sends out the links, and the more often the friends become NRs, the more tickets R has. Every NR° is one ticket for R.
  • Who wins the iPhone? Actually, not R wins the iPhone, but one NR wins the iPhone, but R – who referred the NR – gets one, too. 
  • That’s why you need 2 iPhones.
  • So R has a very strong incentive to create as many as possible NR°s, as this improves R winning chances. 
  • Also R is doing the NR° something good, as they also have the chance to win an iPhone. So it’s a double sided incentive. “Good for me, good for my friend”

The viral aspect

  • Every NR° also gets a personalized referral-sign-up-link. Which they can send to their friends.
  • So the NR° (which is/has already 1 ticket) can create additional NRs. These NR’ are then new tickets in the raffle for the original NR° (which now actually is an NR and an R.)   
  • The winner is selected out of the total pool of NRs. If the R of the NR’ is also an NR°, then well, cool, but does not matter. Only the R of the NR gets a price, not the R of the R of the NR’. 

How did it perform

  • Even though we gave a way 2 iPhone, the total cost per user was way, way below the cost per user via the other channels at that time. Based on the metrics, the quality of the users was the same as from other channels.
  • The giveaway competition did run for only about 2 months, due to the length of the sign-up process we only managed to get a few rounds of virality, think we ended up at NR”, which was too low (for me.)

The hard parts

The terms of service TOS for the raffle. We wanted to run it in the whole of Europe / EU. This was not possible, we needed to cut quite a lot of countries. Explaining the concept in legal terms was a nightmare. Explaining it in legal terms for all countries where we did finally run it was near sisyphean. I planned for this step to take a few days. It took weeks.

Explaining the concept to the users. We tried to explain the concept to internal users before. It turned out that if we just market it as a “giveaway competition” and explain that the more you refer, the more likely you and 1 of your friends are to win is enough. Still we had to explain the concept to our power users, and to customer support. 

Was it cool?

Yes. I considered it as a cool hack, as other resources were not available.

Who am I?

My name is Franz Enzenhofer, I think and talk about stuff like that, a lot, mail me at fe (at) f19n dot com.

My Insta, my LinkedIn