Ubers new referral program is incentivising users to invite their friends who haven’t used Uber in the last 6 months.
What’s the motivation here ?
Given the TG is inactive users in the last 6 month, the goal seems to be to reactivate churned users using incentives and friends as a medium to push that incentive.
Why does it not make sense ?
As a user I don’t keep a track on which friends use Uber and when was the last time they ever used an Uber. So knowing who amongst my friends has not used an Uber in the last 6 months is largely an unknown.
So as a user I am left with two choices because I feel this is spammy.
Send it to all my friends and hope someone hasn’t taken a ride for 6 months.
Or don’t participate in this program at all.
(It’s a different story when Uber first came out and I sent Uber invites to everyone because it was cool and new and I wanted to show that I was cool and smart to use a service like Uber.)
Should I participate, the incentive to further participate is increased only when I see some evidence that I am earning something. In this case the odds are unclear and if I don’t get any immediate gratification my incentive to share drastically reduces.
Net net I hypothesise this may not necessarily be a very effective reactivation program guised as a referral program.
That said reactivation problems are some of the hardest growth problems as you are limited in your lines of communications as well as cost effectiveness to reach out to churned users and activate them once again.
The number of avenues you have to reach out to churned users is drastically low.
Emails as is have very low open rates. For Churned users this will be dramatically lower.
Churned users may have uninstalled the apps therein making push notifs not usable.
Targeted perf marketing is possible, but comes at a cost. It's almost like reacquiring the user once again.
Any other form of media is too broad based making it ineffective.
So challenges like this is what forces a company to explore options such as using referrals and friends as a possible medium to push campaigns to bring back users.
Also a pure a temporal discount led win back campaign really doesn't structurally attack the many reasons why a user may have churned:
1. If a price sensitive user has churned, getting two rides of at 30% is not going to make me shift behaviour, when the newer alternative is consistently cheaper for all rides.
2. If a user has churned because of non-availability/cancellations of Ubers, a discount is not guaranteeing that problem has been solved as it is not focusing on building confidence that there is more Ubers available with reasonable ETAs and no cancellations.
3. If a user has churned due to poor quality service such as driver/cab quality etc, this discount doesn't address those issues head on.
So the value prop to win back users is also not very strong & targeted.
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This post was originally shared by Deepak Krishnan on Linkedin.