Referral Bonuses

[Chris_13]

I was wondering if anyone offers their customers referral bonuses for bringing new clients to your service? Would you be willing to offer say a free month, quarter, etc. of service for those customers who bring you new business?

Would you be wary of a host that did this?

Chris

 

[The Hosting Team]

We don't do that, but instead have an affiliate program.

 

[Lesli]

If an affililate program that's restricted to current clients is considered a referral bonus program, then yes, we do that. We offer points which can be translated to cash or applied to hosting services.

 

[ldcdc]

Would you be wary of a host that did this?

Definitely not. I find it rather nice if a host decides to show it in a monetary way that they appreciate the the business that the customers bring in. And of course, it encourages customers to spread the word even more.

 

[chatterbox]

Many do this

A lot of hosting companies offer an affiliate program that rewards you for referring others. That's the biggest reason you see many internet marketers promoting hostgator. Hostgator has a very nice affiliate program so it makes it worth promoting them to the marketer's lists.

 

[Chris_13]

Setting up an affiliate program sounds like the way to go. I really do want to reward the folks that bring in customers as business is pretty good because of it. I also plan on making it retroactive for the folks who have been with me the full time (almost a year).

Do you have a recommend rewards/points structure?

Thanks for the great info.

Chris

 

[Lesli]

There are all kinds of things you could do:

* each referral earns a straight dollar value. Clients can request payouts when their "bank" reaches a certain dollar amount.
* each referral earns a "point value", and those points can be applied towards items in a "reward bank" you set up. (Keep the bank relatively small, though - and if I were you, I would not include branded items in that reward store. Branded gifts are great to send to clients for being with you for a long time, for referring (say) 20 clients, or something else. They shouldn't have to spend their reward money on something that's got a company logo on it.
* clients can apply their referral bonus toward hosting services, withdraw the money, or have it donated to a charity (or a community group) in the clients' name.

Don't make it too complicated - you'll only give yourself and your clients headaches. This is supposed to be a reward program, not another chore (both for you to maintain, and for them to choose their reward).

As to specific rewards/point structure...I'll leave that up to you to figure out. You can tailor it to best match the ability of your business to provide good rewards and not financially hurt itself, and also provide something your clients will really appreciate (or even have fun with). I can't judge those factors for someone else's business, though.

 

[ldcdc]

The first thing to do would be to estimate with reasonable accuracy the lifetime value of a customer. Once that's done, you should know what you can reasonably afford to offer as rewards/credits.

Unless the sum you reach to makes you able to pay the huge amounts that the affiliate market out there has reached ($100 per sale is not unheard of), I suggest you concentrate on your current customers and what they would want as a reward. Running a poll should give you relatively accurate data to work with. A link to the poll could be put in your staff's signature in tickets/emails when dealing with customers.

If some of the options are rather tied, affiliates could be allowed to choose the type of reward that suits them.

 

[The Hosting Team]

Unless the sum you reach to makes you able to pay the huge amounts that the affiliate market out there has reached ($100 per sale is not unheard of), I suggest you concentrate on your current customers and what they would want as a reward.

A good point. If you want to get the affiliate world to notice you, they will expect very large up-front payouts. On the other hand, you might be able to turn "amateur" affiliates - your existing customers, especially, into an indirect sales force by offering even a small commission.

 

[webcs]

I was wondering if anyone offers their customers referral bonuses for bringing new clients to your service? Would you be willing to offer say a free month, quarter, etc. of service for those customers who bring you new business?

Would you be wary of a host that did this?

Chris

We do this periodically based on current promotions. But YES. The key is, in our opinion, to but restrictions on such an offer. IE, what we do usually is offer these bonues's for trusted clients who have been with us more than 120 days. That takes care of someone signing up and then trying to pull something by ordering again.

We also do special situations with our largest customers where we offer RESIDUAL commissions ever month for the life of accounts. IE, the normal customer we host stays for years so we reward customers for years for the referral.

There are a lot of ways you can do it.

 

[webcs]

We don't do that, but instead have an affiliate program.

Who do you use for your affiliate program, we have had a BUNCH of bad experiences with affiliate companies that do not know what they are doing. And it seems to be getting worse out there. take care and thanks.

 

[dh_eddie]

I would be more comfortable offering the same thing as my affiliates earn for brining in a customer. But, offering one month free, etc.... isn't a bad idea.