Sep 252010
This entry is part 1 of 3 in the series Customer Referral Systems

Closer Look: Customer Referral and Affiliate Management Programs, Systems, Software, and Activities

Smart online business systems go hand-in-hand with the solutions you put in place for your offline business. Ideally, if you’re selling anything online, you have researched and selected a comprehensive ecommerce solution that fits your business needs, customer base, and product offerings. Got a rocking product, service, offline business, or online store? A customer referral system should be part of that solution allowing others to refer their friends, family, colleagues, and business acquaintances to your online or offline local business establishment.

Popular. Trendy. Smart.

For local business owners, learning about, securing, and implementing a customer referral program is a popular topic. You can see below how people are asking about it, proudly talking about their’s . . .

searching-for-customer-referral-program That’s a screenshot of live, real-time conversations captured by Google from sources like Twitter!

In reality, a customer referral system becomes an extension of your own efforts — giving you a virtual sales team! To make that happen, you’ll need the right web tools, an understanding of it, and you’ll have to get your customers, colleagues, and well-wishers to climb aboard!

The language? Affiliate Management and Customer Referral are really interchangeable as it relates to software, program, and activities. For more background on the concept — prior to reading the rest of this article — click on the title below to get a quick primer or skip over When Does An Online Customer Referral System Make Good Business Sense?.


Click Here To Get Background and Quick Primer! »


Most Likely You Have A Few Questions . . .

You’re about to add another very important layer to your business operations so it makes sense that you would want to ask some pertinent, hard questions about customer referral systems. How to get customers to refer you is an important question too; we’ll deal with that in another article. Let’s look at how to get started with vetting customer referral systems.

From the outset, you’ll have some responsibilities and some decisions to make …

~ You must have a store or service that lends itself to such a system
~ You must get to know it
~ You must get your customers to use it
~ You must manage the process

Reminiscent of the research effort put forth to choose your ecommerce system, there is a mountain of questions that beg to be answered before you can settle down with a customer referral or affiliate management system.

~ Questions About What’s Available
~ Questions About Features
~ Questions About Setup and Using It
~ Questions About How To Try It Out

Each of the sections below will address a set of these questions. We’ll talk more about the features as we answer some of the pertinent questions.

3 Types of Customer Referral & Affiliate Management Systems

Are there different types of systems? ~ What are my choices? ~ Where do I get such a system?

Let’s start with the choices of types of systems. You have three: stand-alone, hosted, and built-in.

#1 – Built-In system is part of an all-in-one solution, within an ecommerce solution

The creators of some e-commerce solutions have the foresight to include affiliate management as part of their comprehensive system. They understand business owners who are selling products online just might want the ability to invite others to help them sell — and will need an automated solution that is an extension of their ecommerce system. The ecommerce system could be either hosted like BigCommerce or it could be stand-alone like JEM.

When I selected 5 free trials of the best ecommerce systems, this was one of the features I looked for. However, what I found in reviewing some of the popular ecommerce systems is many of them do not have built-in affiliate management systems. More often than not, if the capability is included, it is limited to just integrating a tracking code from an external customer referral or affiliate management system. Then the heavy lifting falls to the customer referral system.

Of course, there are exceptions. For example, JEM includes the features of JROX Affiliate Management System, and Future3 has a full-fledged referral management program. So, you will have to look carefully at your ecommerce system to see whether it provides true customer referral management or just an interface back to an outside hosted or standalone solution.

On the other hand, the developers of affiliate management and customer referral software strive to make their solutions play nicely (interface) with widely-used ecommerce systems. Since they are the ones in business to ensure your customers, friends, and colleagues can easily and quickly recommend your products or services, they are the experts in both commerce and referral. Thus, sometimes the key parts of the integration comes from the customer referral software end.

#2 – Stand-alone system installed on your own servers

A stand-alone customer referral or affiliate management system is software that you install on your own web hosting account. It will have similar features, interface, and useability as the other types of systems. However, in the same way you have to update, upgrade, and maintain software on your personal and office computers, you will be responsible for the upkeep of this software.

