Referral Programs and Affiliate Marketing for E-commerce
Jesse and Richie talk with the founder of OSI Affiliate Software about referral programs, affiliate marketing and what that can do for your online store.
- Referral programs vs. affiliate programs
- How to start a referral program
- Promote your referral program
- How to find influencers for your affiliate program
Jesse: Richie, happy Friday!
Richard: Happy Friday, back again!
Jesse: It’s a good day. It’s a good Friday here. We do all these podcasts all the time and we talk about all these different traffic strategies. There’s SEO, there are ads and there are all these different things, there’s always a little bit of work involved, right? But if you grew up with Justin Bieber, or grew up with Tony Hawk and old skateboarding buddies. Or you’re willing to share your business with their followers. Do that first. Don’t write content and do all these other crazy things we talk about, use the connections you have used, the people you have. Anyway, that’s the thought here with today’s podcast.
Richard: It’s about awareness first, right? You can’t sell someone something if they don’t know about you. And if someone else has an audience and they have to know and trust already. Totally agree. Like you sell skateboard products and Tony, it has to be relevant. Right? So it would have to be someone you don’t… It’s a Kardashian and you’re selling medical equipment or something like that.
Jesse: I’m sure people have tried that as well. (laughing) You never know. But ultimately, the goal of the podcast here is to help merchants out there. Feel free to cheat. You don’t have to do all the hard work if you know the right people. It’s not even about knowing the right people I should back up, it’s just building the network and if your product or your business is very shareable, then maybe that’s the right place for you to start.
Richard: Yeah. And I wouldn’t necessarily even call it cheating. It’s just a way to shortcut or hack a little bit. That’s definitely not cheating though. Don’t give yourself a hard time just for knowing someone else.
Jesse: Yeah, exactly. That’s not cheating. I’m just saying that you don’t always have to do. Everybody’s business is a little bit different. So hopefully we can introduce a concept here that we haven’t talked about on the podcast. If your business is perfect for referrals or affiliate marketing or influencers, listen up, we’re bringing on the expert here, Arlen Robinson, the
Arlen: I am doing awesome guys. Thanks for having me. How are you guys?
Jesse: We’re excellent. Excellent. Yeah, we’re hoping we’re going to pick your brain here and hopefully you can share some knowledge and some strategies with the Ecwid audience. You’re the
Arlen: Oh, very good question. I’ll try to make a long story short cause I’ve got to have a lot of history. OSI Affiliate Software or our parent company Omnistar Interactive actually was founded in 2000, got into this whole Internet game. Probably about two years out of college, I and a college buddy of mine saw the budding internet and we said: We want to be a part of that. We want to be on the side of the leaders where we’re a part of this whole technology enabled to help other people or the other businesses take advantage of it. So we decided to start our own web development company two years out of college. I worked for a consulting firm in the northern Virginia area for a couple of years. My business partner did as well. He worked for another consulting firm and on the side, we put things together, decided to start our own web development shop. I got a pretty nice contract probably about a year into us doing this on the side where we were able to go. I was able to go full time with it. Then my partner joined me shortly after that and went full strong, full force into it. We were developing all types of websites, custom websites, custom web applications,
Jesse: Gotcha. So you get to go on podcasts and talk to people like us and spread the word.
Arlen: Exactly. I’m an evangelist of referral marketing, affiliate marketing and all things word of mouth.
Richard: So Arlene, this is Rich. I have a question for you for at its basic level since Jesse was even referring to spreading the word at its basic level, for those that have not even heard the term affiliate software and even really know what that means. This is like going back, way back in time and Jim was a butcher and Jim had amazing meat at his butcher shop and Jane would come in and buy meat. Well, when Jane would tell Bill and Jill and all her friends, the butcher shop would get more business, but there was never really a way to attribute that. Well, maybe way back in the day cause they would say: Oh, they sent me in. They would refer to the name and possibly get free meat. You never know. It’d be interesting to go back and study the history of when someone finally first came, but good luck on that one. But it’s at its basic level. This is a way to exponentially scale word of mouth. Correct. It’s just a fancy way to say it is an affiliate. And with your software, we’ll get into it here a little deeper. There’s going to be some sort of code that when someone shares something, it basically refers back, this is the person who recommended and then they get some sort of percentage. Is that basic level?
