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Referral systems

Referral systems

Practically each person who connected with the Internet earlier or later comes to idea of earnings by means of the Network. Usually, one of the first possibilities becomes various referral systems. The principle of their action seems simple and evident, and thought that it is possible to receive constantly certain profit at that doing nothing for the work of another person looks very attractive.
Actually referral system can not be the basic source of the income for anybody except the owner "a financial pyramid". Nevertheless, some schemes allow active participants to earn if not on bread than on butter. As addition to the main source of means such way of replenishment of a purse, certainly, has the right to existence.
However, it would be wrong to consider referral systems only from the client point of view. For the owner of the company it is one of the cheapest and easy ways to catch target users interest. However, because of the low cost and considerable riskiness, such method usually works in full force only in the companies which have preliminary enclosed enough sums on advertising referral system. It looks like vicious circle. But it is not so simple.

The essence of this method

The essence of referral schemes consists in the following: the user extends the special reference in the Network conducting on a site of the company, and the owner of a resource pays for this small reward. Each client receives the required link after registration and comprises a certain analogue of "a personal code", allowing to define with the help of whom, he is there and, accordingly, to encourage the necessary person. In most cases site owner offers users certain percent from earnings of referrals. Sometimes he offers percent plus the certain fixed fee for each newcomer. And only in the rarest cases we speak about single payment, without the subsequent payment of contribution.
Initially such way of attraction clients has not been connected with the Internet. Certainly, referral scheme is direct "successor" of recruiting systems actively applied by some known cosmetic firms, and also manufacturers of nutritional supplements or household chemical. Web technologies have given the chance to simplify the process of attraction the users. And it is very important. Client-distributor, as a rule is not the manager, not the expert in marketing and at all he is not the psychologist. The "real" recruiting programs demand from him considerable expenses of time and energy, ability to count the reaction, certain aggressiveness.

Advantages and disadvantages

Referral system is based on principles of multi-level marketing, together with the Internet allows the user to involve new target visitors at the minimum expenses of forces. And it is apparent advantages of referral schemes for ordinary "agent". It would be enough to entice once the newcomer into a company site, to pick his interest and income percent is provided for all period of the vigorous activity of a referral. So having made certain efforts initially you can receive further earnings practically not straining. It concerns particularly multilevel systems.
On the other hand, the process of acquisition new clients is not easy even for the professional. Despite mechanism simplification thanks to web technologies the distributor of the reference should be the remarkable psychologist-expert. Without the art of persuasion you may forget about this way of reception of the income. After all it is necessary not only to show the newcomer the necessity of registration on a site, but also to motivate him to constant activity.
For the company owner the referral system, as a rule, is the additional tool of acquisition the target clients. The advantages of this system are obvious: the payment mechanism, without starting investments of means, exact accuracy of referrals selection, possibility to shift the work of managers and marketing specialist on shoulders of ordinary users. All these allow considering seriously such method of work with clients as the viable. Nevertheless, it would be difficult not to take into consideration disadvantages of referral schemes. First of all, unlike the ordered and paid advertising, the given method does not give any guarantees not only concerning result, but also concerning the process. If the users do not interest enough in the offered program from the very beginning the scheme may "not come into action". Secondly, the company should use work of people who are not professionals in the field of attraction the clients. The result of work of one qualified employee can be much more effective, than results of activity of twenty users-distributors. At last, thirdly, negative reputation of referral systems existing because of the numerous swindles constructed on the same principle influence negatively popularity of this kind of earnings.

Versions of referral systems

It is accepted to divide referral schemes on direct and multilevel. In the first case "on the distributor" work only users, involved by him. It is clear that the given version will not bring great income; therefore such systems are usually used in addition to the basic services by the company as pleasant "gift" for clients and small "bonus" to the basic quantity of target "registration", involved with other methods. The multilevel scheme is much more complex formation. Such programs often call financial pyramids. The distributor receives not only percent from the income of the clients involved directly, but also a small part from earnings of those who has been "recruited" by his own referrals, referrals of referrals - and so on, depending on the quantity of levels, coming down to eight. The most widespread schemes consist of 3-5 subordinated to each other "floors". Such system often leads to paradox. In order that referral program functioning, it is enough to have only one such program. In such a manner appear "pure" financial pyramids: the company does nothing, it is engaged only in registration new clients-distributors.
Referral system can be rather effective tool for motivation and attraction of users upon condition that it is not unique and not the main advertising method. It is possible to earn some small sums of money with the help of referral systems if you do not place your stake on it.