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We recently launched our word of mouth advertising startup, www.boostria.com. We want to rapidly grow our user base to mature our system. But it takes lots of time/effort to sign new users. So, my question is:

Is it a good idea to pay users to sign up to my service? What are the pros/cons?

Thanks James

11/13, I add my responses to Clint' answer here because it is too long for the comment

Clint,

Thank you for the input. I would like to response with 3 points

  1. Maybe the "word of mouth advertising" slogan is misleading, but, we help to boost businesses with short stories; we encourage people to write an interesting story, rather than a personal review. Take one of our advertise laterdog.com as an example, one booster signed up as "a dog", and speak her boosting message like this "So, my owners were going on a vacation. They had no idea what to do with me, so they went to www.laterdog.com. It changes you, man. I'm a whole new Labrador.". This is really nothing different from a actor doing a commercial on TV, right?

  2. I agree with you on "don't sell out to your F&F", so we don't publish stories into users' Facebook, Twitter, other social network account. Instead, you publish stories into opt-in publishing sites like Google AdSense did. So the scenario of "selling to your family and friends" does not exist.

  3. Lastly, I believe that Word of Mouth (WOM) is about transparency. So we mark every sponsored boosting clearly with "sponsored by..." label. It is up to the users to decide whether the story is interesting enough so they want to click the site to learn more.

Does this make better sense?

James

11/13, James added our demo site http://boostria.blogspot.com

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I like it, but not the CSS 100% wide layout. I would use a max width property to make sure the site doesnt look odd on monitors that have very high resolution. The only time i think a 100% layout is acceptable is when you are on an app dashboard or a scenario like google maps. As for your paying users to sign up? I think you have that covered with the $10 credit? – Frank Nov 12 '10 at 22:17
Thank you for the input, Franky. Yeah, I personally don't favor the current site layout either. We may need a UI person to review the site later… If you know anyone really good, let us know. Appreciate it! We beta launched at September. Our user base is growing, but not fast enough. Maybe we should be a little more patient, but you know, the “grow 10,000 users over 2 weeks” kind of stories make us keep questioning ourselves: Are we doing a right thing? – James Chen Nov 13 '10 at 1:27

2 Answers

up vote 1 down vote

Are you referring to paying users to write stories? Or paying advertisers to post opportunities?

In terms of the former, giving some form of incentive, whether cash or some piece of merchandise might be a good way to get people on the site. Since people are paid for the actual writing they do (though you might want to show how much that could be per click), you probably don't want to pay for the writing itself. So a better approach might be to say that the first 100 people to write an article/boost will get a gift card, or a t-shirt, or whatever.

In terms of the advertisers, you don't really want to pay directly, though you may want to consider giving reduced rates on the first 100 advertisements , which you seem to be doing already.

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Thank you, Elie. This is what I thought. But it doesn't seem to work too well so far. So I think I may missed something... – James Chen Nov 13 '10 at 0:47
up vote 1 down vote

Paying for word of mouth is a bad business model!

Read Word of Mouth Marketing by Andy Sernovitz and you will know why.

Joel Spolsky, the founder of this very site's software, has stated publicly that paying people as a motivator doesn't work. Do a Google search for specifics.

Word of mouth is organic. You spread the word to your friends and family (F&F) because you honestly feel some product or service gave you value and can benefit them as well.

Ask yourself, would you recommend something to your close F&F just because you were paid to do so? I wouldn't. First, if I recommended a bad service (because I didn't use and vet it first), it could impact my reputation. Second, if my F&F found out I was getting paid, they would label me as a sell out (i.e. trying to capitalize on them).

Word of mouth occurs natually when you provide value to your customers (i.e. they get more than they feel they paid for).

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Clint, thank you for the input. I updated the question with my response. Please let me if this make better sense. – James Chen Nov 13 '10 at 22:51
That makes more sense. So it's like sponsored WOM marketing. I think #3, transparency, is very important. Having a second look at your site, I'm still a little confused. I'm not sure who writes the stories, why they write them, and where they get published. I'm a business owner that uses online advertising, but I'm not sure I see the the value in your service. I think adding a case study would help significantly. A prospect should be able to know exactly what you do after staring at your homepage for 3-5 seconds; I can't do that. Ask 30+ others if they can. If they can't, you have work to do. – Clint Nov 14 '10 at 0:11
Client, We will update our home page soon, but some quick answers: Who write stories and why? Anyone can do. A creative writer can get good reward (social recognition, fun, and real cash, …) Where they get published? Content website (blogs, news). The publisher opt in our service like they did for Google AdSense In terms of what value our service can bring, did you check our demo site boostria.blogspot.com? You can see some live boosting stories there, some of them are sponsored.Move your mouse around to see how interactive they are. – James Chen Nov 14 '10 at 2:21

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