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Cover Sheet White Paper Referral Automation

October 2005 Dr. David Saad Chairman, President & CEO Calibra Corporation

Notice

The information contained in this document reflects Calibra’s current view of the subject matter discussed herein as of the date of publication. This document is subject to changes and, therefore, it shall not be construed as a commitment by Calibra who does not guarantee the accuracy or completeness of any information contained in this document after the date of publication. THIS WHITE PAPER IS PROVIDED “AS IS” FOR INFORMATIONAL PURPOSES ONLY. CALIBRA MAKES NO WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THIS DOCUMENT, AND EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT. Calibra may have patents, patent applications, trademarks, copyrights, or other intellectual property rights covering the contents of this document, and Calibra and its licensors retain all right, title, and interest in and to such intellectual property rights. Except as expressly provided in a written agreement between you and Calibra, the furnishing of this document does not grant you any license, express or implied, to any such patents, patent applications, trademarks, copyrights, or other intellectual property of Calibra. Calibra and Bu z z are trademarks or registered trademarks Calibra protected by the laws of the United States and other countries. This white paper may contain some references to trademarks owned by entities other than Calibra, and such trademarks are the property of their respective owners.

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Table of Content 1. Synopsis ……………………………………………………………………………………………………………………. 2. Referral Automation ………………………………………………………………………………………………………… 3. Referral Networks ……………………………………………………………………………………………………… 4. Functions ……………………………………………………………………………………………………………….......... 5. Features ………………………………………………………………………………………………………………............ 6. Framework ……………………………………………………………………………..……………………............ 7. Layers ………………………………………………………………………………………………………………............ 8. Workflow ……………………………………………………………………………………………………………….......... 9. Technologies ………………………………………………………………………………………………………............ 10. Benefits ……………………………………………………………………………………………………………….. 11. Conclusion …………………………………………………………………………...………………………………............

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1. SYNOPSIS Considering the high customers’ acquisition cost on the web, and the overall low return on the investment from advertising, marketers are under tremendous pressure to produce more with less. Consumers have become increasingly overburden, and even annoyed, by the tremendous noise that advertisements generate. They have become distrustful of, or at least less influenced by, marketing messages. With the advent of the web, consumers have turned their back to marketers and open their ears to their peers. As a result, there is a paradigm shift – consumers have taken control from marketers who must now adapt to the new realities of the marketplace. One viable solution is to leverage the investment made in a company’s corporate web site by empowering it with a Referral Automation System whose main objectives would be to:

Generate qualified leads through referrals which could lead to new sales, cross sales, and up sales. The benefits would be to increase revenues & profits, and increase market share & market penetration.

Create awareness through word of mouth which increases mind share and strengthens the brand.

Earn loyalty through incentives which decreases sales costs and sales cycles – it costs between 5

to 10 times more to sell to a new customer versus an existing one, and it takes 3 to 6 times more to sell to a new customer versus an existing one.

A Referral Automation System should formalize the viral marketing process for referring purposes and facilitate peer-to-peer marketing for seeding purposes. Specifically, a Referral Automation System should include the following main functions: (a) referring; (b) seeding through channels such as e-mail, instant messengers, chat rooms, bulletin boards, forums, users groups, listservs, blogs, etc.; (c) taking positive and negative pulse of different channels; (d) collecting feedback; (e) incentivising referrals; (f) defining rules; (g) profiling; (h) reporting; (i) analyzing traffic; (j) analyzing social networks; (k) forecasting; (l) simulating, launching, monitoring, and evaluating viral marketing campaigns; (m) evaluating scorecards; and (n) interfacing with other enterprise applications such as CRM, Sales Force Automation, and Recruiting Automation. A Referral Automation System must be built with state-of-the-art technology that offers advanced features such as rich user experience, compatibility with all main browsers, extensive online help, standard utilities, advanced rich text formatting, copy writing tools, personalization, customization, and technical robustness which includes high availability, reliability, efficiency, scalability, maintainability, security, privacy, fault-tolerance, fail-over, load balancing, clustering, and internationalization. It must be organized in three layers, namely: a transaction layer for users, a management layer for managers of the referral program, and an administration layer for web masters. By its very nature, a Referral Automation System is a network application that should be deployed on the web and is ideal for a Software-as-a-Service (SaaS) operating under the Application Service Provider (ASP) model. In order to support such industrial robustness capabilities, the framework must be based on a Model View Controller (MVC) architecture, and a 4-tier Service Oriented Architecture (SOA), scalable to an n-tier architecture. In order to leverage the real power of referrals, a Global Referral Network is suggested which aggregates all Corporate Referral Networks creating a total greater than the sum of all the parts. As a result, referrals could be the next and most effective bellwether for trends.

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2. REFERRAL AUTOMATION The term “Referral Automation” was coined by Dr. David Saad – founder, Chairman, President & CEO of Calibra Corporation. A Referral Automation System (RAS) is a software application that attempts to:

Formalize viral marketing by introducing best practices to the process of generating qualified leads through referrals and earning loyalty among constituents.

Facilitate pee-to-peer marketing by

providing different channels of communication such as e-mail, instant messengers, chat rooms, bulletin boards, forums, users groups, listservs, and blogs for the purpose of seeding word of mouth.

