Startup Idea #104: Powering viral distribution

The power of consumer voices on the Net is growing as sites like Tripadvisors are becoming important lead generators. A study conducted last October by comScore and The Kelsey Group of 2,078 respondents, including 508 who used online consumer reviews, found that online, consumer-created reviews have a big impact on prospective buyers. The study showed consumers were so trusting of online reviews, they were even willing to pay at least 20 percent, and up to 99 percent, more if a company was rated excellent or five-star than if a business received a good, or four-star, rating.























If consumer are becoming important viral channels, it make sense that companies will need new tools to help them engage with their customers. Hence, there is an opportunity for a platform play that decentralised companies' commission or referral fees and pass them to customers so that they can help market the services they love.

In the hotel industry, for example, hotels tend to pay out anywhere from 10-25% commissions on retail rates to 3rd parties and travel agents. A web based application can take these commissions and reward guests who have referred customers to them. This not only results in lower distribution costs, it also help companies to retain the customer relationship and also gain a lot more guests they want to attract, referred by trusted sources who’ve experienced the product and service.

How would this platform look like? I have a few possible scenarios:

The first scenario is for the more conservative companies. The platform can offer an online review form similar to reviewscale. Customers can fill the review form while the platform does the heavy lifting for embeddeding the referral fees mechanism into the reviews and distributing it to different sites.

A more decentralised approach is to have a plug-in extension where users can embedded the referral links within any reviews they have written anywhere, from review sites to their individual blogs and/or social networks. Skimlink has a nice example of how it could look like:

















If such a referral platform is in place, we can then see the blossoming of viral distribution. Just like how RSS liberates content from their destinations, we should also liberate referral fees and allow them to flow to consumers who are passionate about the products/services they love and will want to promote.

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