Why DC Once Gave A $30,000 Referral Bonus

If you Google “David Cancel Referral Bonus” you’ll find a few interesting results.

Like the time he gave out $10,000 referral bonuses for engineers. And the time he bumped it up to $30,000 (that’s not a misprint).

But at Drift, David wanted to do something different — and that’s what we’re talking about on this episode of Seeking Wisdom.

Why DC Gave a $30,000 Referral Bonus | Seeking Wisdom Podcast from Drift on Vimeo.

Time Stamped Show Notes:

01:28 – Launching the new Drift Referral Program

01:50 – Why you should care about the new employee referral program

02:03 – Previously tested referral programs

03:15 – What is the Drift Referral Program?

04:10 – Choosing an experiential reward instead of money

05:58 – The logic behind investing in employee referral programs

07:52 – The success of the $30,000 referral bonus

10:00 – The value that comes with the high standards of internal referrals

12:40 – Dealing with a negative podcast review

14:20 – Get your Hypergrowth tickets while you can at https://hypergrowth.drift.com/ Promo code: Seeking Wisdom

3 Key Points:

  1. Employee referral programs are one of the best ways to recruit top talent.  
  2. You should try unique referral bonuses to incentive your team to get their friends in the door — but cash isn’t always king.
  3. Focus on people and experiences to get the best results in your business.

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Follow David (twitter.com/dcancel) and Dave (twitter.com/davegerhardt) on Twitter.

Come hang out with us at seekingwisdom.io and on Twitter @seekingwisdomio.

Learn more about Drift at Drift.com.

Episode Transcript

Dave: Today on Seeking Wisdom, we’re talking about we launched a brand new program here at Drift last week.

David: Remind me.

Dave: The Drift Referral Program.

David: Oh, yeah.

Dave: Are you ready to have this discussion?

David: Let’s do it.

Dave: Okay. We thought this was something different.

David: And want to talk to you about it.

Dave: Maybe they do. It’s on the wiki.

David: Is it on the wiki? Oh yeah.

Dave: 13 people had liked it. You and Keith, you sent something out last week. We have a new employee referral program. If you’re listening to this podcast, you’re like why do I care about Drift’s employee referral program?

David: Tell them why.

Dave: We’re going to tell you why. Because you’ve tested, you’ve run the gamut of all types of referral programs. What have you done before?

David: I’ve done $10,000 referral programs. We hired someone.

Dave: 10 Gs?

David: 10 Gs.

Dave: No strings?

David: No strings. They have to be there for 90 days.

Dave: Two companies I’ve been at before have done referral bonuses that were like $2,000. After tax, $2,000 is nothing.

David: That was my first. Then I went crazy one year and I went to 25 Gs.

Dave: I wonder if I can Google this, David cancelled referral…

David: 25,000.

Dave: 25 Gs. It’s out here. There it is. Referral bonus hits. It was 30,000. 30,000, refer a software developer. You get 30,000. That was external too. It wasn’t just internal. You’re paying a complete stranger.

David: Absolutely.

Dave: Damn.

David: We got a ton of referrals. When I did that, we can go into the story of what happened when I did that. But I did those. I’ve done every, I’ve done internal, external. I’ve done money. I’ve done GIFs. I’ve done everything you could think of. But at Drift, we’re taking it up a notch.

Dave: We’re taking it up a whole notch. Tell us about the Drift referral.

David: That Drift referral program which is only internal today, but we’re thinking about making it external, people, is if you refer someone, we hire them. After 90 days, we will send you, anywhere in the US, two tickets. We will pay for your hotel, for your airfare, for your trip to go anywhere in the US. No strings attached and have an amazing three day experience.

Dave: I love it. Here is the context. This is from the post. We want everyone to have a sense of ownership, which means we all care about having great colleagues of course. With that in mind, we want to revamp the typical referral program and make ours feel drifty. That means we want you to have an experience. Keyword, experience.

David: That’s what we believe in.

Dave: Experience equals happiness, not money. I’m sure when you guys thought about this, you thought about money. You said, “Sure, okay.” We want to have a referral program because people matter the most but then you decide not to make it about money.

David: Yeah. Because we thought when it was money, it cheapened it. It felt like you were selling somebody. We’re always thinking about experiences at Drift. We want things to feel special and we’re like, “How can we make it feel special?” Not being just cash, but we do something special. We thought about doing different things, whether it’s buying objects like win a new car, do things like that.