Viral marketing covers “referring” while peer-to-peer marketing covers “seeding”. One complements the other. They are both required in a Referral Automation System. Referring is when person A recommends an item to person B, while seeding is when person A simply buzzes about an item in a channel. Typically, the buying process starts with the buyer being exposed to whatever buzz is going on about a particular item. The actual buying occurs only after a referral takes place. Thus, a buyer is first influenced by some buzzing and the decision to buy is solidified only after receiving a referral or a recommendation from a trusted source. A Referral Automation System is ideal to be deployed as a Software-as-a-Service (SaaS) under the Application Service Provider (ASP) model for the following reasons:

By its very nature, a Referral Automation System is a network application. Thus, in order to take real advantage of the benefits that it offers, a Referral Automation System must be deployed on the web and must reach beyond a company’s corporate walls by encouraging not just employees to make referrals but all constituents including visitors, contractors, partners, vendors, customers, investors, advisors, directors, etc.

A Referral Automation System is not a mission critical application such as a support system or a

reservation system for airlines, cars, hotels, or theaters. Therefore, if the system goes down, it would be merely an inconvenience to users but not a disruption of the business. If there is a denial of service, a company is unlikely to loose money like in a reservation system or generate customers’ dissatisfaction like in a support system. While a Referral Automation System is very important for generating leads, creating buzz, and earning loyalty, it is still an auxiliary system relative to the core of a business.

Deployment could be done in days not in months or even years as it is the case with large CRM or

ERP applications.

No maintenance is required - the vendor maintains the system as part of the service offered.

No upgrades required and no incompatibility problems – all customers use the most recent version.

No large license fee to be paid upfront. The barrier to deployment is lowered due to an affordable monthly subscription fee.

Leverage the benefits of a Global Referral Network where the total is greater than the sum of each

Corporate Referral Network (see nest section below).

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3. REFERRAL NETWORKS In order to capitalize on the tremendous benefits of referrals, a Global Referral Network should link all other Corporate Referral Networks together. Companies can then expand the reach of their referral program by posting referral offers for their products, services, activities, and jobs not just on their own web site but also on a public Global Referral Network. As an analogy, a company could and should post its jobs on its career section in its own corporate web site as well as post jobs that are hard to fill on public job boards like Monster or CareerBuilder. Another benefits of such Global Referral Network is that the service provider can then gather statistics from all Corporate Referral Networks to produce market intelligence that would have not been available without the Global Referral Network. Such statistical analyses could be highly beneficial to each industry, yet without ever compromising users’ or companies’ privacy. For example, a Global Referral Network can generate statistical analysis indicating that there is an increase in number of referrals for SUVs in the last three months. All of a sudden, referrals become bellewhether for trends much more so than surveys. The latter have an inhirit percentage of inaccuracy because people might not be so truthful when answering questions in a survey. On the other hand, a referral is truthful by its very nature, unless there is some kind of conspiracy to make referrals just for the sake of it, which is highly unlikely. In other words, when a person refers an SUV to a friend, there is no ambiguity about the interest of that friend in SUVs. Another benefit that a Global Referral Network offers is a universal access through a common passport that allows users to carry their preferences and personalization from one Corporate Referral Network to any other within the Global Regerral Network without ever compromising the security and privacy of any user and any company within the network which as shown below is a fully connected bidrectional graph with a star topology. Such feature highly increases the usability of the entire Referral Automation System at the corporate and at the global level.

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4. FUNCTIONS As the system diagram below shows, a Referral Automation System has two main functions, namely: referring and seeding as recommended in the white paper “Viral Marketing Best Practices”. Those two main functions are integrated together and complement each other. A Referral Automation System should include 14 different components which are explained in the following pages in alphabetical order. A screenshot from Bu zz – a Referral Automation System from Calibra is provided to illustrate a sample function within each component.

Feedback

Pulses

Reviews Bulletin Boards Chat Rooms Weblogs Surveys Needs Future Developments Error reporting Guests Book Heard About Visits