Arlen: Yeah. At a basic level, you’re totally right, Rich. That’s exactly what it is. And as you mentioned going way, way back, word of mouth marketing has always been around, from just the early days of merchants providing services. There were always customers referring to others because they had a positive experience. Fast forward to today because of technology, businesses and solutions such as ours are able to get businesses, provide businesses with a platform so that they can track these referrals. And so businesses can incentivize people for referring others. And that’s really what it is.
Jesse: Yeah. That’s great. I think it’s good to bring it back, this is essentially word of mouth marketing, but it the incentive and the incentivizing is the helpful part because it can help it spread faster. You’re happy to tell your friend about the butcher, but if you knew you were getting a 10% off, you’re basically getting free meat for the next year, you might tell a hundred friends. This is the same way.
Arlen: Yeah, exactly. And one of the things that I’ve seen just being in this business for so long and being in the whole referral marketing and affiliate marketing space is that it’s more popular than ever now because we’re at a time and place in history where since things have advanced and evolved so quickly, people are educated, more people, more intelligent. And I think also people’s patience is a little bit less than back in the day because we’re just used to having things when we want it and how we want it immediately. So these days, traditional types of advertising, as you guys know, has really been affected. People tend to shy away from standard ads on of course TV, nowadays I don’t know who sits through any commercials on TV. Most people watch shows, they buy whole seasons either via Netflix, of course, there are no ads. And then we’ve got the cable services where they have all the
Richard: You mentioned there a couple of times a referral marketing and affiliate marketing. Is that just a difference in vernacular or is there something that people should pay attention to that? Is there actually some sort of difference between the two of those?
Arlen: There is a slight difference and I know I do use it interchangeably and you’ve probably heard a lot of people use them interchangeably, but the main difference is a referral program is when a business is getting customers to refer others to them. Their own customers that have used their products or services, they’re referring their friends and people that they know for an incentive. So that’s really what a referral program is using, utilizing your customers and leveraging them. And an affiliate program is when you’re reaching outside of your business, outside of your customer base to people that probably have never used your product or services and you’re getting them to be an affiliate partner and refer customers to you that they don’t know. That’s really the main difference. These days affiliate marketing really can, I guess you could say it goes hand in hand with influencer marketing. That’s the terminology. It has been used a lot these days. But influencers these days, I guess you could say are the affiliates of the today.
Richard: That makes sense. At its basic level, again, just so in case Ecwid listeners not quite getting the difference. A referral program is you have your own email lists. You’re going to incentivize your own customers. Hey, you go out, you tell more friends, we’ll give you some sort of discount. Here’s a coupon code, here’s a gift card, here’s a percentage of whatever. The affiliate is when you’re looking to get in front of other people’s audience, hence your influencer analogy. You sell a pancake spatula and you get in front of Sally’s awesome pancakes that has 2 million followers and you say: Hey, Sally, talk about my pancakes spatula and we’ll give you a 20% or whatever you can pick. I’m assuming you can pick whatever. First off, is that correct? At its basic level there too?
Arlen: That’s totally correct.
Richard: Yeah. And then that would lead to that next question of can you set different prices for different events? Like certain influencers might get more cause they refer more, you can upgrade what they get or, or is it a set it across the board for everybody?
Arlen: It’s definitely doable. I know with our software, with OSI Affiliate Software, it’s possible to create multiple referral programs within the software. Let’s say you’re a business and of course you want to create a program where you can incentivize your customers for referring friends and family and people that they know. You can do that. You could also create another referral program for the influencers. And then your example Rich that you mentioned, you’ve got like the Sally that makes the amazing pancakes that you want to promote your spatula. She would be an affiliate or an influencer because she’s probably never used your spatula before and she’s outside of your whole customer sphere, outside of your company. She’s never used your product, but she has a customer base that is right in there with your product. Because of course if you make pancakes you gotta have a spatula. Obviously, our customer base is ideal and yes, so you can create two different programs. One could be a referral program and you actually set the reward with each. For your customers maybe you’ll have 10 to 20% commission for instance, per referred sale, which is standard. That’s why a lot where a lot of businesses start off with, but then you have Sally on the other end who has this amazing pancake business. It’s got a ton of customers. She’s going to command a lot higher for the commission because she’s going to be exposing your spatula to so many more people. Obviously, you’re gonna have to pay a little more. Maybe you pay Sally 30, maybe even 50% per sale, and you would be able to do that within the software where you can have the different programs, have the different types of either customers or affiliates under each program referring and earning a different commission.
