A New Way To Think About Bribery-Based Business Models

bribery based business modelsIt seems like every week, I hear about another start-up with a bribery-based business model. Some genius decided that they can pay people to visit their web site, and that this would somehow evolve into loyalty. But sure enough, a few months later, they all vanish just as quickly as they appeared.

The simple fact is that bribing customers works about as well as paying money for genuine friends.

If you’d asked me to help paint your house this weekend, I’d say yes because you’re my friend. But if you offered me $25 to come help you, I’d probably feel insulted and decline your request. By offering me money, you’d cheapened the experience for me… and possibly even insult me.

Author Ori Brafman wrote about this extensively in his book “Sway”.

In fact, even traditional raffles have lost their legitimacy over recent years, and are now more likely get your company flagged as a source of spam. If I showed you a banner that says Click here to win $1000, you’d probably think it was a scam.

On the other hand, if I were to display a banner with 3 photographs and the message “1 of these 3 gamers will win $1000. Help us decide”, you might be much more likely to participate…. but why?

At first, this would seem a bit counter-intuitive. If anything, the second banner should be even less persuasive than the first since you would have absolutely no chance at winning the prize money. (Even a minimal chance should seem better than no chance at all)

Last week, Big Brother Brazil set a new world record when over 155 million people voted to decide the show’s winner. That’s an astronomical number of people the going out of their way to perform a task which seemingly returns no tangible benefit to the voter.

What does this have to do with bribery-based business models? Although material rewards often have a counter-productive effect, it would seem that people DO respond well to other types or rewards such as respect, power and status.

Within even the kindest and most well-intentioned person, there is a petty, mischievous devil that enjoys having the power to anonymously reward, punish or otherwise objectify complete strangers. It’s one of life’s little forbidden pleasures. (See the Stanford Prison Experiment for a disturbing examples)

Also, despite being well-mannered and enlightened, we still have deep-down tribal tendencies that make us want to pick up pitchforks & torches and join the angry mob in driving a witch out of the village.

This tendency is partly why social sites like Digg, Reddit and HotOrNot.com are so addictive. They tap into a “pack mentality” instinct that’s hard-wired into our caveman brains.

When everyone gets to punish or reward their fellow community members, all involved parties get feeling like they have a stake in the success or failure of the community. This community interaction mechanism is so addictive that it’s been integrated into Ebay, Amazon, Elance and many ecommerce sites for customer engagement.

What if we could apply this “social justice” mechanism to a bribery-based business model? What if you were to award a prize every month, but let your community members decide who would get the prize?

Rather than award prizes based on some boring mechanical set of rules, you could pre-select a few special candidates and ask your community members to elect the winner of their choice.

    What if an artist supply site were to hold a monthly contest where registered users could vote on one of 5 user-submitted paintings… and the winner would get a gift certificate?
    What if a beauty salon were to hold a “most beautiful hair”  contest on their web site every month, where people had to vote on one of 3 customer hairstyles? In a geographically local community, this would certainly generate very powerful word of mouth as clients persuade their friends to vote for them.
    What if you could create a rivalry within your niche, where different groups would be forced to fight for your approval? For a biking web site, you could force the road cyclists and mountain bikers to prove why one group is better than the other.

This doesn’t have to be some elaborate custom-built PHP code. You can use Twitter, a simple online survey or any number of simple mechanisms. Just use your imagination.

How can you give your site visitors the ability to use a reward/punish mechanism to award prizes? Leave your comments below. I’d love to hear your ideas.

About The Guest Author: Paul Rudo has been a freelance business consultant for over 5 years. He specializes in B2B marketing for technology companies and organizations targeting geographically local clients.

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