Social Referrals & A Case Study of Changing Terms
With the rise of social media we have seen an interesting phenomenon over the past few years. Companies have found it is very valuable to entice people to refer their friends. Nowadays almost every major online service has referral links or codes. The idea is simple. Refer your friends and get a little sumthin’ sumthin’ for yourself.
There are of course abuses of these codes and people recommend services just to earn the money. I have never operated this way simply because I don’t feel it is a good way to get ahead. If I recommend a service then I want you to like it. I want it to work for you so you grow to trust my experience and judgement. I get far more from that then getting you to sign up for something that I don’t really like.
Hotel Tonight Changes Terms Without Notice
One of the services I have written about over the years is Hotel Tonight. Almost three years ago now I found the service and really grew to love it. As I have written time and time again, it isn’t the lowest priced option all of the time, but I have saved enough money over the years that it has become a tool in my arsenal. I search a number of tools and sites and ALWAYS book where I can get the absolute lowest price.
Hotel Tonight has had a referral program in place for many years. It used to pay $25 in credits whenever someone would book and use your code, but awhile back they changed it to require a minimum booking amount of $125. That made sense since I’m sure it isn’t very profitable for them to give a new customer $25 and the referrer $25 when the booking is made for a $40 hotel.
A Few Troubling Experiences
Since I have shared my experiences over the years, every once in awhile someone will use my code to sign up. It is always nice to get a little credit, but the truth is it is sort of like smoke and mirrors. The other day I received an email from Hotel Tonight that my account had been suspended since my referral code was found on a “coupon site”. The reality was that it was found here on Miles to Memories which is 100% within their terms given I own the site. Instead of bothering to look that up, they simply suspended my account.
It took a couple of days, but I got my account back. Yippee. Then I noticed something else. Now, instead of earning Hotel Tonight credits, I am only earning a $25 coupon good towards a $125 booking or more. They have devalued their referrals and didn’t bother to tell anyone. I did have an email exchange with the company and was told that as of November 1, 2015 they moved to this new system. Then I was told that was a mistake and it happened on October 12, 2015.
Being a person of details, I read over their FAQ in the app and noticed that it still said credits are earned for referrals. The Hotel Tonight agent quickly pointed out their updated terms of use and said they would look into fixing the FAQ. The terms do indeed have the new policy, but in one place they say referral coupons are good for 4 months (the actual policy) and in another place a year. In other words, there are mistakes aplenty. Were they in a rush to make these changes? Are they losing a ton of money? I’m not sure.
I’m Not Mad, I’m Realistic
So now to the point of this entirely long story. Hotel Tonight, Uber, Lyft, Airbnb, Orbitz and many other companies run their referral programs according to their terms. They can suspend your account without warning and probably even find a way to take your credits (which are not real currency BTW). Of course they can also decide to change the terms and not tell anyone either.
Businesses start small and need to grow their user base by gaining traction with referrals. From there two things often happen. Either they get really big and widely adopted and don’t feel the need for referrals so they devalue or eliminate those programs or they start losing so much money that they devalue or eliminate those programs. Of course some big companies do keep referral programs in tact as well.
The point of this post isn’t to bash Hotel Tonight or complain about their new system. In the end their service is still about saving money and I will continue to use it as a tool when searching for the lowest possible price. If people want to still sign-up with my code then fine, but I never recommended the service for that reason. I do have slight doubts about how the company is being run given my recent interactions, but I have had nothing but good experiences when booking through them including as recently as last week.
Conclusion
I struggled whether to write about this, but I think someone needs to cover the fact that companies can and will change their terms without notice. We see this all of the time with loyalty programs (although they have started giving more notice after pushback) and it is no surprise we will see it with referrals, etc. as companies grow and no longer need the word of mouth advertising as much.
Referral programs aren’t very different from normal award programs and we really need to think of them in those terms. The “money” earned isn’t real and the ecosystem could change at any time. If you like a product then refer your friends and if someone tells you about a great product or deal then use their referral link. Enjoy the sumthin’ sumthin’ but realize it’s the companies world and they just allow you to exist within it. They are using you until they decide they don’t you as much or at all.
Have some thoughts about the referral culture, Hotel Tonight or anything else regarding this topic? Let’s discuss it in the comments!
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I actually rarely find good prices on Hotel Tonight. It was a nice idea that had its day in the sun.
I agree that it isn’t as good as it once was, but I do find their “Geo rates” can be up to 50% off. Checking yesterday for example they had one hotel in Vegas at about 50% off compared to all other sites. There were other hotels that were the same or even more expensive, so it definitely is still a tool I check, but only one of many.