Referring Seeding

Incentives

Forecasts

Networks Interfaces

Profiles

Scorecards

Campaigns

Utilities

Reports

Traffic

Referrals

Rules

SFA CRM ERP RAS

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Campaigns

The Campaigns component allows companies to define, execute, monitor, evaluate, simulate, and analyze viral marketing campaigns to promote their products, services, activities, jobs, web site, company, etc. It is not enough to be reactive by placing referral buttons throughout a web site, and hope that visitors will refer. It is necessary to be proactive by systematically promoting a referral program through well-planned permission-based viral marketing campaigns without which a referral program looses its real potential. One of the main functions of the Campaigns component is to identify the Mavens, Influencers, Connectors, and Spreaders based on the profile of individuals, their preferences, their feedback, their permission to be contacted, their surfing habits, and their social network status. Prior to launching any campaign, and before spending any effort and incurring any cost, a marketing manager can simulate a viral marketing campaign by specifying certain parameters and watching how the word could potentially spread around based on different scenarios. With such simulation, the marketing manager has a powerful tool to predict the outcome of a viral marketing campaign prior to launching it. “if you can’t measure it, you can’t manage it”. In today’s tight economy, managing bottom line results is critical. The Campaigns component calculates the ROI on each campaign, compares each campaign with other campaigns, compares the results of a campaign versus its objectives that could be set, and increasingly refines each campaign to better target referrers. Hence, the more the system is used, the more it becomes proficient at identifying and targeting qualified prospects. In the screenshot below, the individuals shown in blue are the ones who got infected by word of mouth based on criteria that the marketer manager can change dynamically by performing “what if” scenarios. The colors below each picture indicates whether a person is a Maven, Influencer, Connector, and/or Spreader. By clicking on a particular node, the profile of that person is displayed. By right clicking on a particular node, a floating tool menu bar appears that allows a user to view the profile of that person, send an e-mail message, chat with that person, place a posting about that person, review that person, call that person, or blog about that person.

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Feedback

The Feedback component allows companies to collect some feedback from their constituents from different channels such as reviews, bulletin boards, chat rooms, weblogs, surveys, needs, future developments, error reports, guests book, heard about, and visits. All such features must be easy to use and available to users with just one click. They also should not be interruptive and too demanding. According to the Harrison Publishing Company, the cost of acquiring a new customer is 5 to 10 more compared to the cost of retaining an existing one. Furthermore, a 5% increase in customer retention can result in a 25% to 95% increase in profitability. Thus, getting feedback is not just a good marketing practice but it is also a financially sound one. Furthermore feedback is essential to peer-to-peer marketing which is critical to seeding word of mouth. As a result, companies should incentivize their users to provide feedback. With the advent of the web, consumers have turned their back on marketers and turned their ears to their peers. Nowadays, consumers rely more on their peers or on experts rather than on marketers to get the information that they need in order to make buying decisions. Some of the information provided in the Feedback component is fed to the Campaigns component to help identify individuals that should be included in a particular viral marketing campaign. For example, if an individual has made a lot of reviews all of which have been highly rated with good critics, then that person could be considered as a Maven and possibly an Influencer. One of the unique feature of the Feedback component is its capability to propagate reviews, ratings, and the like provided by reviewers to others. For example, users don’t need to come to a web site to check out reviews or ratings of certain items of interest to them. Rather, those reviews and ratings automatically appear in their inbox based on their interest and permission. The process is done through alerts related to items, subjects, and reviewers. For example, a user could set up an alert whenever a review is posted about a particular subject, for a particular item, by a particular reviewer. Such feature expands the walls of a corporate web site and makes feedback contagious. The screenshot below shows how a user can rate an item and can click on the pie chart to view the poll of other users who have rated that item.

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Forecasts

The Forecasts component projects the time and the amount of revenues, profits, referrals, or points that will be generated from Referrals which are currently in the pipelines. There are two types of Forecasts: Individual and Global. The former is limited to a particular referrer, while the latter includes all referrers. Only authorized users have access to the Global Forecast.

The phase and the probability of closing or consummating a particular referral are either entered manually or obtained automatically through the Interfaces component from sales forces automation systems or recruiting automation systems. While every company has its own marketing, selling, and recruiting processes, they all have a common Referral Cycle regardless of the company and regardless of what is being referred. However, while the general phases of a Referral Cycle are common to everyone, the activities, the process, and the length of each phase vary from one company to another, and from one type of referral to another. The pipeline in the Forecasts component includes the following common phases of the Referral Cycle:

Solicitation Phase with an average of 21 days and with an assigned probability of 10% Education Phase with an average of 14 days and with an assigned probability of 30% Evaluation Phase with an average of 10 days and with an assigned probability of 40% Comparison Phase with an average of 5 days and with an assigned probability of 60% Closing Phase with an average of 3 days and with an assigned probability of 90%

Within every Referral Phase there is a ranking that indicates the level of interest of the Lead. For instance, a Lead may still be in the Evaluation Phase but with a high degree of interest, while another Lead could be in the Closing Phase but with low ranking because he/she is losing interest. The screenshot below shows the pipeline by revenues of all referrals in different phases.

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Incentives

The Incentives component allows a company to define and manage rewards to attract leads and referrers to participate in the referral program. In addition to rewards, companies could run Sweepstakes, Contests, and Awards. Winners are promoted to encourage others to participate in the referral program. The Incentives component is based on points. Companies can create a catalogue of rewards which could be any gift including cash. Each reward has a dollar amount and number of points associated with it. After accumulating points, referrers can choose between redeeming some of their points against certain rewards in the catalog, transferring some of their points to their friends, or donating some of their points to charities. Marketing Managers can generate statistical reports and charts to analyze the popularity of certain rewards which would help them build a more desirable catalogue. They can also choose which action would be rewarded, namely: referring an item, clicking through the referred item, propagating the referral to others, and consummating the referral. Marketing Managers have the capability of deciding if, how, and how much to incentivize depending on the type of item being referred. An incentive could be necessary in one case but outright insulting in another.

