Renting referrals plays a large part of being a member at Neobux. It’s almost like managing a small business, but thankfully way easier! Think of your rented referrals as “employees”. When one of your employees is not pulling his/her weight (not clicking on enough ads) – it’s time to let them go and hire a replacement (or in Neobux terms “Recycle” that rented referral). That’s pretty much all there is to it, now all we need is a strategy to optimize managing our rented referrals!
Associated Costs and Break Even Points
Let’s first work on some basic numbers. As you would imagine, when you let an employee go, you have to pay a little severance pay. In Neobux terms, this is a fixed cost at $0.07 per referral you choose to recycle. There are 3 ways you can recycle a referral:
- Pay $0.07 from your rental balance
- Use NeoPoints to pay for the recycle, at a current cost of 92 NeoPoints per referral
- Allow them to auto recycle after 14 days of inactivity at no cost
If you are new to Neobux and have only a handful of rented referrals, NeoPoints can be a great way to recycle. When you acquire more than say 50 rented referrals though, it becomes quite difficult to amass the NeoPoints required. The most common way of recycling referrals is to pay the $0.07 from your rental balance.
Now for the break even points. These will vary based on how many rented referrals and what type of membership you have. This strategy will focus on standard and golden memberships:
|Revenue per Click||BE Clicks Per Day*|
|0 -> 250||$0.2000||$0.0050||$0.0100||1.33||0.67|
|251 -> 500||$0.2100||$0.0050||$0.0100||1.40||0.70|
|501 -> 750||$0.2200||$0.0050||$0.0100||1.47||0.73|
|751 -> 1000||$0.2300||$0.0050||$0.0100||1.53||0.77|
|1001 -> 1250||$0.2400||$0.0050||$0.0100||1.60||0.80|
|1251 -> 1500||$0.2500||$0.0050||$0.0100||1.67||0.83|
|1501 -> 1750||$0.2600||$0.0050||$0.0100||1.73||0.87|
|more than 1750||$0.2700||$0.0050||$0.0100||1.80||0.90|
*Ignores any AutoPay and AutoRenew discounts.
Developing a Rented Referral Strategy
Now we know our costs, and how productive our “employees” need to be to make our business profitable, we can develop a rented referral strategy to optimize revenue. We need to find a midpoint between:
- Recycling too much – spending too much on recycling can destroy our profits
- Recycling too little – allowing our clicks p/day to fall too low will put us in the red too
Firstly, you have to understand that any rented referral strategy is going to be more successful some days than others. Why? Because you are applying a static strategy to a dynamic environment. Not everyone is going to click 4 ads for the first 5 days, then 3 ads the next 10 days slowly decrementing to zero.
What we can do, is play the probability game to keep our revenue positive. The following bullets act as a good starting point when developing your rented referral strategy – you can tweak them as you seem fit, but they have kept me in the positive even as a standard member where break even points are considerably higher:
- Recycle any inactive referral that hasn’t clicked in 4-5 days. Probabilities are high that the referral has lost interest. I have seen apparently inactive referrals bounce back to life after 3 days and be generally good clickers. Even employees need a little break from time to time!
This one’s easy to workout in your Neobux Dashboard. Login and click on “rented” in the menu on the left to bring up your list of rented referrals. You can click on “Last Click” at the top to sort by time of last click:
I have a lot of “No clicks yet” because I just rented yesterday. Scroll down until you see the first date:
I would recycle the one highlighted in yellow as this one has been inactive for 5 days.
- Never recycle a referral that is above your break even point. I know, it’s tempting to bring your average up, but you could recycle and get an inactive referral, or one that performs worse. This is one of those times where people are too aggressive with recycling rented referrals, and a popular way of eating up profit with needless recycling.
- Recycle any referral that falls below 20% of your break even point and that has been a referral for at least 10 days. Weed out the low performers that are losing you money!
This one requires a little elaboration. This time you will sort by average, and find the referrals that are below your break even – this varies based on your number of referrals and membership level. Fortunately, the first step in this rented referral strategy will ween out most of these, this one acts as a “double-check” to make sure we don’t miss any low performers.
I’m in good shape! Apart from the referrals yet to click, my lowest average clicks per day are 1.5. My employees are doing great!
- Recycle daily if possible to ensure we are not leaving referrals that should be recycled any longer than necessary in our account – and missing out on revenue from a new rented referral.
There’s no point to having a rented referral strategy if we don’t attempt to gauge how successful it is. To calculate accurately profit we need to take into account AutoPay and AutoRenew. As you know, when we use both of these features, we lower the cost of the referral per month.
