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Secrets of Affiliate & Referral Programs Revealed! [Nov. 29th, 2009|12:35 am]
All right, everyone. I promised you a good article today and I'm going to deliver. This is going to be a long one, so sit back, get comfortable and prepare to learn.So just what are we going to discuss today? I'm going to be talking about my favourite method to make money online: affiliate programs and referral programs.
When I bring these programs to others, the questions are always the same. What is it? How does it work? What's in it for me? What will it do for me and what do I have to do for it? So on and so forth. I know you all know these questions, because you've asked them yourselves.
First, let's talk about exactly what affiliate and referral programs are. Basically put, these are programs online that pay you for bringing other people to the program. Many of them also have other ways for you to make money, but the real money is in your referrals.

Referrals vs Affiliates

What is the difference between a referral program and an affiliate program? Well, this is a rather simple definition, but the way that I like to define them is that an affiliate program pays you to sell a product or service to other people. A referral program pays you when other people make money. Personally, I prefer referral programs. They can be a much slower way to make money, true - commission on sales is almost always much higher. That being said, I like the concept of making money when your referrals make money. All that you have to do for a referral program is give people something that they already want, for free - and everybody wins. Your referrals make money, you make money. By contrast, affiliate programs have you sell something to somebody else, so when they spend money, you make money - and with most affiliate programs (not all!) what you're selling really isn't worth what they're paying. Many affiliate programs involve selling a way to make money, but the reality is that while technically anybody can make money using the system (you are!) very few people will. There is a lot of hard work involved in an affiliate program, and I generally won't touch them unless there is some other significant advantage to doing so.
Referral programs, on the other hand, are all about advertising. People go to a site, fill out a survey, click on a link, whatever. That website is paid for their efforts, and the more people that do it, the more money that they get. Then they pass some of that money back to the people clicking the links, their part of the profit, and everyone benefits. They also, and here is the trick of the referral program, pass a smaller portion of that money back to whomever referred that person to the website. Thus, everybody wins. The site, in effect, pays other people to advertise for them by giving an incentive to send other people there. The people who click the links and earn the site money also get their incentive to do so. Usually, they're not especially significant amounts - but both can add up.
Let's go through a brief example. My last blog post linked a site called BeRuby. BeRuby is paid by advertisers for every person who visits their website through BeRuby and makes a purchase (and, occasionally, for merely visiting the site or registering there.) They pay 33%(or one third) of the money that they make back to the person who is actually making the money for them: you. On a random note, another third goes to charity. They keep the last third for themselves, and thus make their profit. Here's where it gets interesting, however. They pay an ADDITIONAL 16.6%(one sixth) of all of the profit a click makes back to the person who referred the person to the site.
So, let's say that you sign up to BeRuby through my link, and make a purchase from COMODO (a company I heartily recommend, by the way. Fantastic web-security and pc maintenance software.) for a value of $100. BeRuby earns a commission on that purchase of $15. They give $5 of that to you, and $5 of that to charity. Then, because you joined through my referral link, they give $2.50 to me. But it doesn't end there! BeRuby also pays you for your referrals' referrals, another sixth! NOW it starts to get VERY interesting. Let's say that I invite you, and you invite ten people. I am now earning one sixth commission on everything that eleven people do on the site. And let's say that each of your ten people invites ten more people. Now I'm earning commission on 11 - and you're earning commission on 100 people! Even if each of them only earns one cent a day, you're now earning a 17 cent/day income - that's over five dollars a month that you didn't have before -for doing absolutely nothing... and it's an income that you can increase any time you want by inviting more people... and it never costs any of them anything. You make money when they make money. Win-win.
Do you start to see why I like referral programs and why I recommend them to anybody interested in making an income online?

But I can't make an income like that!

Sure you can... because we're only talking about a single site and ten invites in our example. Let me explain, in simple, plain English, how you can make a permanent income out of referral programs.
1. Find a group to advertise to. This can be anyone, really. Find an online game that you like to play (browser-based games are great for this, many have very cheap advertising opportunities built right in) and/or a forum about a topic that you enjoy (I'll post a list of good forums and games another time) and build up an identity there. Play the game, post on the forum, spend a little time becoming a known figure in that community - or more than one if you like. Once you have, these people become your advertising base. Don't forget about your friends and family, too; you wouldn't leave the most important people in your life out of an opportunity to make free money and you'll find that as long as you take care to only send legitimate links (which you should ALWAYS do) that they may become one of your best sources of income. Everyone has their own friends and family, and if you can get yours to join you and teach them what I'm teaching you, then they can bring their friends and family on board and you have a powerful money-making team... one that you just happen to be at the top of.
2. Get your own website. I know, I know, websites cost money... but it's very much worth it. You can even manage with a free one, although I would definitely recommend paying for your own domain and website. Either way, establish some sort of a presence on the web that you can send people to. Your own link will give you a lot of marketing power, and that's something we'll discuss later. I'll also be talking about the company that hosts No Catch Profits, GDI, and their fantastic affiliate program, so that you can get the web hosting you need and make money from it at the same time. (See, I told you I only used affiliate programs that had other strong benefits!)
3. Here's why you needed that website - start advertising the programs that you use on your website and put that website into your forum signature or whatever other opportunities that you have to get it out there - many forums allow you to link your site in your forum name/profile, or have a part of the site that you can advertise on. There are plenty of opportunities to get your name out there. Whatever you do, don't advertise to your community right away - I made that mistake when I first got started. It got me two or three referrals, and a serious loss of respect. In the long run, it alienated a lot of my advertising base and was definitely a wrong move. Once you're set up, then you can start advertising, but do try to keep it subtle. In most online communities, "Hey guys, I found this great opportunity and I thought I'd share it with you" will get you a lot further than "Sign up here and earn money now!" At the absolute worst, you can claim ignorance and avoid the loss of respect that most people suffer for someone advertising to them. (Why is this? I'm not sure, but I think that it has to do with the prevalence of internet scams, telephone scams, telemarketers, so on and so forth. Marketing is a cornerstone of our society, but we still react negatively to anyone who advertises to us.)
And that's about it. Keep finding ways to get people to follow your referral links. How much effort you put into it is up to you. You can make an income on an hour a day. You can make an income on half an hour a day. You can even make an income on five minutes a day. How much you make depends on how much effort you're willing to make - but I promise you, no matter how much you put into it, you'll get more out of it. The proof? Running this website IS my full-time job now. I put several hours a day into web development, writing articles, searching out and researching new ways for both of us - you and I - to earn money, and advertising the site. I spend at least an hour every day going over traffic reports and using all of the Google tools (I'll be talking about those in another post, be sure to come back for that, it's the best way to understand your website and get more traffic and I'll explain it all!) and just monitoring the site. And yet, I still have FAR more time to spend doing the things that I want to do than I ever did when I was working a "real" full-time job... and working on this website, helping people in the way I needed help (check out the About NCP section for more on why I do this and how I got started... and how badly I needed help) brings me far more pleasure than any other job I've ever worked.
So, good luck to all of you in your online marketing endeavours. I hope that we can all work together here at NCP to put EVERY LAST ONE OF US where we want to be. Yes, that's right, that's my goal - that every single person who visits this website achieves their financial goals. So please, keep coming back, and let me help you to achieve that. Until next time,