Satisfied customers are a necessary but not sufficient condition for getting positive word of mouth. The combination of customer satisfaction and rewards is an effective way to get satisfied customers to make positive recommendations. Furthermore, incentive programs targeted at strong ties may be more effective than those targeted at weak ties between Referrers and Leads. The screenshot below shows a catalogue of prizes set up by a company. A user can drag and drop items in the cart to redeem them. As prizes are selected, the system automatically computes the balance of points remaining in the account that could still be redeemed, transferred, or given to a charity.

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Interfaces

The Interfaces component allows a company to integrate or at least interface the Referral Automation System with other systems such as:

Enterprise Application Planning (ERP) packages such as SAP R3, Oracle 11i, PeopleSoft, etc. Customer Relations Management (CRM) packages such as Clarify, Siebel, etc. Sales Force Automation (SFA) packages such as Siebel, Vantive, GoldMine, SalesLogic, etc. Recruiting Automation packages such as BrassRing, Taleo, WebHire, etc. Job Boards such as Monster, CareerBuilder, Yahoo Hotjobs, etc. Portals such as AOL, MSN, or Yahoo Global Referral Network

The information that the Referral Automation System passes along to other applications includes the following:

Referrers’ Coordinates Leads’ Coordinates Item being referred Message Opinion Rating Referral Date

The information that other applications pass along to the Referral Automation System includes the following:

Phases of the selling or recruiting cycles Phase of a particular referral in the selling or recruiting cycles Status of a referral (i.e., whether a Lead consummated the referral or not) Date of consumption, if any Amount of consumption, if any

The screenshot below shows the parameters that are interchanged between Bu z z and Siebel System.

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Networks

The Networks component builds a Social Network not just out of users’ address books like some other tools, but more importantly and uniquely, as a result of referrals that occurred between individuals. For leads and referrers, the Networks component could be a fun tool to have due to its capabilities of visualizing the Social Network. For marketers, the Networks component is rather a sophisticated and serious tool that includes comprehensive features that solve complex problems. In addition to allowing marketers manipulate the Social Network by adding or deleting nodes and connections, most importantly, it provides Social Network Analysis (SNA) that could be performed at the network and at the node level. Such analysis helps marketers understand the behavior of the Social Network, identify key players who could have a significant role in spreading the word around, and simulate a viral marketing campaign before launching it, and hence increase the ROI on each campaign. Specifically, the Social Network Analysis helps identify the Mavens, Influencers, Connectors, and Spreaders (MICS) in a Social Network using analyses such as clustering, centrality, structural equivalence, structural holes, E/I Ratio, small worlds, etc. The screenshot below shows the degree of separation in a social network of a particular person. On the left, some search capabilities are provided such as:

Find people Find the shortest path between two persons Find the longest path between two persons Find all paths between two persons Find the degree of separation between two persons Find all connections to a person.

A user can change the topology of the Social Network, zoom in/out, drag the entire network, select multiple nodes, establish connections, drag & drop individuals from the address book into the Social Network, etc.

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Profiles

The Profiles component includes profiles on individuals, organizations, products, services, jobs, activities, pets, etc. Profiles consist of either flat or hierarchical records. The owner of a Profile can choose to provide as much or as little information as desired. Usually, the more information the user provides, the better it would be, because Profiles are constantly reviewed by users. Profiles could be quite detailed and precise at a very granular level. In addition to information stored in fields, users can upload any file which could be a text, image, audio, or video file in any of the standard formats. There are three privacy levels which a user could choose from for every Profile that he/she owns:

Public – the profile will be shown to all users.

Private – the profile will be hidden from all users and only you have access to it.

Selective – the profile will be shown or hidden from certain users who meet certain criteria which the owner of the profile can define. For example, an owner may decide to grant access to specific named individuals and all marketing managers who live in Los Angeles.

Profiles are created with standard technology such as SQL and XML making them secure, portable, transferable, scalable, customizable, sharable, and available. They can be posted, searched, filtered, reviewed, and rated by users. The screenshot below shows the picture of a person in her Individual Profile, which could be quite comprehensive. Specifically, it includes coordinates, documents, pictures, audios, videos, biography, career, education, capabilities, skills, talent, achievements, publications, inventions, affiliations, hobbies, preferences, references, physical description, etc. The user can be very brief by providing only his/her name or very informative.

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Pulses

The Pulses component monitors in real-time the buzz about companies, individuals, products, services, activities, and the like that might be going on in e-mail messages, instant messengers, chat rooms, bulletin boards, forums, listservs, user groups, and blogs. The Pulses component can keep track of both positive and negative buzz. It can also keep track of competitors and provides a ranking relative to the level of talks that is taking place in different channels. The Pulses component allows a company to identify those channels in which people are talking about the company, its products, its services, its activities, and its jobs the most which might help the company target its marketing effort. The company could assign a certain weight for every channel which determines the company’s overall popularity and reputation. The main features of the Pulses component are the following:

Number of Pulses Number of criteria for each Pulse Sophisticated text search capabilities with similarity, context, phonetic, and proximity searches. Channels include chat rooms, bulletin boards, blogs, instant messengers, and e-mail messages. Weight for every channel to determine its importance relative to the popularity and reputation Comparison of items, channels, and competitors Ranking Popularity Reputation with positive and negative buzz

The screenshot below shows the pulse of a specific product by channels which could be easily changed to Items, Competitors, Top, Ranking, Popularity, or Reputation by simply clicking on the desired criteria in the Horizontal Menu Bar.