Richard: Yeah, that’s a great point there, Arlen. I would also encourage Ecwid listeners to not be Wait, I don’t want to pay Sally more. Well, here’s the difference. When we talked at the very beginning, we’re talking about you used to have to do SEO or paid ads. The difference is Sally’s getting you those new people. So what you would have been spending on ads to get that customer, you lose a little. You’re just making it up by paying her a little extra to bring new customers to your business. So thanks. Thanks for wording that way.
Jesse: Yeah.Then it was a helpful description of the differences because it’s really different strategies that you’re using. So if you’re setting up an affiliate program, you’re going to have to recruit affiliates, different people that are not your customers. They don’t know you. It’s going to be a little bit of grunt work of talking to people and such and convincing them whereas a referral program, that’s a little bit easier. those are your existing customers and hopefully, they want to champion your product. Hope your product is really good and then they want to share that. why would every Ecwid store, why should they set up a referral program?
Arlen: Yeah, for number one, the bottom line. And what I tell people all the time, cause I talked to businesses all the time, is if you have a good product that you’re selling, nine times out of 10 the customer that’s purchasing that product is telling somebody about it. You know these days because of social media, it’s so easy to spread the word. It’s so easy to just hop on Facebook and say, I’ll go back to the headphones to say, Oh great, I just got these awesome headphones. You’ve got people on Facebook or all of these social channels, sharing photos of the product, them using the product, whatever it is, they’re going to spread the word regardless of what you do. So you might as well take advantage of that and incentivize them for doing it. Because either way, they’re spreading the word and as businesses may just not really realize it, that a lot of their business if they’re not tracking it, is probably coming from word of mouth. And so that’s why I say for Ecwid store owners that are listening. It’s really critical that you do this because it’s been done already. And so you might as well take advantage of that and incentivize people to do it and then they’re gonna be more, more apt to do it actually because they’re being incentivized.
Richard: It’s funny, I was thinking of, once someone actually gets into it, say they’re an affiliate rep for the pancakes, or let’s just go with your headphone analogies. and you’re sitting at the gym and someone asks you next door if they’re not getting a paycheck consistently. Actually, I joked with myself, the person who actually gets it, they wouldn’t just say, they’d say: Oh, when we’re done working out, remind me, I’ll text you. I’ll text you information. So they can track the link. They’re not going to say: Oh, these are Joe’s headphones. Oh God, I should’ve texted the link. I would’ve got a commission. Just joking around.
Arlen: People may think that. You just never know because a lot of people these days, everybody has a little side hustle these days because believe it or not, things are expensive. You gotta have multiple streams of income. If you’re able to refer a business that you’ve done business with, then yes, it’s a great way to get some additional income and yeah, people can do it.
Jesse: Yeah, that’s a good point. And I think as you mentioned, your customers are already sharing your product. You may not really know it because you’re not probably tracking it. And if you’re not encouraging your customers to do it, to do it by giving them little future discounters or a little kickback or something, you’re not really optimizing for it, you’re not taking advantage of it. For Ecwid merchants that are listening right now, how would they set up a referral program for their own store?
