Incentivize Users to Drive Traffic to Your Site

If you want to get a lot of cheap traffic to your site and quickly build up a user base, then incentivize users to spread the word and market your site for you.  Pyramid schemes work because users have strong incentive to attract more users.  While illegal and non-sustainable, they are still a good example of the how powerful it is to have your users work for you.  SEO traffic takes time to build and can rise and fall with competitor efforts and algorithm changes.  SEM traffic costs money for each user and grows linearly.  Word of mouth traffic grows exponentially.  Below are some examples of sites that have thrived from giving users incentive to spread the word and get their friends involved.

Groupon.com is a coupon site that offers one great deal per city per day.  The catch is that nobody gets the deal unless enough people claim it.  So if you log into the site and see a great deal that you want, then you have incentive to share it on facebook, twitter, email, etc to try to get more people to claim the deal so that the threshold will be met and you will get your coupon.  The very way the site works guarantees that users will spread the word.  This has lead to the site growing quickly and it seems like every week another Groupon clone is launched.  The downside to this strategy is that it’s easy to duplicate for new competitors; they just have to offer a better deal and get the first few users and then the deal will spread exponentially bringing users to the site.

Facebook Games tend to understand the importance of incentivizing users to encourage friends to join.  You make more money in Farm Town if you have others harvest your crops and plow your fields.  To get a larger farm, you must have 8 friends become your neighbors.  Family Feud gives you 5,000 points if you post your fast money on your wall or invite friends and at least one friend helps you to get over 200 points.  And even if you aren’t inviting friends, many of the games are constantly posting updates to your wall to broadcast how much fun you are having playing the game to your friends.

Notice in both of the above examples that you don’t HAVE to bring in other users to benefit from the service.  That is important, because if users get no utility from a service unless their friends join and participate then that severely limits the chances of the site taking off and the number of users who will use the service.  You don’t want a chicken and egg situation when trying to attract users to come to your site and actively participate.  Social networks both enjoy the benefits of user incentive to bring in friends and suffer from the chicken and egg problem.  The exponential growth possible is what led to the massiveness of the popular sites like MySpace and Facebook (now at 400 million users!), but there are dozens of failed networks that never got traction because users abandon the site if enough of their friends don’t join to give them utility.

There are also sites that do the opposite, and users are actually disincentivized to spread the word and bring more users because more users lessens their experience.  A new type of auction site has popped up where users buy bids for a price, say $0.60 each, and each bid on an item increases the item price by only $0.02.  So if an item starts at 2 cents and gets 200 bids, then it’ll be sold for $4.02.  The winner gets a great deal while the site got $0.60 * 200 = $120 for the bids.  The problem is that the incentives for the site and the users are directly opposite.  Users want less users on the site so they can buy the items for less bids and less money.  The site wants more users on the site so they get more money from lots of bids.  These sites can grow and be successful, but they’ll have to do it without the exponential growth from users spreading the word that sites like groupon enjoy.

When designing products or considering which of multiple ideas to pursue, ponder if there is a way to align user incentives with your own.  That is, see if you can make it beneficial to the users for them to drive traffic to your site.  The products or services that you can create that can do this may be able to take advantage of the growth that comes from users evangelizing your product, giving them a better chance of surviving and thriving.  You want your product to provide utility to users immediately, but provide even more utility as the user base grows.

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4 Responses to “Incentivize Users to Drive Traffic to Your Site”

  1. […] This post was mentioned on Twitter by Nicholas P. Nicholas P said: Incentivize Users to Drive Traffic to Your Site http://shar.es/mGzYd […]

  2. hi it is my first reply on this website and to start with I would like to thank you for the unique information, which I found in this and all previous topics , it really helped me a lot. I will definitely iclude this website on my rss reader 😉 Also, I would like to ask – don’t you mind if I will quate some information from your website because I am writing articles for the Hub pages, Ezine and other articles directories (this is my part time job)? It would really help me with some of mine articles. Of course, I will mention your blog title or URL (not all articles directories allows URL’s , so I can’t 100% promise that you will get a direct link to your blog).

  3. Nicholas says:

    Sure, you can quote my posts with attribution.

  4. […] clear.  I saw today on both Robert Scoble’s and Brad Feld’s blogs a video explaining incentives using whiteboard animations.  RSA Animate is a series of videos that you can find on YouTube that […]

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