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Referrals

The Referrals component allows any user - registered, non-registered, logged in, or logged off, to refer any item. However, only registered users who have logged in can earn incentives for their referrals and can personalize the Referrals component. A Referrer can refer an item to one or several people. The system could also make some suggestions based on certain criteria as to who else in the Referrer’s Social Network would also be interested in receiving the referral which makes the referral process itself contagious. A Referrer could resort to his/her address book which could be an aggregation of many address books from different systems. The Referrals component has the capability of providing standard pre-defined referral messages for each item. However, the Referrer also has the capability of defining his/her own messages using advanced rich text formatting. Furthermore, the Referrer can attach files and a greeting card as well as make some specific recommendations which are polled. Those polls are quite helpful for the receiver who can evaluate not just what the Referrer is recommending but also what other people think of the item referred. The Referrer can define his/her relationship with the recipient and with the company. Similarly, when a recipient receives a referral message, he/she can also define his/her relationship with the Referrer and the company. Those definitions are not required but they are helpful in building a meaningful Social Network. Incentives are offered to encourage referrers and recipients to provide as much information as possible. A Referral Tree is automatically built when there is a chain of referrals. The Referral Tree is used to distribute the incentives according to a specific formula. For example, the closer a Referrer is to a recipient who consummated the referral, the higher the incentive would be, and vice versa. The Referrals component allows companies to keep track of referrals, analyze them, and pass along some information to almost all other components. The screenshot below shows the rich text formatting feature that allows referrers to customize their message.

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Reports

The Reports component allows authorized users to generate standard and/or customized reports. Reports could be related to numerous topics such as transactions, activities, referrals, usage, performance, statistics, payments, traffic, return on investment, archives, etc. Reports could be generated in either HTML or PDF format. There are two types of reports:

Standard Reports, which can only be modified or deleted by the development staff. Custom Reports, which consist of two categories:

Custom Corporate Reports, which are designed and generated by web masters.

Custom Corporate Reports can be added, modified, or deleted only by their respective authors.

Custom Individual Reports, which are designed and generated by any authorized

user. Individual Reports can be added, modified, and deleted by their respective authors as well as the assigned web masters.

The screenshot below shows an HTML report of all referrals that occurred in a particular month. The user can easily navigate through different reports that are available by using the navigational buttons (First, Previous, Next, and Last) located in the Bottom Tool Menu Bar.

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Rules

The Rules component allows companies to define certain rules that apply to their referral program. Its purpose is to manage, control, and reach a good compromise between integrity and exposure which both affect the success of a referral program. Rules could be applied to all types of users and to all types of referrals (i.e., products, services, jobs, activities, documents, web pages, pets, etc.) The Rules component provides protection against spamming, pollution, conflict, and conspiracy. In addition, there are general rules that apply globally, common rules that apply to certain users or certain types of items, and specific rules that apply only to a specific item. The Rules component offers flexibility to companies in enforcing rules in the referral process by defining a Severity level to each rule. The scale of the Severity level ranges from 1 being the least severe to 10 being the most severe. For example, when a referrer makes a referral and breaks a rule, depending on its Severity level, the referral could pass, put on hold for further approval by the company, or rejected. Therefore, the company is privy to bend the rule and let a particular referral pass. In addition, companies could define a Tolerance level consisting of the Severity Level, number of rules broken by a specific referral, and percentage of total number of broken rules.

Finally, some analyses and reports on security, severity, tolerance, and types are provided. The screenshot below shows a list of parameters along with their limit and their severity level that could be defined to fight spamming.

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Scorecards

The Scorecards component is a rule-based, recursive, and self-learning scoring system that provides a score, some statistics, and some analyses on any item including an individual, organization, product, service, job, activity, document, pet, etc. Unlike Rating in Reviews in the Feedback component where a user actually inputs his/her rating of an item, the score of an item is automatically generated internally by the system based on number of criteria each of which has its own weight or priority relative to other criteria. While the scoring is subjective and relative, the scoring system is balanced because it considers a weighted average in almost all criteria. The scoring system is hierarchical - it includes an Overall Score and a Detail Score. The former includes characteristics that are unique to each item. For example the characteristics in the Overall Score of an individual are: Maven, Influencer, Connector, Spreader, Lead, Reviewer, User, Profile, and Pulse. Thus, the Overall Score takes into consideration the different perspectives or roles that an individual could play. The Overall Score is then refined in a Detail Score in which every characteristic is broken down in number of unique factors. Each factor is then assigned a score and a weight to express its bias, importance, or priority in the evaluation. To continue with our example, the Maven characteristic of an individual is broken down into the following factors: links to Individual’s Blog, average rating of individual’s blog, visits to individual’s blog, average rating of individual’s reviews, number of reviews by individual, education, self-proclamation, and positive pulse obtained from the Pulses component. Like the Rating in Reviews in the Feedback component, the scoring scale is based on a five-star rating with 1-star being the worst and 5-stars being the best. The screenshot below shows the score of a user as a Maven. The detail score shows the number of votes, the score, and its corresponding weight for each criteria, all of which are aggregated into a single score for that category, which itself is aggregated into one single overall score for that individual.

