How to run a referral or affiliate scheme for your small business

Marketing is essential for business growth, but creating a successful advertising campaign can be time consuming and may put a strain on an already tight small business budget.

We’ll take a look at two cost-effective alternatives to traditional marketing—referral and affiliate schemes—and how your small business can use these programmes to help your brand reach a wider audience and boost your sales.

What are referral programmes?

A referral programme is all about leveraging your existing customer base. By offering an incentive, you inspire the people who already love your brand to recommend it to friends and family. Referrals are often far more powerful than traditional advertising: since 84% of consumers trust personal recommendations, referrals lead to a 30% higher conversion rate than other marketing channels.

Choose an incentive

A tempting incentive is what nudges your customers to spread the word about your business. Possible rewards include discounts, credit, gift cards, free shipping, and complimentary gifts. Identify what would appeal to your customers the most, and offer something of value to both the referrer and their friend for the greatest effect.

The value of the referrals should offset the cost of the incentives—keep your eye on the return on investment and make changes if necessary.

Advertise your referral scheme

Make sure your customers know about your referral scheme. Use all your online channels, including your website, your mailing lists, and your social media accounts, to promote your offer. Offline, consider including a “tell-a-friend” message on your receipts, or using leaflets and posters.

Make the process simple

The fewer clicks it requires, the more likely your customers are to get onboard with a referral scheme. Make sure the process is as effortless as possible and that customers are clear on what they need to do.

If you’d prefer someone else took care of all the technical details, look into using a dedicated referral solution. Many of these can also provide useful metrics to make fine-tuning your incentives easier.

What is affiliate marketing?

Affiliate marketing is another way to harness ‘people power’ to reach a wider audience for your brand. Also known as partnership marketing, affiliate schemes allow individuals to earn a commission for bringing new customers to your business. The marketing strategy is growing in popularity with an average of 23% of sales generated by affiliate partnerships. It is a major source of income and revenue respectively for social media influencers and the brands they promote.

Pick your affiliate strategy

Take the time to consider which specific outcomes you’ll want to pay for. Should each click to your website generate a commission? Or do you only want to offer a reward whenever an affiliate’s efforts lead to a mailing list signup, a software download, or a completed purchase?

How to find affiliate partners

Knowing the best ways to find effective affiliate partners is an essential step in creating a successful affiliate partner scheme. Investing a bit of time and money to research, identify and incentivise the best possible affiliate partners will help your affiliate scheme get off on the best possible foot. Below are our tips for finding suitable affiliate partners.

Recruit independently

The simplest way to recruit affiliates is to create a sign-up page on your website. Quality trumps quantity though, and a screening process may be necessary to ensure that your new affiliates are a good match for your brand.

Headhunting is your best bet if you want to recruit top performers: research potential affiliate partners on social media and send targeted invites to relevant influencers with a loyal following.

Turn to a third party

Alternatively, join an established network or platform to access a great number of potential affiliates. Prices can vary considerably depending on whether the platform charges a one-off set up fee, or a commission on sales, or both.

Build your partnerships

The more you put into your affiliate marketing scheme, the more you will get out of it. Build effective partnerships by providing quality promotional materials and keeping your affiliates up to date on new products and other important changes. Finally, show your appreciation and motivate your affiliates to do their best by offering higher rates to those partners who consistently smash their targets.

Analyse and review

Tracking your results is crucial to the success of your affiliate programme. Keep an eye on quantitative metrics, such as conversion rate, to continuously evaluate your affiliate strategy. For comprehensive analytics on your programme’s performance, you may wish to invest in affiliate marketing tracking software that can automate this process, letting you focus on making improvements rather than tracking them.

With these tips in mind, any small business can start using affiliate marketing and referral programmes to generate additional income and reach new audiences with their promotional efforts.


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