                    And then we thought like, “Wait, the best experience that fits with Drift is for someone to be able to go with someone else anywhere they want for a long three day weekend.” We thought that feels like Drift.

Dave: Yup.

David: That feels like us.

Dave: Trip anywhere in the US for two people, flight, hotel. Has to be in the role for 30 days. But the key thing that makes it different though is the focus on people.

David: People and experiences and we’re thinking about we just started it and we’re thinking maybe we’ll extend it later, maybe it will be anywhere in the world.

Dave: I like this.

David: The other thing that was key here, by the way, was this is again only for internal Drift people today. We might extend it outside, is that anytime that we have [00:05:35] days here at Drift, if you were to do this, anytime that you’re away doesn’t count against [00:05:41].

Dave: It’s really a day and a trip?

David: And a trip.

Dave: I like it. It’s all about experiences. Let’s talk about what you’ve done in the past a little bit, though.

David: Some of the stuff we’ve done in the past, we’ve done the 10,000, then 1 year. That worked pretty well.

Dave: Explain to me, I have no idea if it should be $1,000 or if it should be $2,000 or if it should be $10,000, if it should be $30,000. What’s the actual logic about why would a company even pay? I don’t understand how it works actually. Why would a company even pay money for somebody?

David: They usually don’t across worlds. They might do it for specific, hard to find roles and then the justification there is we’re going to use an external recruiter, an external recruiter would charge us some percentage of the person’s salary for the first year.

Dave: Typically, a bigger role. You’re paying up to get that role. What do they take? Like 10% or 20%?

David: 20% is usually what you…

Dave: Damn. 20% of somebody’s salary.

David: Yeah, take home salary for that year.

Dave: That’s the cut for a recruiter?

David: Yeah.

Dave: That’s like the best sales job.

David: And then they’re not guaranteed. They usually don’t guarantee those people. It’s just a flat fee. Many companies rely heavily on external recruiters. We never have. We’ve always been internal recruiter only because we find that we can control quality better. There are a whole bunch of reasons. We have a better candidate experience that way.

                    Typically, that’s where you’re paying, in that world, that’s how a company can justify and say, “We’re going to pay a recruiter this much anyway. Why would we pay that internal?” That’s how I justified going from typical $1,000 and $2,000 going all the way to $10,000 and then ultimately going all the way to $30,000.

Dave: Right. In that role, it was an engineer. Engineers are expensive. 30,000 for engineer, okay that makes sense. But then also you take that, because a recruiter is not going to say refer your people to me. They’re like, “No, I’m a headhunter. This is my job.” You basically flipped it on everybody and you said, “A, it’s more but we’re turning on the power of this network.” Try to get everybody to talk about it.

Now, I’m looking and I Google this, you were on CNBC, Yahoo. Obviously, there was a ton of press around it.

David: Totally. We got thousands and thousands of…

Dave: Did you hire people from that?

David: We did hire people from that. It ended up being from that $30,000 one, which we only did for less than a year. I don’t know, it was six to nine months. I could count in my one hand the people that we hired and also worked out through that thing but we think it was well worth doing it. When we did it, our CFO and COO at the time went bananas. Because I just did it. I just announced it.

Dave: You announced it. There was no proposal.

David: They were like, “What? What did you do?” They ran through the models and they said, “If we hire 50 people this year, 50 times 35…” I was like, “Dude, slow down.”

Dave: We’re going to hire one.

David: One, we get to choose who we’re going to hire. If he becomes too much of a problem, if we’re magically drowning of all these amazing people to hire, then we can filter it and we can rate limit it at the rate that we want to bring on.

Dave: That’s great. You’re making the decision instead of automatic $30,000 payment. You could get 1,000 people in the pipeline and decide you don’t want to hire any of them.

David: Any of them because they don’t work out. But we get that optionality. That worked out well. We’ve had some people come in, get referred to our internal recruited Keith because of this new program that we have. We have some people in the pipeline already.

Dave: Already?

David: Already.

Dave: Damn.

David: We just launched this and depending on how successful it is, we’ll probably open it to external.

Dave: Was it like the recruiters had too many leads when you did the 30,000?

David: Too many leads, too chaos.

Dave: Madness.

David: Too much.

Dave: They need lead scoring for recruiting.

David: Keith for the first who was our recruiter.

Dave: Was he there for this?

