Reason: I had a fascinating note from Leonard Lee of Lee Valley Tools in response to the first column, and I wanted to let this legendary Canadian entrepreneur set the record straight in public.
Lee Valley put a lot of effort into learning how best to “encourage” satisfied customers to provide names of friends or colleagues who might be interested in his company’s products. But if you pay too much for referrals, the quality of those opportunities falls off fast.
Lee's solution: Lee Valley offered to give $5 to a charity (Nature Conservancy of Canada) for every name and address it received who ended up becoming a paying customer. As Mr.Lee points out, "This establishes a nebulous but real customer benefit, and forestalls someone sending us the Winnipeg telephone directory in hopes of earning a small fortune but at great waste to us.”
You can read the full column here: