In Friends We Trust? The Trouble with Incentivizing Friendommendations

There are many new marketing technologies available now and on the horizon. These are innovative, powerful and easily-adopted tools that businesses are using in their current strategies to pursue their goals.

With social community activity a huge focus, and word-of-mouth advertising being how we are influenced to buy (primarily at the consumer level), many of these marketing tech firms are deploying reward-based tools to drive business.

For example, let's say your friend Josh raves about a local seafood restaurant on his Facebook page or via twitter. His friends and/or followers respond accordingly because they trust Josh. They know he's discriminating, especially when it comes to fish. In their minds, they give that restaurant a mental check mark in the "must visit" column.

Enter marketing tech solution: a company that helps the seafood restaurant market to prospective customers by rewarding existing customers with cash, discounts, or other incentives, to "socialize" their restaurant. Josh's friend Mary, who participates in this program, is constantly going around to restaurants, salons, and other businesses who partake in rewards-based marketing gathering and posting raves, comments and stories about each business to her network. She likes the money and rewards she gets, and feels she's doing her friends a favor by pre-screening these businesses.

Over time, Mary's network senses that Mary's working them. What slowly happens is that the trust factor degrades and loses its potency. Suddenly, this intangible, indirect social marketing tactic no longer has the ability to drive new business like it once did. People become wary, cynical, and mistrustful of what their friends are recommending because the recommendations are incentivized instead of genuine.

Now, I don't want to be all, "Oh, it'll never work," because it's working right now and businesses are getting moderate results from it. But what I do want to offer is, how can we be more genuine in our approach to selling and promoting what we're about? That is where the magic is. An organization's ability to have relationships that are open, trustworthy and appreciative with prospective and existing customers as well as the community at large relies heavily on being genuine and having authentic relationships that flow both ways, naturally.

New marketing isn't about how to capitalize on the trust between friends. New marketing is how do we remove the barriers of communication and connect people to what they really want? We do that by asking, and then implementing what we learn in how we market and promote our goodies.

Creating raving fans of your customers is necessary today. Creating avenues for them to refer you is even more important. And respecting their relationships with their networks is vital to the integrity of your business and of your brand.

Terry Pappy

Orlando, FL 32814