Referral Program Strategies (part 2) | P2P Lending, Peer to Peer Lending, People to People Lending

I wasn’t planning on this being a 2 part post, but I got some great comments and I wanted to republish and respond…

Great idea… I am unfortunately no more versed in this area than AdWords… But I bet someone with experience could do very well with this strategy.

Next a pair of comments from the brothers Tom and Matt that run a great new Prosper blog — Prosper Lending Review (I hope they keep it up… so far I like what they are doing):


My brother and I created a Prosper blog. While the primary purpose is not referrals and most people are already Prosper members we did include some referral links and had one person sign up so far as a referral. I also got one referral who is a family member in addition to my wife who signed up and loaned out $50. I think in general it is difficult to obtain referrals because it is a difficult process. First, they must sign up, get their identity verified, get their bank account verified, transfer money (which could take up to a week), bid on a loan, win the bid for the loan, have the loan complete the verification process so that it is fully funded. All of this has to be completed within 90 days, and I think there is a lot of attrition at each step in the process. Not trying to discourage anyone, but just trying to be realistic about the process.


I thought about using Google Adwords. I have some experience and have managed thousands of dollars worth of Google Adword campaigns. Ultimately I decided that it not likely to be worth the money spent. Let’s assume that you spend the very minimum for each click – 5 cents. To break even, 1 out of every five hundred that click on your ad have to sign up and complete the process as Matt described above. I think that you are unlikely to get conversion rates that high. In addition, it’s going to be difficult to keep costs to 5 cents an ad in the competative loan ad market. I know that nonattender is running some googleads though and after the first week he was a referral leader – #2 I think. It would be interesting to see what his results have been and how much he has spent in the process.

I agree that there are holes in Prosper’s funnel, but as a blogger that has been attempting to make money from day 1, in 8 months I did more revenue in one month of the Prosper Referral Program ($125) than from any other single source in a single month. Granted I spent about $100 in an Adwords experiment, but I have over 50 referrals. 5 of which are already lenders.

I think the 90 day window is sufficient to get a referral through the funnel. Do you really think the average time through the funnel is greater than 3 months? I don’t think so… It took me less than 2 weeks to get into my first loan.

I have been tracking my referrals with ProProsper Referral Tracking and I believe I will get a few more through the funnel before I am done.

All that being said, I am admitting that I am an AdWords novice. I think someone who knows what they are doing would do very well targeting lenders. Good borrowers are more expensive to target, but I think there are quite a few cheap sources for lenders referrals.

Leave a Reply

Your email address will not be published. Required fields are marked *