Referral Programs

Referral programs have a couple different sides. One side of a referral program
is the side on which you make money. That’s for putting referral buttons
on your Web site.
What if you flip that around and create your own referral program where you
pay visitors to share your site with others? You can do that — and should —
if you really want to build a sizable flow of traffic to your site.
Creating a referral program isn’t too difficult. The first thing you need to do is
determine what you can afford to invest in the program. Typically, those who
refer your site are paid anywhere from about a penny-a-click to as much as $5
per click or more. Some referral programs promise a flat fee for any referral
that results in a purchase.
Your budget is the determining factor here, but remember this: The more
you pay, the more likely others will want to refer your site to their site visitors.
They’re sending traffic away from their site to yours, so you must make
it worth the referrers’ efforts.
Remember that for a referral program to be effective, it should also be
simple. If you’re telling people you’ll only pay them a referral fee if they send
someone to your site who then makes two purchases over a 60-day period,
unless your site is truly amazing or the products that you offer are completely
unique, not too many people will refer their visitors to you. It’s just
too hard for them to earn a reward for that referral.
A referral program also has to make it easy for referrers to be connected to
the people that they refer. A simple form that includes a Referred By box is
okay, but it’s only as effective as the memory of the person filling out the
form. A link that connects referrers to your referral program so that you can
track who they refer is much more effective for the people who are spreading
your name around.
Setting up an easy-to-use referral program might be more difficult on your
end, but it’s worth the investment. The less work that someone has to do to
refer people to you and collect a reward for that referral, the more likely he’ll
use your referral program.
Amazon.com has a referral program that’s an excellent example of what
really works. They provide all the tools that users need to refer others to
Amazon products. All the user has to do is plug a piece of code into her blog
or Web site. Amazon and the visitors clicking through the referrals do the
rest of the work.
Now, I know you don’t have the budget that Amazon has, but you should be
able to get the technology you need without having to break the bank. A
quick search on Google turns up referral marketing systems that are fairly
cost effective. For example, ReferralBlast (www.referralblast.com) is an
easy to use program that offers four different levels of referral programs —
from a basic program to a highly customized program — that range from $99
per year to $999 per year. Another program that’s available, and that is fairly
easy to use, is ReferralSoftware.com (www.referralsoftware.com). This
software — unlike ReferralBlast — allows you to set up referral programs for
a one-time fee of $299, after which you never pay another fee.