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Working on a Referral Pre-Launch Site

Published: March 31, 2017 (about 2 months ago)

Since I’m at zero followers, I’m crafting a plan to bring in as many emails as possible in a week’s time so I’m not “launching to crickets” as the Harry’s founders phrased it. What Harry’s did was nothing short of remarkable. They acquired more than 100,000 email addresses in seven days on a referral campaign where they awarded products to those who participated. The more referrals a person garnered, the greater the reward. If you’re interested in the whole story, check it out here.

I was so impressed with how they ran their campaign, I decided to follow in their footsteps. Since they released their code as open source, I was able to fork it and quickly make changes in preparation to launch my own campaign.

I was close enough I could launch, but then I thought, “what’s this going to cost me?” – not having any real numbers to go by, I borrowed the ones reported in Tim Ferris’ article and assumed I could match their 100k emails feat. Hoo boy. Had I launched as-is, I could’ve quickly found myself bankrupted to the tune of $48,000. Needless to say, I needed to really think through the rewards and decide how I was going to handle this aspect of the campaign.

I was incorrectly assuming that because my cost for acquiring the freebies to give away were low that the overall cost was going to be low for the campaign, so I was simply giving away the farm, so to speak. The original list went like this:

  • Tier 1 (5 referrals): 3 overgrips
  • Tier 2 (10 referrals): 2 months supply overgrips
  • Tier 3 (25 referrals): 1 pair of premium tennis socks
  • Tier 4 (50 referrals): 2 pairs of premium tennis socks
  • Tier 5 (99+ referrals): sweepstakes to win a in/out electronic line caller device

That would’ve set me back $48k in month one. So, the first thing I thought about was to simply carry the overgrips award forward to tiers 3 and 4 and lose the socks. Changing the type of reward halfway up seemed odd anyway. I took my cue from the “2 months supply overgrips” and extended that to 6 months and 12 months for tiers 3 and 4. That at least spreads the costs out over an entire year and reduces my first two months’ costs to $6200 and $3100 respectively.

Month one is a killer, but Month 2 is pretty respectable, especially if I have my online store up and running by then and making sales to all the rest of the subscribers. Even if only 1% of the total subscriber based ordered just 3 overgrips for the month, the net revenue would be a wash for month 2.

So now I’m faced with having to answer the questions:

  1. Is the app forever free?
  2. If free, is there an ad supported model or will in-app purchases from the store fully sustain the app?

If the app is not free, then offering access to the app for free would be a great Tier 1 reward and reduce month one’s expect by half. If the app is free, then I’m faced with the dilemma of how to cover my costs for the first two months just to run this referral campaign.

Tough choices ahead. Stay tuned!

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