Is a stand-alone customer referral or affiliate management system the right choice for you? It could be if you don’t want to pay monthly fees for a hosted solution or if you are already using (or considering using) an e-commerce program that does not offer this capability.

When should you opt for a standalone system instead of a hosted or built-in solution?

Answer: Only if you are technically inclined and comfortable with installing web applications into your stand-alone web hosting space. Or, if you have such a person on staff or plan to hire an expert to make this happen for you. (Drop me a note if you need this type of assistance.)

#3 – Hosted system managed on the creator’s servers

A hosted customer referral or affiliate management system is web-based software that resides on the creators’ website. They own the software but license it to you for a specified amount of time. Sometimes you buy a yearly license or you could choose to buy a month-to-month license, effectively renting it like you would office space. This might seem like a drawback or inefficient use of your money, but there are some real advantages to opting for a hosted solution, including not having to worry about installation, updates, or maintenance.

You might also hear a hosted solution referred to as “SaaS” which means software as a service or even as “cloud-based” software.

Generally, they also provide support for your questions and can be hired to perform certain functions for you, should you need additional help. A good example is when your ecommerce provider only provides for rudimentary integration of your customer referral activities, the technical support personnel of your customer referral system can give you a hand with making this work.

What Features Should I Look For?

Features for administration. ~ Tools for those who refer you. ~ A few “nice to haves.” ~ Some common characteristics.

Now that you know the three types of customer referral systems available to you, let’s take a look at features typically included with the best solutions.

Common Characteristics

Any customer referral or affiliate management software worth its salt has a set of common features that make both your and your customers’ job easier in terms of making recommendations and sending traffic to your business. In a nutshell, each one has these desirable characteristics:

  • Comprehensive
  • Mature and Stable
  • Easy to Use
  • Cost Effective
  • Attractive Graphical User Interface
  • Reporting and Statistics
  • Variety of Payment Gateways

Beyond these over-arching characteristics are a plethora of features you will both want and need in your customer referral system.

Two Sides of The Same Coin

First, consider that an online, automated customer referral system (or affiliate management system) will be two sides of the same coin. It is a double-sided solution, having an admin side and a customer-facing or client side. In terms of language, you might encounter phrases like “server-side” (that’s you) and client-side (that’s your customer or affiliate).

All this means is you will have your part and your customer or affiliate will have their part.

So, the first feature you want to see is a double-sided or dual Control Panel: one for you to administer your part, and one for your customers to manage their part. In order for friends, customers, affiliates, colleagues to use your system, they will have to register for an account. Then they’ll have access to the customer-facing Control Panel.

On that note, let’s divide the features into those two subsets: Administrative Control Panel and Customer/Affiliate Control Panel.

What Features Do You Need In Your Administrative Control Panel?

Your administration panel will allow you to set up all phases of interaction with those who register to use your referral system. You’ll manage your marketing materials, communications, reporting, and disbursal of payments, discounts, and rewards. Below is a screenshot of the iDev Affiliate Management Center, but most customer referral systems will have a similar control panel or dashboard.


In addition to what you plainly see above in the control panel, common features that absolutely should be present in any affiliate management system include those below:

Shopping cart integration Products and Services Events Scheduling
Editable templates, mails, info pages Sensibly task-based Payment Gateways
Create promotional materials Special commission structures Import/Export
Relationship management Reporting Tight security
Pay commissions, award points, create discounts Campaign Tracking Multiple programs
Manual over-rides on most functions Host educational videos Content creation
Ability to print codes for offline use Autoresponse system integration Lots of stats!
Built-in autoresponders Email marketing integration Allows for at least two-tiers


Quite a lot of features, right? But all necessary for a comprehensive customer referral effort.


What Features Should The Customer/Affiliate Control Panel Have?

