There is a lot of hoopla around affiliate programs. The savvy business owner who has taken the time to create an online presence for her offline retail establishment doesn't see the need to create an affiliate program. The problem is really in the language: storefront owners have a better understanding of "customer referrals" and "loyalty programs" than they have of the concept of "affiliate" programs. If you have added an ecommerce component to your offline business, an online customer referral system becomes your secret weapon to generating more traffic and, ultimately, more sales.
Removing The Language Barrier
Let's remove the language barrier and apply the notion of affiliates to the standard business practice of rewarding customers for their priceless loyalty. To set the stage for the discussion, I'll give you a definition of affiliate marketing, as seen through the eyes of Ryan Roxas.
In simple terms, affiliate marketing is an agreement between one website (the merchant) and another website (the affiliate) whereby the affiliate refers visitors to the merchant's website. The merchant's website usually sells products and/or services and pays the affiliate a fee for referring that visitor.... These merchant sites pay the affiliates a commission for each referring visitor that they send. This commission can be generated in different ways, such as when the referring visitor buys a product, fills out a form for a lead, or just clicks on a link. -- Ryan Roxas, Affiliate Marketing Blueprint
That seems like a straight-forward relationship, doesn't it? Although this definition by Roxas is about affiliates, when we switch a few words around, we can see how it applies to customers and cheerleaders of your service or product.
Try this on for size... We'll personalize it a bit:
In simple terms, customer referral marketing is an agreement between my store and my customers (or my practice and my clients) whereby my customers recommend or refer their friends, colleagues, family members, or even their customers to my online (or offline) store. In return for my customer's referral -- that results in a sale (or series of sales) -- I agree to pay my customer a commission, or give him a discount, or provide something of value.
Of course, this definition can be modified to fit any business model. It can be worded for the specific circumstances and tailored to appropriately represent the relationship between you and your customers.
Psychological Impact of A Customer Loyalty Program
Online customer referral programs work for small businesses, too. While you might not have instituted a big-idea customer loyalty program for your own online business yet, you might already be participating in such a program on a personal level. For example, if you buy office supplies online from one of the chains like Office Depot, Staples, or Office Max, you probably created an account in order to give them delivery information and pay for your purchase.
Many times, the account you create automatically sets you up to participate in their rewards or customer loyalty programs. You are assigned a special code and possibly a unique website link that you can give to your friends and colleagues so when they place an order, you'll get credit for their purchases. This "credit" can translate into reward points, discounts, or some other form of a "thank you!" from your favorite office supply company.
Whether or not you ever refer anyone using your special code, you will likely refer someone using nothing more than word of mouth. The psychological impact of being a part of something that rewards you for being loyal is very, very strong. So strong, in fact, even if you forget your code, you won't likely forget your favorite supplier.
Wouldn't you like your customers to feel the same way about you, your product, your service?
Big businesses have the best ideas. They have the money, the staff, and the resources to implement and maintain systems such as customer loyalty and referral programs. But isn't it wonderful when technology allows small business owners -- like you and me -- to level the playing field?
Will An Online Customer Referral System Enhance Your Marketing Efforts?
How can you determine whether or not an online customer referral system will enhance your marketing efforts or bring more foot traffic into your offline establishment or garner more visitors to your website or online store?
One factor to consider is whether or not you can segment your customers into one of several categories:
- internet savvy customers who purchase at your offline location but would just as easily make their purchases online
- customers who run their own offline businesses, particularly if they also have an internet presence for their business
- customers who have their own website (even if just personal, FaceBook, MySpace, or similar) and those who are also writers, bloggers, reviewers
- customers who specifically ask whether or not you have a referral program, affiliate program, rewards system
Not to be forgotten or dismissed are persons who are NOT customers, but who have contact with you and/or your business online. This includes anyone who thinks your product or service fits nicely as something they can offer their own customers, especially industry writers and bloggers.
Dividing both your customers and others you come in contact with into a few key groups helps you think about the tools they will need to help them refer their friends and business acquaintances to your online or offline establishment.
Do you see the potential for creating your own online customer referral program?
Give Them An Easy Way To Send Traffic Your Way
Sometimes a customer or a friend just wants an easy way to share your great products or services with others. These are the best fans or cheerleaders you can ever have. You might not realize it, but bloggers and writers who come across your business in their local area are more than willing to send potential customers your way.
When I write certain types of articles, I am overjoyed to include a link to a local service or retailer if they have a website.
What is even better is when a business owner in my neighborhood has a customer rewards or affiliate program. For example, I recently wrote a blog posting while sitting in one of my favorite local coffee shops. The article had some elements that made me think about my surroundings. I did a quick search for the coffeeshop's website so I could include a link back to it. Unfortunately, the coffeeshop did not have a rewards or affiliate program. As a matter of fact, it didn't even have a website! (To be fair, they did have a Twitter account, so I linked to that.)
As a business owner with an online presence, you really want to give cheerleaders, fans, and customers an easy way to send traffic your way. A customer referral system, or an affiliate management program is the best solution.
Benefits of An Automated Customer Referral System
What if the entire process was automated? With an automated system, you can easily see who has recently made referrals. You can see where your traffic is coming from.
- You can print out coupon codes or referral codes, then physically give them to your customers, friends, colleagues -- or email them.
- Friends, family, and colleagues could easily cheer you on.
- Customers, vendors, and fellow business owners could send others your way and get credit for it, if they so desired.
- Bloggers could easily drop a link to your business into an article they're writing.
- Website owners could gather referrals and earn whatever rewards you offer without a major outlay of precious time.
The only way to manage all these options is to track it with an automated solution. Automating your referral system is definitely the way to go!
It's Easy To Get Started
You can see why adding a customer referral affiliate management system makes good business sense, whether or not your offline business includes an online component.
Once you have segmented your customer list and considered the benefits of creating an online customer referral system, it's easy to get one ready to roll. You don't really need an online store to create a customer referral or affiliate program online -- but sometimes this functionality is already included in your ecommerce system. There are numerous stand-alone solutions, too.
Looks like it's time to start researching your available options!
About this Author
Now that you have a better understanding of the reasons to add an automated customer referral system, let's take a closer look at the tools you need to make it happen. My Power Up Your Online Business is a great place to start, especially the article on how to research and select the best ecommerce solution for your business.
Vernessa Taylor, Internet Coach, specializes in assisting local business owners with selecting and using the right web tools to level the playing field. Visit LocalBusinessCoachOnline.com for smart tips, techniques, video tutorials, and a free copy of her Top Secret Personal SwipeFile, chock full of the best tools for your business.
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