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Traffic

The Traffic component provides web metrics and web analytics that allow companies to monitor, measure, and analyze visits to particular web pages, especially those who include referral offers. The main purpose of the Traffic component is to measure the effectiveness of Referral Offers in order to increase the return on the investment of the entire referral program. By better understanding the surfing habits of their leads and referrers, companies can be more responsive, pro-active, and much more sensitive to the needs of their constituents. The Traffic component is quite helpful in figuring out the conversion from visitors to referrers, surfing habits of certain individuals, frequency of visits, duration of visits, day and time of visits, logs, rankings based on number of different criteria, etc. Information gathered in the Traffic component is passed along to the Campaigns component to help identify individuals who should be targeted for the next viral marketing campaign based on their surfing habits being as one of the criteria for selection. The screenshot below shows a vertical pyramid chart of number of visits, interests, referrals, and consumptions of all items during a certain period. The user can change the parameters including the type of chart desired.

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Utilities

The Utilities component includes number of utilities that make the usage of the Referral Automation System so much more productive and even more pleasant. The Utilities component includes: Some utilities like Calculators, Clocks, Imaging, and Notepad are independent of any component while other utilities complement certain components or interface with other utilities or with each other. For example Address Book complements the Profiles component and interfaces with the Tasks utility. Other utilities like Maps, Options, Search, and Sticky Notes are global utilities that could be used from any component. Finally a comprehensive help utility includes Page Info, Record Info, Users Guide, Primer, FAQ, Wizard and Showtime. All such utilities provide information that assists users in their usage of the referral Automation System. The screenshot below shows the Clocks utility. By simply position the cursor on a particular country in the map, the corresponding local time will be displayed.

Address Book Calculators Calendars Chat Clocks Clips Download FAQ

Imaging Maps Notepad Options Page Info Prefaces Preview Primer

Print Record Info Search Showtime Sticky Notes Tasks Wizard

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5. FEATURES A Referral Automation System should have the following main features:

A rich user experience that offers advanced functionality and high usability similar to the ones found in high-end desktop applications. In particular, navigation must be excellent. The graphical user interface must be easy to use, familiar, and fast. It must provide a lot of features but only upon request. Hence, the complexity must be hidden for novice users.

Compatibility with all main browsers to

the extent possible considering the fact that there is likely to be a compromise between a rich graphical user interface and browser compatibility.

Extensive online help that includes users guide, reference guide, primer, wizard, FAQ, tips, maps, presentations, demonstrations, and error reporting & tracking.

Standard utilities such as searching, previewing, printing, downloading, uploading, etc.

Advanced rich text formatting capabilities including font picker, bullets, alignments, spacing, colors, gradients, textures, patterns, icons, illustrations, and emoticons which allow users to come up with some jazzy messages, all of which contribute the contagion factor.

Copy writing tools such as spelling checker, grammar checker, thesaurus, and a dictionary to assist users in drafting exciting referral messages which contribute to the contagion factor.

Personalization that allows a registered user to define certain settings and preferences related to navigation, records, tabs, security, privacy, etc.

Customization that allows:

Web masters to match the look & feel of the Referral Automation System as their own web site (i.e., skinnable system), interface to other systems, etc.

Marketing managers to define their own rules, create their own incentives, establish their

own cycles, etc.

Technical robustness which includes high availability, reliability, efficiency, scalability, maintainability, security, privacy, fault-tolerance, fail-over, load balancing, clustering, and internationalization.

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6. FRAMEWORK A Referral Automation System is a network application that must be web native for the purpose of generating qualified leads through referrals, seeding a meme through word of mouth, and earning loyalty through incentives. It must provide high availability, reliability, efficiency, scalability, maintainability, security, privacy, fault-tolerance, fail-over, load balancing, clustering, profiling, customization, personalization, and internationalization. In order to support such industrial robustness capabilities, the Framework must be based on Model View Controller (MVC) architecture. Specifically, the Framework must be a 4-tier Service Oriented Architecture (SOA), scalable to an n-tier architecture. Such advanced features of the Framework offers the benefits of reducing the cost of development, the cost of maintenance, the costs of support, and the Total Cost of Ownership (TCO). The Framework should include the following main components:

Presentation Component: Handles all user interaction for the application View Component: Displays the Presentation Component to the user Front Component: Controls the flow of information between components Request Processor: Processes the information obtained from the Presentation Component Business Model Component: Executes the business logic of the application Data Accessor Component: Executes all pre and post actions for the database communication. Utility Component: Offers number of common utilities across Tiers to different components. Helper Component: Abstracts the HTTP request and the user session management

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7. LAYERS A Referral Automation System should include three layers:

The Transaction Layer is intended for users who could be leads or referrers. In this layer, users can register; post their individual profile; login/logoff; personalize the system to better fit their needs; make referrals; redeem earned incentives; generate reports; and provide feedback which could include reviews, bulletin boards, chat rooms, weblogs, surveys, needs, future developments, error reports, guests book, heard about, and visits.

