Don’t Be Confused About 3 Degree Customer Acquisition Strategy

There are many ways to market a business some more unique than others. Some methods are less popular than others. Don’t be confused about any of them get the facts.

Recently this strategy was mentioned at a recent marketing event Ad Tech in NYC. It is called 3 Degrees of Separation Customer Acquisition Strategy and essentially it is a referral network strategy that allows regular ordinary people to earn something like money, points or whatever will be offered as a benefit to a consumer by a company who might be willing to adopt this strategy to build their business.

It seems there has been some confusion with this strategy so I want to clear some things up first.
Let’s talk about two other so-called strategies that have a negative connotation. As a consumer you need to be educated if this is of interest to you so you can identify the differences.

Mutli-Level Marketing (MLM)
These type of plan are designed specifically to entice sales folks to bring in as many customers as they can in order to generate revenue for themselves. These sales folks are primarily paid on the basis of a commission. Hence their primary goal is to bring in as many customers as they can and under their “wing”. However, since the company does not attach a particular product or service to the entire package means that it can be unethical and disliked by many and watched closely by the FTC and are quite often scams.

Pyramid Schemes
This type of “plan,” if you will, is one in which new members are recruited with a business plan that looks to have a lucrative payoff. The idea is the bring in subsequent tiers of recruits have to “pay” their way in and a percentage of that payment will be passed to preceding members. It’s a pattern that only benefits those at the top of this “pyramid” and the stream is endless, in addition there is often NO sale or any tangible objects for sale.

These are 2 very distinct strategies that are often referred to as “get rich quick” schemes. Now let’s compare:

3 Degrees of Separation Customer Acquisition Strategy
This strategy allows businesses to acquire customers through incentives made available to friends and family and distributed through social networks. These strategies strongly advocates customer loyalty, and trust with consumers and ensures that the means of acquiring new customers is primarily to offer a value or benefit to that customer. Companies wishing to adopt this strategy would offer models that include gift cards, points cards, club cards, cash rewards, shopping credits, gift certificates, prizes and more.

As you can see the 3 are very different so don’t be confused make sure you get the facts.

Learn more about how the 3 degrees of separation customer acquisition strategy can benefit your company.

Learn about 3 Degrees of Separation here.

What is 3 Degrees of Separation Customer Acquisition Strategy

With the advent of social networking websites and the phenomenal advancements in global communication, organizations have been forced to change the way that they conduct business. This change has particularly been more marked in regards to the way that companies market themselves and their products in order to attract customers. Consequently the 3 degrees of separation acquisition strategy is primarily a business tactic that has been specifically designed to incorporate the advantages provided by new global communication.

It basically involves attracting customers by offering numerous incentives as well as exploiting the vast network of friends, colleagues and relatives that each customer possesses. Essentially each person is connected to somebody else through a mutual friend or acquaintance. The degrees of separation can be expanded to about six levels. However when it comes to business the 3 degree separation acquisition is more appropriate as well as adopting an adequately conservative approach. Basically the exploitation of social networks for marketing purposes has become easier and more convenient to accomplish because of social networking websites such as Facebook, Linkedin and Twitter.

3 degrees of separation involves initiating programs that promote customer loyalty. Such programs can be based upon offerings such as regular rewards and incentives distributed amongst one’s customer base. On the other hand, some companies have also formulated successful models incorporating gift cards, club cards, shop discount cards, hotel and flight rewards as well as gift certificates. All of these factors can help an organization attract, maintain and nurture a loyal customer base that will keep the company ahead of its competitors while also sustaining profitability.

The basic step in the 3 degree separation acquisition strategy involves offering a product to customers that will provide them with a benefit. The company will then setup an initial target customer base. Each customer within the initial list will contribute his or her social network. Upon each successful referral, a particular customer will get an incentive such as those that have been mentioned previously. A social network aggregator is used that allows extensive participation as well as keeping the entire 3 degree separation program within one’s particular network. The idea is to keep the number of separation levels to a minimum of 3 because the network starts losing strength as the number of levels increase.

The model basically assumes certain activation or successful referral rate as well as a specific network size at a particular degree. As the degree level moves from 1 to 3, the size of the network increases as well as the number of successful activations. This inherently means that the value of the total incentives gained by an individual customer increases.

However, it is wise to remember that this model is strictly theoretical. In practical terms, one has to keep in mind various factors such as differing behavior and perception of consumers.

What is Three (3) Degrees of Separation?

Most people have heard of the 6 degrees of separation. The six degree separation theory basically states that each person can be connected to every other person in the world through six interpersonal links as stated in wiki. But what is 3 degrees of separation? It seems that various theories have since been developed in accordance with the basic six degrees philosophy.

Recent research conducted by various mobile communication organizations has lead to results stipulating that the six degree of separation theory is no longer applicable. In fact, the advancements in global communication services such as email as well as mobile phones have further reduced the world in terms of interpersonal links and connections. The latest theory now constitutes that each person can be connected to some other person in the world through three degrees of separation. Pretty amazing stuff!

Basically social networking and telecommunication services have brought people closer together. Particularly in terms of finding other people who have interests that match with one’s own activities and hobbies. Specific research that was conducted involved respondents to attempt to make contact with individuals half way across the world. The respondents were than able to use their shared network in regards to interests and hobbies in order to limit the connection between 3 degree levels. Basically the main promulgators of the reduction in interpersonal links have been social networking on websites such as Linkedin, Facebook as well as Twitter.

Telecommunication advancements have just made it very easy for people to remain in touch with each other. However, the main communicative stage has been provided by the spur in social networking. This particular theory as well as its predecessor philosophy of six degrees of separation has become adaptable in ways that make them extremely useful for organizations looking to create, maintain as well as enhance their customer base. Each potential customer now represents a vast network of prospective customers that have not yet been exploited.

Various companies have attempted to devise marketing strategies in order to align the three degrees separation theory with their marketing campaigns. For example companies can offer rewards and incentives to customers who initiate successful referrals to their business thus allowing organizations to make use of socially connected individuals as a means of growing their customer base and increase customer retention and loyalty.