Online Marketing With Referral Programs

Continue to Part II: Referral Reward Programs»


Referral programs are any type of program in which a company pays employees, customers, or other companies a commission or flat fee for referring others to them. For example, Google has a referral program which pays websites a fee for getting other websites to sign up with their AdSense program. Referral programs are much like affiliate programs except referrals can be for customers as well. Online stock trading companies typically offer cash rewards to members who recommend friends to their services. These programs function on the premise that customers and employees are members of a team, so treating them as such helps referral programs gain traction. Customer service and testimonials are invaluable.


The costs for a referral program are whatever you decide them to be, but obviously should scale to the size of what it is you are selling. Some businesses offer as much as 100% of the sales for referrals, because the market is so tight and they wish to remain competitive. For most people, obviously, that is too much, but the amount should be worth the time of the people who are referring.


Setting up a referral program is quite easy. Simply putting some text outlining the process and explaining the rules is all that is needed. Joining a website that is a directory of referral programs is a great way to speed up the process and get some signups quickly.

Action Plan

Coming up with the rules and qualifications of a referral program is really all that is needed. The internet is full of examples of this system, so reading and researching different methods is mostly all that is needed. A good deal of time should be spent studying the economics of different systems, as some incentives work better for certain types of systems. You should decide if you are going to pay per lead, per sale, and just what exactly constitutes a referral to your company. After all this is done, you should market your program, and perhaps think about joining a larger program, such as ValueClick to get the word out about your new strategy.

Continue to Part II: Referral Reward Programs»

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