Risks and Rewards of an Invite-only Marketing Strategy

You must have heard of popular marketing strategy called “invite-only”. In this, new users can join your website only when they are invited by any current users on the site. It can be very risky as you are launching and not letting everyone use your product. Because you bet on people that they will remember you and come back later. This is generally done with a goal of getting early feedback to prepare for a later marketing launch. Some startups of the popular invite-only startups were Facebook which was limited to Harvard students only, Quora to influencers and Gmail. Till date, Dribbble and Behance are invite-only.

One such example is pinterest. When Pinterest was first getting started, it was invitation-only, but allowed users to request an invitation if they wanted to join. After requesting an invitation, Pinterest sent out an email to prospective users explaining that the waiting list was quite long, but that eventually, they would be accepted to join.

Not only internet based startup but also China-based Mobile Phone Company 1+1 had the same strategy to launch its product.

“The reason we created an invite-only system is that we want to control the risks the best we can, to control production, quality, quantity. It’s not like normal marketing; if you have a good product, you’ll want to introduce it to a friend. So the OnePlus 2 is like a product based on friends saying, ‘Come on, that’s good, go buy it.’ This approach throws tradition away.” told founder Pete Lau.

However invite-only strategy doesn’t work all the time. Simply put, an invite-only strategy is a “double-edged sword. With many benefits, it also comes with disadvantages and could backfire if not done properly.

Advantages of invite-only Marketing strategy

There are many benefits of launching an invite-only startup. The Main being that it makes your startup to brand as exclusive, top quality, private, etc. This makes the users feel that they’re a part of something that’s special, which is why exclusive invitations or offers.

Get feedback

The invite-only marketing strategy can be effective when it comes to improving a product or service. Users acquired in beta stages are a lot more engaged with the service and also help in future development. These are the users who are willing to give you appropriate feedback on the application as well as to monitor their usage to test whether you have created a product that people want and achieve product fit.

Create a buzz

Scarcity has a nice effect of increasing demand. You might get your product in-front of more eyeballs than otherwise because they feel a stronger desire to see it. It sparks the interest and curiosity of outsiders and drives product hype.

Filter spammy users

Invite only helps you to make sure these are your authentic users. Your first few users will be very important in helping you to determine your product roadmap. Especially useful if you have limited resources and can only work on certain important features. This will help you in prioritizing and pivot quickly if needed. So instead of focusing your attention on content you can more focus on the product.

Create a degree of connectivity

Especially if you are launching something with social feature it allows your invitees to send out their own invitations to their network, the new users will already have a connection on the network. This connectivity will help foster in-application social connections between groups of pre-existing friends. This Helps in getting users which may not have come otherwise new members who are referred by others tend to give products a longer trial run and have a higher likelihood of converting into long-term users than any other means of marketing.

Disadvantages of invite-only marketing strategy

There might be a severe disadvantage of the invite only. The worst is that even your early users will leave and forget your site. If you invite a bunch of people and they all join but post low-quality information or just don’t post at all, they won’t find it interesting to ask their friends to join too.

Negative buzz can kill your startup

Negative buzz can quickly damage the product reputation and stop new users from accepting invites and steer others away from inviting friends to use the product. One way to combat this is to game the system – populate the site with your own content or relevant curated content, have your friends and associates participate, call in favours in the form of engaging posts, etc.

Fewer users

Why would you like to limit the number of users who can sign up?  Let it be completely open and available to all and find other ways, such as using algorithms and user feedback systems, to deal with low-quality users and their low-quality content. After all, what proof is there invite-only systems produce all the potential benefits I’ve speculated on above?

Less feedback and sharing

More users will also result in more feedback and more word of mouth. In invite only you restrict people from using your product so how would they more about you even if they want to.

It’s harder

Invite only means more programming than not going invite only, all other things being equal. Do you really want to spend any of your valuable startup time creating a user-management system that allows you to specify who can and can’t sign up?

Do let us know if you going for invite-only marketing strategy for your startup!

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