First we need to figure out how much the referral actually costs. This can get a little complex. Say for example if you have AutoPay on at a 15% discount and AutoRenew on at a 5% discount. Some referrals may renew with a 5% discount, some might click ads and invoke a 15% discount. Trying to figure the math and how to pull the info from Neobux can give you headaches!
So, here’s what I do. I use AutoPay so I’m guaranteed a 15% discount when someone clicks an ad. I typically manually renew referrals if and when their rental period remaining gets down to 5 days or so. I recycle for 90 days which gets me an 18% discount. I do have AutoRenew set just in case I miss a referral. Never let a referral expire!
Bottom line is, I am guaranteed at least a 15% discount on the base break evens – so a 15% discount is what I take into account when determining profit. Let’s look at a practical example.
One other point I want to stress, one way or another, you re going to incur a cost for a full days rental for every rented referral you have regardless of if they click or not. Let’s explain this by understanding what happens if a referral clicks, and if they don’t. This assumes AutoPay is turned on which I’m sure it is, right? :
- If a rented referral clicks – you pay for that days rental via AutoPay
- If a rented referral does not click – you pay for that days rental, because you lose a days rental
A lot of people just look at the AutoPay value and subtract this, but this does not take into account the renewal fee that is going to hit when the referral expires, assuming you either manually recycle or have AutoRenew switched on, which is advised since you don’t want to lose rented referrals, particularly if you are a Golden member.
The initial purchase of referrals I treat as a “Capital Cost”. As such, I calculate my break evens on the costs going forward, which use the AutoPay and AutoRenew discounts. In accounting terms, I’m not calculating my ROI, but daily operating profits going forward. Let’s put all this together into a practical example:
Let’s say I am a standard member with 300 rented referrals. My average ads clicked from rented referrals at the end of the day is 2.0. I recycled 5 referrals today. So how much money did I make?
Revenue is simple. Average clicks per referral x rented referrals x revenue per click2.0 x 300 x $0.005 = $3.00
My expenses are: AutoPay or AutoRenew rate applied to all rented referrals (15%/18% – I use 15% to be conservative) + Recycle fees(300 x $0.0057) + (5 x $0.07) = $2.05
Total Profit = $0.95.
Out of interest, if I were a golden member, my profit would be double as my revenue per click doubles while all other variables remain constant – $1.90.
My math is spot on, but let’s make sure. Here is the break even points with AutoPay and AutoRenew discounts applied:
|Revenue per Click||BE Clicks Per Day|
|Referrals||Cost Monthly||After AutoPay/Renew||Standard||Golden||Standard||Golden|
|0 -> 250||$0.2000||$0.1700||$0.0050||$0.0100||1.13||0.57|
|251 -> 500||$0.2100||$0.1785||$0.0050||$0.0100||1.19||0.60|
|501 -> 750||$0.2200||$0.1870||$0.0050||$0.0100||1.25||0.62|
|751 -> 1000||$0.2300||$0.1955||$0.0050||$0.0100||1.30||0.65|
|1001 -> 1250||$0.2400||$0.2040||$0.0050||$0.0100||1.36||0.68|
|1251 -> 1500||$0.2500||$0.2125||$0.0050||$0.0100||1.42||0.71|
|1501 -> 1750||$0.2600||$0.2210||$0.0050||$0.0100||1.47||0.74|
|more than 1750||$0.2700||$0.2295||$0.0050||$0.0100||1.53||0.77|
What I’m saying here, is that for this particular example – by break even point (ignoring recycle fees) is when my rented referrals click an average of 1.13 clicks per day. Let’s see if this balances.
- Revenue = 300 x 1.13 x 0.005 = $1.7
- Expenses = 300 x 0.0057 = $1.71
Some small rounding difference makes up the penny difference here, but we balance. Again, remember we are ignoring recycling fees here, this is just to check our AutoPay/AutoRenew discounts are being properly accounted for.
Rented Referral Strategy Conclusion
I want to reiterate the fact that no single static strategy will work the same every day in a dynamic environment such as Neobux. One day you will make more, one day you will make less. However, following the tips laid out in this strategy should you see in profit month to month.
It’s important to follow some kind of strategy for recycling referrals, but equally as important to run the figures to make sure you are in profit. To not take this step, is like setting yourself a budget, and then not caring about what you spend!
I would encourage you to experiment with the variables in this strategy. For example, what happens if you recycle rented referrals if the are inactive for 4 days or 6 days instead of 5 – but if you do, stick to the same strategy for at least a month, and then compare figures.
I would certainly appreciate any feedback, contrasts and comparisons to your own strategies! Please feel free to discuss them in the comments area below!