In India what would be some good ways to get lets say 1 million members signed up. What you are becoming a member for is important but lets assume that the value proposition makes sense.
Initially if say for the first 10000 members sign up is free. Then membership costs Rs 99/-. A member gets Rs. 50 for every member that they refer. Thus early members could make significant amounts of referral income.
This kindof program would require around 5 lacs or Rs 500,000 of capital. After that Rs 49 per member would be available so you could acquire a million members for a relatively low cost. There may be other costs related to processing of member acquisition etc. To cover those the Rs 49 would provide approx 4.9 crores. If the other costs were say 10 crores then the net cost of acquiring a million members would be Rs 50 per member which could be worth it if network effects under Metcalfe’s law kick in.
What do people think. Is 10000 free memberships the right number. Do Rs 50 as referral fee and Rs. 99 as membership fee seem like good numbers.
Do others have any other suggestions on building critical mass. Are there are any examples of successful member get member schemes in India which are just referral based and not MLM ( multi level marketing) like Amway or Oriflame ?
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IMHO India is not yet ready for paid subscription or usage – can’t be witnessed more than from the fact that the net usage by far the highest from office i.e. free. Given that, payment (however small it may be) is very tough – unless there is a very compulsive reason.
50 for 99 might categorize you with none other than MLM, seriously impacting your credibility. Also the nuisance value of MLMs might rub you off on the wrong way.
The financials look quite good. Some of my thoughts on this:
1. The first 10,000 would be easier (provided some value gained to user). The challenge would be next paid Rs. 99 users. In India I have only witnessed such participation for “free” subscriptions.
2. Don’t have the numbers but in Indian scenario the delta of value provided that is Rs. 99 and the benefits (a or b) achieved is much higher.
Outside India user benefit-> Rs. 99 X a
India user benefit-> Rs. 99 X b
I think b >>> a to get this going.
3. Also 50 % of referral fee looks quite high to me.
4. I would concentrate on “b” to get this going. Beleive me pal its a tough task to get subscription from Indian users specially on the Web.
Best of luck.
Sanjay G
Its interesting that so far, I am yet to see “viral” marketing in India — almost all the internet brands have been built on top of raw advertising. From what I have seen around, following might be the key:
– A very differentiated benefit — this has to be really significant, at least at perceptual level. Both to trigger a referral, and for the referral to get accepted. Simple communication.
– Sharp target — when i get a mail prompting me to refer, I should see it and say “bang! sanjay will love this” — inspiring that reaction might be far more useful than the monetary benefit (very different from MLM — i would liken that more to affiliate marketing in the sense of being purely incentive driven)
– Then there is this issue of whether the population is viral at all, identifying the mavens and sneezers — I think this might be the part that has been weak, because the gap in viral marketing out here seems to be across campaigns and categories.
I have thought about this model earlier for India, considering the potential of a huge network. I remember paypal very successfully using this strategy. In general a lot of banks regularly use this strategy (notably ING direct recently). I think in Indian context it will very interesting tactic for consumer focused mobile marketing.
Slightly tangential but similar philosophy – Indian IT firms using employee referral scheme
Amar
My only suggestion is to reduce the referral kickback. It is too much. I am basing this on my past experience with a very successful referrer model launched by a pro photography site called smugmug.com.
They started with $99 for a pro account when their business started and offered a $5 kickback for each extra person a subscriber brings in. $99 was an annual fee – not sure if your Rs 99 is annual or lifetime. One of the best ways to expand to your million is to add a monetary incentive for the subscriber and you. In Smugmug’s case, the $5 kickback is not offered in cash – it applies to $5 off for your next year’s subscription – this ensures that the person buys next yr’s fee at a discount thereby increasing customer stickiness for the site too (if you gave Rs 50 in cash back, it can be used for other purchases and may not funnel into renenwal of your own site subscription).
Finally, this year, smugmug increased their annual fee from $99 to $140, but agreed to ‘grandfather’ their existing customers – if they signed up for the next year by Jan 21 2006, their old rate of $99 would remain as long as possible (no legal commitments, just goodwill).
Again, as you mentioned, all of this totally depends on the content of your site. if it is just a general social networking site, it may not warrant this value.
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-cr