The Management Layer is intended for managers responsible for managing the referral program. In this layer, managers can define the rules for referrals to protect against spamming, conflict, conspiracy, and pollution; create incentives to encourage referrals; post profiles of items to be promoted through viral marketing campaigns; keep track of referrals; analyze traffic by performing web analytics and web metrics; analyze different channels for the purpose of keeping a pulse on the market relative to the quantity and quality of word of mouth; analyze Social Networks to identify the Mavens, Influencers, Connectors, and Spreaders (MICS); simulate, launch, and manage viral marketing campaigns; analyze feedback; forecast; evaluate scorecards of people and items; and generate reports.

The Administration Layer is intended for web masters who are the custodians of the Referral Automation System. In this layer, web masters can enforce security by assigning User Ids and passwords; safeguard the privacy of users; customize the system to match the look & feel of the corporate web site; interface with enterprise applications by passing along leads generated through referrals to Marketing Automation, Sales Force Automation, or Recruiting Automation systems; monitor the performance of the Referral Automation System; and perform regular backup and recovery procedures.

Management Layer for Managers Define rules Analyze traffic Simulate & launch viral marketing campaigns Create incentives Analyze channels’ pulse Forecast Post profiles Analyze Social Networks Evaluate scorecards Track referrals Analyze feedback Generate reports

Transaction Layer for Users Register Refer Post Profile Provide feedback Login/logoff Redeem incentives Personalize Generate reports

Administration Layer for Web Masters Enforce security Customize system Safeguard privacy Perform backup & recovery Monitor system performance Interface to enterprise applications

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8. WORKFLOW The process starts with an organization wanting to promote an item which could be the company itself, its products, services, activities, jobs, web site, etc. Once an item to be promoted is described in either the organization’s web site or in a centralized referral board, the web master should empower the web site with referral capabilities by inserting buttons or links at points of interests or points of inflection to allow users to make referrals and allow managers to keep track of referrals. The marketing manager should follow the following viral marketing best practices:

Position the item to be promoted by providing the necessary information and provide a unique value

proposition to encourage propagation not necessarily influence to purchase. Craft an appropriate message that will ignite diffusion.

Create incentives to encourage users to refer.

Establish the lines of communication such as e-mail, instant messengers, chat rooms, bulletin boards,

forums, listservs, users groups, and blogs. Define the rules of engagement to protect against spamming, conflicts, conspiracy, and pollution or

dilution of the referral program. Analyze the Social Network of all constituents for the purpose of identifying the Mavens, Influencers,

Connectors, and Spreaders (MICS). Simulate, adjust, and then launch a viral marketing campaign.

Gather feedback

Measure and analyze the results of the viral marketing campaign.

Repeat and adjust the process above as necessary.

When a user makes a referral, the Rules component gets automatically invoked. There are three possible scenarios:

If the referral fails to pass any severe rule, then the referral is automatically rejected, a log is created, and the black list gets updated.

If the referral hits a small snag, the failure could be tolerated and the referral could be sent anyway

depending on the referral program manager.

If the referral passes, then an e-mail message is sent to the lead(s) or recipient(s). Depending on the incentive rules, the referrer could get an incentive for just the sheer fact of referring an item or only when the referral gets consummated by any of the leads or recipients.

When a referral is made, the Campaigns component gets the necessary information to help qualify both the referrer and the lead for the next campaign. Most importantly, the referral is passed along to the Interfaces component which sends the information to the appropriate enterprise application such as ERP, CRM, Sales Force Automation, or Recruiting Automation. Finally, the marketing manager or the referral program manager has at his/her disposal some analytical components such as Networks, Scorecards, Forecasts, Traffic, Reports, and Utilities, all of which communicate with the Campaigns component.

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Referrals

Incentives

Forecasts

Interfaces

Profiles

Scorecards

Campaigns

Utilities

Reports

Rules

SFA CRM ERP RAS

Pass

Fail

Analytics

Networks

Traffic

Tolerate

!

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Aside empowering a corporate web site with a Referral Automation System, a viral marketing campaign starts with seeding in a particular social network the word of mouth about the item to be promoted. In order for the seeding to take place, peer-to-peer marketing must be facilitated to ignite conversation among peers in different channels such as Reviews, Bulletin Boards, Chat Rooms, Web Logs, Surveys, Needs, Future Developments, Error Reporting, Guests Book, Heard About, and Visits. When any feedback is given, the system checks for any alerts so that the feedback is automatically sent to the user who has requested it. The recipient of such feedback is encouraged to propagate the feedback to peers. That means that the feedback could be contagious which re-enforces seeding. The feedback is passed along to:

The Campaigns component to help identify those who are activists. The Scorecards component to help evaluate the level of involvement of an individual. the Pulses component to help establish the level of positive or negative buzz about the item. the Traffic component to establish users’ surfing habits for the viral marketing campaign. the Reports component which generates reports that help analyze the feedback given.