Arlen: Great. I’m glad you asked that, Jesse. It’s super simple. If you are an Ecwid store owner, all you have to do is go into the Ecwid app store from within your account and then you can go into the marketing section of the categories there or just do a search for affiliate software. You can do a search for OSI Affiliate Software. You’ll see our app there and then all you do is click Add app. And once you add it, we do give you a
Richard: Oh, that’s awesome. So I have a quick question on that. I won’t go too deep, so don’t worry about getting into super specifics because they probably would benefit by looking at their dashboard as asked this question. But when you’re talking about the social sharing, do you provide, I mean obviously you’re tracking that this affiliate partner X is referring all this, whether it’s Facebook or Twitter or Instagram. I understand that piece, but do you get any additional data back? Like He brought us 100 new customers, but 80 of those came from Facebook. And so because at some point when you get deeper into it, and again, we don’t have to go super deep, but you might go, Wow, that’s a good influencer. But if all kinds of influencers, 80 out of a hundred are coming from Facebook, you might say: Wow, I should on my own even be doing more Facebook ads. In this data, I’m noticing a lot of people are coming from Facebook. So is there any sort of metrics that come back with that?
Arlen: Yeah, good question, Rich. And I’m glad you asked that because we do provide that. We do have a stats report available to the businesses in our administrative control panel. They will be able to see the social stats broken down by the affiliates. They will be able to see: Okay, Tommy the affiliate, he sent us a hundred people through Facebook last month. You’d be able to see that information and across the different social networks as well for Facebook, as I said, Twitter and LinkedIn. And we also have made that available to the affiliates so they can keep track of their stats as well. And their dashboard, there is a reporting area so they can see how many clicks, somebody’s sales, and conversions they’re getting across those platforms. And that’s of course if those shows are sharing platforms are enabled within your account, but you can do that. But those are optional. So that is available to both sides, administrators and the affiliates.
Jesse: Okay. Awesome. Now digging into the referral program a little bit more, cause this is probably for people that are getting started, want to dip their toes into the referral world. This seems like it could be kind of easy. They send them for the program, they get these tracking links that are ready and what do they do next? Is this like, Okay, let’s send emails to our customers? Or is there some sort of way to do that automated in the purchase process so that it’s an evergreen process? How do they get this gift, how to get this thing started?
Arlen: Very good question. And that’s one of the number one questions most people ask when they get the software. It’s like, what’s next? I’ve got this up and running, got my referral program up and running. How am I going to get my customers recruited? So there’s a number of things that you can do. The first thing that you should do day one, once you launch it, is send out a mass email. I’m assuming that most listeners have some type of database of their customers and they have a way of communicating with them. And so you want to let everyone know that it’s purchased for me, that you just launched your referral program. Here’s the link where you sign up. This is the incentive that we’re offering. Go ahead and sign up today. That’s what you want to do definitely day one. But every one of your customers knows and even people in your, in your mailing list, maybe they’re not even customers but they’ve opted into your mailing list. Maybe they’re on the fence about purchasing, but you this may be something that can spur them along as well and start promoting for you. So that’s what you want to do day one. Also, you want to make sure it’s made available and apparent to all future customers. And that can be done a number of different ways. One of the things that people don’t really realize is that with
Jesse: Yeah, Arlen, I think that’s great advice. They’re easy wins, right? I talked to a lot of merchants and I know that people, they look at their website a lot. They look at their Facebook and they look at Instagram, but they probably do not look at their thing. Basically, it’s a thank you or receipt, email. Nobody looks at that because you just don’t really see it that often cause you’re not buying from your own store very often. But you’re right though, that is like prime real estate. People look at that. They just ordered, they’re excited. They’re still in the rush and even that. If you do a
Arlen: It is a great question but before I answer that, I want to just really define what an influencer is it because a lot of people who have a little misnomer anytime you hear about influences. I think most people think about the
Jesse: I think that’s great for people listening. Maybe not every single product out there is going to be in tune with the influencer world, but I think there’s a pretty big majority of them. You mentioned fashion, food, travel, those aren’t even niches, those are just giant categories. And I think this is a way to really jump start your business. If you’re thinking: Hey, what should I do next? I’ve already tried this or tried that. Affiliate marketing, influencer marketing can be a way to really really take things off. But you need to track it and you need to pay the influencers as well. And this is a way that they can get paid without you necessarily having to give the money up front.
