Go From Zero To Hero Using Referral Marketing
If you’re low on money, you might want to consider using referral marketing to promote your business. How does referral marketing work? Basically, you use the general public to help advertise your business. They would do this through a special referral site that they would share with their friends and family. If someone buys through this site and/or signs up for the referral program, the original referrer would receive an incentive.This incentive can be anything you can come up with creatively, whether it’s cash, discounts, or free merchandise.
Now, there are two ways you can achieve referral marketing. The first involves utilizing it as a secondary form of advertising, especially for time-sensitive promotions. You try to create as much buzz as possible before your promotion ends. The second method involves incorporating referral programs into your business model.If you do this, technically your business becomes an MLM company, which stands for Multi-Level Marketing.
I have an idea of what you might be thinking. Isn’t an MLM a glorified pyramid scheme?No, but MLMs can go sideways if they’re not done correctly. Specifically, this means that they rely solely on referrals for their business.Not one legitimate sale of products or services are incorporated into their business model.
12 Daily Pro is a good example of such an entity.This was an autosurf website that generated millions of dollars. However, over 95% of these profits came from referrals who invested their own money into the program; very little came from legitimate business transactions.Consequently, older members were getting paid from the new members’ money.But as the scheme raged on, many new members weren’t receiving dividends because there weren’t enough replacement leads to keep the pyramid going.
This is the result of pyramid schemes… even those that last several years, (like the Madoff scandal).The Madoff scandal was a ponzi scheme, which is a way more complex than your everyday pyramid scheme.Any way you look at it, the concept is the same.
So, to avoid these problems, always make sure that you’re paying referrals from profits of your business makes.If you find this is difficult to do, consider compensating them on an affiliate basis, where they would receive a commission only if their referrals actually convert into a sale or new customer.
In conclusion, if you can’t afford an elaborate advertising campaign, consider utilizing referral marketing.Implementation is a snap, and once it’s established, you’ll have tons of people promoting for you with no cost to your business.