Scorecards

Feedback

Pulses Reports Traffic

Reviews Surveys

Bulletin Boards

Chat Rooms

Web Logs

Needs

Future Developments

Error Reporting

Guests Book

Heard About

Visits

Campaigns

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9. TECHNOLOGIES Referral Automation is a complex field because it is multi-disciplinary. Specifically, it includes viral marketing, peer-to-peer marketing, memetic, sociology, sociometric, social network analysis, network theory, and graph theory. Each of those disciplines require different technologies. Combining all such technologies together could be a real challenge. That’s one of the main reasons why companies who happen to be victims of the “non-invented here” syndrom should shy away from attempting to develop their own home-grown Referral Automation System but rather license an off-the-selve one from a reputable vendor. There are two sets of technologies to consider:

Infrastructure Technologies: There are three categories of technologies to consider in this set of technologies:

Framework Technology: A Referral Automation System must provide industrial robustness as defined is section 5. This means that the Framework must be based on either J2EE or .Net technology. While there is a religious war that has been going on for a while between the two camps, despite our bias towards J2EE, and considering the new features in .Net, we believe that both technologies are nowadays viable.

Graphical User Interface Technology:

A rich user experience is required for a Referral Automation System. Since such system must be web native, current technologies such as HTML, Javascript, Active X, Applets, and the like have each some serious limitations. The adoption of new technologies such as AJAX, Java Server Faces (JSF), or equivalent technologies that offer the high functionality and usability found in high-end desktop applications combined with the best features of the web is required.

Search Technology: A comprehensive search engine that can satisfy the needs for taking pulses and which provides similarity, proximity, phonetic, content, semantic, and intelligent searches.

Domain Technologies:

The following technologies must be considered:

Java Universal Networking & Graphing (JUNG) for the visualization of Social Networks

GraphML is a comprehensive and easy-to-use file format for graphs. It consists of a language core to describe the structural properties of a graph and a flexible extension mechanism to add application-specific data.

Pajek file format is used by the tool of the same name which gives the possibility to

visualize graphs using conventional algorithms used in social network analysis.

LEDA provides algorithmic in-depth knowledge in the field of graph and network problems, geometric computations, and combinatorial optimization.

Simulation Investigation for Empirical Network Analysis (SIENA) is a program for the

analysis of repeated (longitudinal, dynamic) data on complete social networks.

PREFUSE is a user interface toolkit for building highly interactive visualizations of structured and unstructured data.

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10. BENEFITS A Referral Automation System offers many tangible and intangible benefits to all users including:

Leads can buy products, subscribe to services, participate in activities, get a job, or adopt a pet while benefiting from a coupon, a discount, a free sample, a prize, an award, or other incentives when they consummate a referral.

Referrers can earn a referral fee, a prize, or an

award for their referral, while at the same time helping a relative, a friend, or a colleague. In essence, referrers have the opportunity to monetize their Rolodex, satisfy their self esteem, and be self gratified.

Companies can:

Increase the quantity and the quality of leads. Decrease the recruiting, sales, and marketing cycles. Decrease the recruiting, sales, and marketing costs. Increase employees’ and customers’ loyalty and retention. Decrease employees’ and customers’ attrition. Increase revenues and profits. Increase market share, market penetration, and mind share. Enhance the branding of their company and their products

Referrals could not just empower web sites but also empowers classifieds and auctions which typically attract buyers. By empowering classified and auction ads with referral capabilities, they could attract not just buyers but people who know buyers, which gives advertisers a better return on their investment in their ad. Furthermore, conventional classifieds and auctions are reactive – place an ad and wait for a response. On the other hand, with a Referral Automation System companies can be proactive by aggressively promoting their referral offers through viral marketing campaigns targeted to specific social networks.

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11. CONCLUSION A Referral Automation System is a sophisticated web-based application that involves several disciplines. It formalizes the viral marketing process for referring purposes and facilitates peer-to-peer marketing for seeding purposes. By deploying a Referral Automation System from within their own corporate web site, companies can leverage the investment made in their web site by turning it into:

A lead generation system that generates qualified leads through referrals, and thus, increases revenues & profits, and increases market share & market penetration.

An online publicist that facilitates word of mouth through different channels, and thus, increases

mind share and stregthens the brand.

A loyalty system that incentivises referrals, and thus, decreases sales costs and cycles. A Referral Automation System must cover many different functions including most importantly the capability of referring, keeping track of referrals, incetivising referrals, collecting feedback, defining rules, analyzing traffic, taking the pulse of different channels, analyzing social networks to identify the Mavens, Influencers, Connectors, and Spreaders (MICS) to help simulate, launch, monitor, and measure viral marketing campaigns, and interfacing with other enterprise applications such as CRM, ERP, Sale Force Automation, and Recruiting Automation. In addition to such unique referral functionality, a Referral Automation System must be built with state-of-the-art technology that offers industrial robustness with advanced features such as rich user experience and high scalability. A Referral Automation System should be a web-based application and preferably a hosted one. We have suggested that with a Global Referral Network that aggregates a number of Corporate Referral Networks, referrals could become an effective bellwether for trends. Finally, a Referral Automation System could be used to empower not just corporate web sites but also classified and auction advertisements as well.

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Tel: (949) 861-2341Fax: (949) 861-2342 david.saad@calibra.comwww.calibra.com