David: Yeah. He was complaining. He’s like, “This is not good. There’s too many.” Because he gets overwhelmed. He can only handle a certain amount. He was fluffed. He was freaking out. “I don’t know what to do.”

Dave: I’m interested in this because I just think about my bar. To me, work is really personal and really sensitive and so I have a lot of good friends out there. But I think the bar of who I would refer has to be so, so high, mainly because I spend so much time here. I wouldn’t want to refer somebody, I got to eat lunch with them everyday. That’s what I’m thinking.

David: Yeah, totally. I don’t know. I can’t think of anyone on the planet.

Dave: But is that why? Is that why the peer employee referral is so powerful because of what I just said?

David: This is social contract. It becomes easier the bigger the company is, it’s a social thing. That’s the other reason. The other thing that we wanted to do and the reason that we started that original internal referral program is that we wanted people to recruit their friends because everyone spends so much time at work, why not be around the people that you like the most. But it is hard. The people that you like the most might not fit your bar for what would be high performing in your environment so you got to choose wisely.

Can you choose one person? Do you have one person you would refer?

Dave: Right now?

David: You don’t have to name them but does anyone meet that bar?

Dave: Not that I could just text right now and say, “Come work here.”

David: I texted someone that we’re talking to.

Dave: Yeah, you’re right. There’s a couple texts. Actually, two people that I’m texting with right now that we’re actively talking to, they came to me. I said, “I heard you’re hiring for x. Are you hiring for x?”

David: Wow.

Dave: The inbound. The inbound leads. Inbound leads are the good leads.

David: Inbound leads but he’s a man of honor.

Dave: I’m a man of honor.

David: You didn’t just say like, “Oh, I just brought these in. Hook up the trips.”

Dave: No. I don’t want trips. I want good people. I’ll take the trip. Lia’s listening to this podcast. She’s like, “Take the damn trip.”

David: Two trips.

Dave: We’ll give Annie the DC for the weekend.

David: Let’s go. We’re out of here.

Dave: I don’t know. Work is such a personal thing for me. The bar has got to be really high.

David: I can’t wait to see who you refer.

Dave: Got to see who I refer. Lia’s going to be tossing a bunch of names.

David: Totally.

Dave: Trying to win this trip.

David: liawantstogoonatrip.com. Let’s make it happen.

Dave: Has a whole website.

David: You know what to do, people. This morning, I woke up, early morning, I’m an early riser, up at 5:00AM.

Dave: You haven’t listened to the podcast.

David: Guess what happened?

Dave: We got a one star review.

David: Our first one star review.

Dave: Our first one star review.

David: I thought it was broken. I was refreshing. I was like what is this one star?

Dave: Deb, sorry. Heartfelt.

David: What’s going on?

Dave: I don’t remember. Does that come up on this podcast?

David: No. Deb had a reaction. You can see it in the reviews.

Dave: It’s transparent.

David: It’s transparent. Said that I, I take extreme ownership. I said—what did I say?

Dave: You said eat less, move more.

David: Eat less, move more in terms of weight loss, to make a point on that things are obvious but we don’t do them. That these habits are hard. I said it one more time. I just said it again. She took offense to that and cited some studies. I don’t know. You can read it on the review. But you know what? Got to have them haters.

Dave: You got to have haters, but also, that was you talking about your own advice. You’re saying this is what I’m going to do.

David: I wasn’t preaching to people. I don’t know. It went the wrong way. That’s okay.

Dave: That’s okay.

David: But you know what to do. Leave a six star review. Talk to Deb. Say, “Deb, we hear you but we got love for Drift. We got love for Seeking Wisdom. Six star review. If that doesn’t work, leave a five star review. Go over this. We got a new Seeking Wisdom website coming. It is scorching hot. You’re not going to believe. It’s coming soon.

Dave: You’re not going to need to go to Apple podcast.

David: No. Forget Apple podcast. We got the new shit coming. But until then, go Hyper Growth, we’re almost out of tickets. We’re coming down the wire here. There’s almost no tickets.

Dave: I’m going to tell you. That’s not urgency for the sake of urgency. This house is going to be packed.

David: Packed. Okay. Fire marshals might kick us out. Just fair warning, fair warning to everyone.

Dave: That’s a fact. We put that in the deposit.

David: Register, we hope to see you September 25th. Leave that six star review. Shoutout Amy in the HDM. Come on people. Give up the love. See you soon.

Dave: Alright. See you.

David: Out of here.

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