Arlen: Right. That’s very key. And because I know a lot of the businesses that are listening are like Okay, how do you pay these guys? And that’s the beauty of the affiliate marketing. It’s typically paper performance, they’re going to get paid on what they send you, what sales that they send you. And that’s something that I know is it’s definitely a lot more palatable for most businesses because there’s no upfront money that they’re paying.
Jesse: For sure. I was thinking, have this number in my mind like influencing start at $5,000 to get people to do stuff for you. I don’t have $5,000 but if you find somebody that’s maybe not as big and they’re willing to do this paper for performance. That’s a nice way to get started.
Arlen: Yep. Definitely.
Richard: There might even be, let’s just call it training wheels for lack of a better word that comes to mind right now where you have product X, you see they have your market. You think I probably get X fits for their market. Let’s just say it’s back to Sally’s pancakes and you just reach out to Sally and you say: Sally, you make amazing pancakes, I’ve used your recipes 27 times. They’re amazing. I want to send you one of my spatulas. I’m a huge fan of pancakes too, I got a business. And you literally just give her one of your spatulas. I’m not saying she’s definitely going to say anything but if you start the organic process that you’re just being a nice person in a business and you’re not necessarily asking for something back from her. Just give me some honest feedback. And by the way, you’re more than welcome to just DM me, you don’t have to say anything publicly, winky face. Go ahead if you want too. Maybe now you’re starting at this organic relationship with this person in a natural way that it really happens. You really are being authentic. It’s like, well, I used this pancake spatula and blah blah and then so all of a sudden no affiliate links yet at all and maybe you get 30 more people to come to your business. And now you DM Sally back. And you say: Dang, Sally, you just posted this one thing and thank you so much. I appreciate it. It was amazing and I got 30 more people. I don’t know if it came from you or not, but it was the day you said something. So just want to let you know since you seem to like it if you want to do an affiliate, I’d love to give you something back. Right, and so all that was not rehearsed. It was real, you don’t have to spend the $5,000 or whatever it is. We don’t know, we just pick that number out. But I think that would be a way that someone could actually start that process in a natural, just the way it happens in the real world.
Arlen: Definitely. There was a good word that you used, Rich, organic. Is your fan of their product? Like you said those pancakes, really good and safe. Do you know this would be a good fit? Let me just send you some product and that’s what it’s about. It does take due diligence because most business owners are busy. You don’t do get approached a lot but it’s just like anything you’ve got to do the
Jesse: Yeah, I think this is all really really helpful for people are listening, they haven’t really thought about affiliate marketing. So for people are listening, you probably know where to go. go to the App Market inside your Ecwid control panel. Arlen, if people want to find out more about you, where’s a place they can learn more about OSI?
Arlen: Sure. The quick link to get to for people I listening is just get OSI.com. You can go there to go to our main site to find out all about us. Reach out to me. I’m actually available on Twitter. You could just @askArlen is my Twitter handle. You can always send me a tweet or message there. Other than that, we have a whole plethora of resources on our website and have chat agents available. So if anybody listening has any other specific questions that want to dig a lot deeper, you can hop onto the live chat on the website. Or give us a call and we’ll be glad to help you out.
Jesse: Awesome. I saw the live chat on the website and with the Twitter handle @askArlen you are asking for some questions.
Arlen: I’m used to it. So I got it. I don’t mind any of the questions cuz I love helping business owners and provide guidance in this whole
Jesse: Even on that
Arlen: That is true, thanks for mentioning that and at the
Jesse: Awesome. I just wanted to get notable attached to my name. (laughing) So I appreciate that.
Arlen: Not a problem. You’re definitely among the notables that I’ve had for sure.
Jesse: Awesome. Rich, any last questions here for Arlen?
Richard: No, I’m just I’m excited. I look forward to checking it out a little bit myself too. I definitely believe in it. You’re going to have people that are talking to your point earlier, Arlen. You’re going to have people talking about your business anyway, you might as well give them away to benefit additionally.
Arlen: That’s correct.
Jesse: All right, awesome, Arlen, really appreciate you being on the show.
Arlen: Thank you guys. I appreciate the opportunity.
Richard: Thank you, Arlen.
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