Compensated Word of Mouth

Ultimately, if The Polymath is to succeed, we must motivate about 4% of the people to refer it to their contacts.  These people will represent the Pareto of virality.  In order to do this, we are creating a fair and honest compensation program for those who create the virality.  Please consider participating.

We are encouraging people who subscribe to The Polymath to encourage their social media contacts to subscribe as well.  While some readers will do so naturally in a desire to share an interesting article, that will not be enough.  So, to this end, we are creating a compensated word of mouth program.  If a person that you refer to the Polymath decides to subscribe and then, later, either joins the Polymathica Enterprise Network(PEN) or buys prepaid ads, we will give you, via PayPal, a 15% referral fee.

You must be a subscriber to The Polymath in order to participate and we will soon require all people who subscribe to be referred by a subscriber.  We want those who refer their contacts to The Polymath to honestly believe in it.  Subscription is free, so you are not selling anything.  You are simply letting your contacts know about interesting and thought provoking articles.

As with all word of mouth, if one referrer creates more than one referrer then growth is exponential to market saturation.  However, we know, by applying Pareto Principle or 80-20 rule that over 80%^3=51.2% of referrals will come from just 20%^3=0.8% of the subscribers.  So, there is two things to learn from this.  First, in order to go viral, each CWoM participant must create (1/.08)=120 subscribers.  Fortunately, we know from experience that it is a reasonable number.  Second, we understand that creating 120 subscribers requires commitment.  So, we should compensate them.

If we extend Pareto, we see that if 1,000 viewers create 2,000 new viewers, referrals will look like this
40% will not refer                                                  0

40% will send to one person =                      400
16% will refer to an average of 2 =               320

3.2% will refer an average of 8=                    256
0.8% will refer an average of 128=           1,024
    Total new views                                           2,000

Generation                        New                    Adds                         Total   
F0                                           1,000               2,000                       3,000         
F1                                            2,000              4,000                       7,000 
F2                                            4,000              8,000                    15,000
F3                                            8,000            16,000                    31,000
F4                                          16,000            32,000                   63,000
F5                                          32,000            64,000                 127,000
F6                                          64,000          128,000                255,000
F7                                         128,000         256,000                 511,000
F8                                        256,000          512,000            1,023,000
F9                                         512,000      1,024,000           2,047,000
F10                                  1,024,000      2,046,000           4,095,000
F11                                   2,048,000     4,096,000            8,191,000
F12                                  4,096,000      8,192,000          16,287,000
As impressive as the page views number is, at best, we might expect 16,287,000 X 7% = 1,140,090 subscribers.  However, this, is an uncompensated word of mouth campaign and even with as little as 0.8% choosing to dedicate some significant effort to creating word of mouth, the above calculation is very unlikely.  Most likely, the function will be convergent and each generation will add fewer than the last.

However, the calculations are different for a compensated word of mouth campaign.  The assumptions are that the compensated people will average a 'reach' of 2,000.  In other words, over a period of repeated exposures, between friends and friends of friends, about 2,000 people will see the link to at least one article.  From experience, we know that, over time, 7% of their reach will subscribe or 140 given that they are mostly in the top 5% of the population in intellectual sophistication.  Also, over time, 5 of those 140 subscribers will choose to do compensated word of mouth.  We will disregard the other 1,995 viewers, though, in reality, they will most likely create a non-trivial number of 'free' subscriptions.

The calculations now look like this.

Generation                      New CWoM           Adds             New Subs           Total Subs
F0 (Michael Ferguson)       8                        1,120                  1,120                       1,120
F1                                                 8                             40                 5,600                      6,720
F2                                              40                          200              28,000                   34,720
F3                                            200                      1,000             140,000                174,720
F4                                        1,000                      5,000            700,000                874,720
F5                                        5,000                   25,000           3,500,00             4,374,720

This means that The Polymath can reach market saturation within five generations.  If, as appears to be the case, the mean subscription is 4.2 weeks after the CWoM join, five generations is about five months. 

The question is, 'What can be offered that will entice 5/2,000=0.25% of viewers to put forth eight hours, or so, to get the 140 subscribers that are implicit in their reach?' Our answer is referral fees on PEN Members and Crowdfunders who purchase a 'forever footer ad'.  This potentially will not be an insignificant amount.  Our experience is that 3% of subscribers become PEN members.  So, that PEN Member referral fee is estimated at 140x3%x$90=$378.  Our experience is that 140x5%x$50x15%=$105 will be raised from prepaid footer ads.  ($378+$105)/8=$60.38 per hour expended.  That seems fair.

Some people, especially those with large reach or a blog or newsletter that is read by a large number of intellectually sophisticated people, will get much larger referral fees.  In fact, a subscription box with nice verbiage could outperform most other affiliate style advertising opportunities. This is also why we are promoting Leonardo blogs.  The Polymath enables Leonardo and Leonardo enables The Polymath.   

So, the Compensated Word of Mouth program (CWoM) works like this.  A participant will send a blank email to
from the address that is payable (used for PayPal, etc.). A unique referral number will be returned.
CWoM participants will, first, notify their warm market about The Polymath generally by informing them that they have subscribed and encourage them to subscribe.  After that, at an interval of about one week, they will post a link to another article and again encourage subscription. 

In addition to the current articles and pages, these articles are scheduled for early publication.

  1. Internet TV, yet again
  2. Paleosociology and The Trophy Wife
  3. Cryptocurrency v Virtual Money
  4. Rise of the Microstate
  5. The Death of Capitalism
  6. If Not The Singularity, What?
As we recruit Leonardo participants, other articles from them will be added to the list.

At regular intervals, The Polymath will send a list of subscribers with their referral code.

If The Polymath decides at a future date to undertake an equity crowdfunding effort, CWoM participants will receive 10% of the total contributed by subscribers with their referral code.  So, to summarize, CWoM participants will receive
1) $15 for every $50 Prepaid Footer Ad increment
2) $90 for every referent who joins the Polymathica Enterprise Network
3) 10% of investments by referent in any future Equity Crowdfunding.

Referrers will not be involved in any of these fundraising efforts or PEN recruiting.  Their sole responsibility is to acquire subscribers.  The Polymath will prompt subscribers regularly to consider participating in these.  All the referrer needs to do is promote the free subscription to The Polymath.

To summarize, send a blank e-mail using the email to which you want your payments sent to  Your referral number will be sent back to you along with subscription links.

Every CWoM participant will have a somewhat different structure to their warm market.  Some may work primarily with Facebook.  Others may work mostly with Google+, LinkedIn, Twitter, etc.  Several current subscribers spend most of their social media time on bulletin boards.  Participants may email to their email lists or simply place the link in their signature.  If you have an appropriate blog, you can place a sign up there.

Payments will be sent via PayPal to the address provided at the same time that the new PEN member or crowdfunder is processed.

This process is simple, compensates you more than adequately for your effort and has the potential to provide The Polymath with explosive growth in circulation.


No comments:

Post a Comment