On Thursday I wrote about TripAlertz, a hotel package deal site that was paying way too much for e-mail addresses.
Most referral deals require that the person being referred actually buy something before the website will reward the referrer. Not TripAlertz. They were paying for every email address that signed up, and the signup process was really easy, all it took was an email address and a password — not even a name. And they were paying the referrer $10 per email address.
Surely that couldn’t last. And it didn’t. Already they’ve dropped their referral fee down to $1.
What’s more they’ve changed the terms and conditions of the program and are applying the change retroactively — instead of having two years to redeem the referral cash, you now only have one year to redeem it. They’re literally halving the expiration period.
Of course they are. They need more breakage. They need the cash to expire. Surely they didn’t anticipate going viral this way.
Presumably they figured that since customers could only use the referral cash on hotel packages, not standard bookings, their high margins on the packages would mean they’d come out ahead. Someone might refer 10 people, those people might never buy anythnig, but the referrer would only be getting $100 off a package. It’s really quite common for sites to offer big coupons like $100 off on a 3- or 4-night minimuim stay.
Instead of a coupon, TripAlertz got email addresses of friends. That seemed like a better idea.
And then the thing went viral, not just on blogs like Frugal Travel Guy, The Points Guy, and Deals We Like, but also on Twitter and Facebook. TripAlertz found itself in a position of paying out real money for referred email addresses of modest value at best, no longer a good value proposition.