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App Referral Strategy - Millions Paid

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AdamMaxum

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So I've been watching this company the last couple months and wondering what others feel about their marketing strategy.

It's a mobile app called Dosh - DOSH is a cash back app that finds you cash without the hassle - launched mid 2017.

They give you cashback on purchases. You sign up, connect a credit card and they automatically deposit cash back to your account if you shop or purchase from a store they're partnered with.

In early December, they started a referral program and it has caught fire. Refer a friend and they pay you $15 per new user joining. It has pretty much gone viral with people using it as a source of money.

If you check out their FB page you can see that all the comments are about the referrals and getting paid, literally, almost all of the comments. Nothing about the service itself.

They recently posted a video proudly exclaiming that they've paid out 15 million in referrals already in less than 60 days or so.

Obviously they're backed with investors, but can this strategy pay off long term?

Once the referral program gets cut down, so will the people promoting their company and using the app. Thoughts?
 

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dudewhat

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Sounds like Ebates.

I think basically they're selling all of your data and getting a kickback from their partners.
 

AdamMaxum

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Sounds like Ebates.

I think basically they're selling all of your data and getting a kickback from their partners.

Yea that's the concept. They partner with businesses and take a cut and probably sell your data to them.

If referral based cash marketing is guaranteed to generate new users - why wouldn't all companies use this strategy? Or at least those that have the funding to do so.
 

Genius01

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Obviously they're backed with investors, but can this strategy pay off long term?

Once the referral program gets cut down, so will the people promoting their company and using the app. Thoughts?
Not necessarily.
I think you can use any legal ethical means to gain traction, so far you have a good product.

Once traction has been gained, the momentum of people using your product can be enough to sustain it if its a good product.
If its a crappy product, its basically a waste of money, as ultimately people would abandon the product once the money spinning aspect is cut down.
But as long as its a good product, its a viable way to gain traction if you have the funds for it.

Elon Musk used the same exact strategy for PayPal- if you read his interview on PayPal's earliest days...they were literally paying people to signup and use the product....and ultimately it paid off in spades.
 

DanWasDrunk

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If referral based cash marketing is guaranteed to generate new users - why wouldn't all companies use this strategy? Or at least those that have the funding to do so.

Because it's not really value driven. See what I did there MJ?

If the product sucks, people will initially sign up for that free money, but then abandon it. And they'll play you. "Hey, sign up for this and we'll split the $15." You just paid them $15 and didn't really generate any new customers.

If the product is good, though, it could pay off. It will drive them to it, they'll check it out, and they'll stay.

Basically, it's like offering two free drinks at that comedy show. It's going to get people in the door, but if the show sucks, they're going to leave and not come back.

Now, in the meantime, while those people are sitting at the show, you can use that attendance number to land bigger deals or gain clout (which is what I'm thinking their strategy is here). Suddenly, you're a big promoter here. "Look at all these people I got to come! I can do that for your show too!"

But it won't transform a shitty product into a good one, and in the end, you might end up just tossing money out of the window of a speeding car all for nothing. Whereas, if you just tried to attract people organically, you would eventually figure out what is working and what is not. The cash thing can just screw up your target demographic because now you're getting anyone and everyone.
 

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