Now let’s take a look at what tools should be available to those who are referring others to you. This is the part of the system you customers, friends, colleagues will use. The screenshot is from the JROX Affiliate Management System.


Common features found in the customer-facing portal should include a variety of those listed below.

Variety of marketiing and promotional materials Attractive interface
Training materials for learning how to use the system Easy navigation
Training materials if your product or service requires it Tracking, campaigns
Easily check commissions, points, discounts Referral Reports
Sub-referrals, sub-affiliates, downline Attractive banners
Pre-written emails, articles, text ads Select Products and Services to Promote
Account details (email, address, phone) Video tutorials on how to use the system
Manual code Security

Some customer referral programs go the extra mile and include a few nice-to-have features like giving your affiliates special web pages, inserting their personalized affiliate code into marketing materials, and sending out their own emails to downlines or sub-affiliates. Those are the exception, rather than the rule, but nice indeed!

How Do I Set It Up, Use It, Manage It?

How do I set it up? ~ How do I use it? ~ Will it take me a lot of time to to get going?

Common Setup Tasks

iDevAffiliate-admin-dashboardThe best method of determining how easy the program is to set up, and what is involved, is to use a demo. Aside from the common questions you are likely to have about any system, it is somewhat beyond the scope of this article to do a blow-by-blow comparison. However, each of the systems I find adequate and above-average have either an online demo or a downloadable version where you can plug in real information or dummy info to put it through its paces.

That said, here are some tasks common to setting up any affiliate management or customer referral program:

  • Manually or automatically approve those who sign up
  • Connect the system to your credit card payment processor
  • Create discounts, commission or discount levels
  • Decide on a revenue-sharing structure (for example, will you allow sub-affiliates, make payments on more than one tier)
  • Create promotional and marketing materials
  • Determine what types of educational materials you’ll create for your fans :) – for example, written or video tutorial
  • Develop any autoresponse series you’ll need for motivation, education, and general information
  • Edit or rewrite welcome emails, terms of services, and program descriptions

These are not the only things that will be on your Things-To-Do list. But a good system, supplemented by a well-written manual and video tutorials, will guide you through the essential set-up and management activities.

Next Steps: How Do I Get Started?

You’re probably ready to get a better feel for the software that powers a customer referral, or affiliate management, system. These are my top 3 recommendations. Each system offers either a free online demo or a downloadable trial edition. Select one or try all three!

You’ll also get the opportunity to hear what others say who have created customer referral systems or affiliate management systems for their online and offline businesses. (The image at the top of this article is a screenshot of live, real-time conversations captured by Google from sources like Twitter!)

Try These Demos . . .


big-commerce-logo Built-In Option: BigCommerce

BigCommerce ecommerce solution includes the ability to connect to an external customer referral or affiliate management program. As an ecommerce solution, BigCommerce is excellent. Its affiliate management capabilities are, unfortunately, very limited. Still, they offer a free trial of it’s entire system. So if you’re in the market for an ecommerce system, you could use the trial period for your dual purpose.

idevaffiliate-logoHosted System: iDevAffiliate Manager

The iDevAffiliate is a hosted system chock full of features. For your testing pleasure, they offer an online demo in which you can add dummy data to get a feel for the administrative end. Then you can log into a replica of what your affiliates would use to get an idea of their experience. Although iDevAffiliate Manager has a hosted system, instead of paying a monthly fee you can also buy the software outright (like JAM below) and install it yourself.

JAM-jrox-logoStandalone System: JROX Affiliate Management (JAM)

One of my favorite affiliate management systems is the JROX Affiliate Management system because they’ve included all the tools you need to be a superstar with your customers, affiliates, fans . . . and you can get started at no-cost. After you’ve registered 50 persons, you’ll pay a one-time fee to purchase the software.

Remember, you’ll have to download and install this one on your web hosting space. BUT … you can try the online demo before deciding if you want to actually go this route.

Final Thoughts … Any Comments?

Small retailers and service businesses will benefit from a closer, tight knit program they manage, software that is fairly easy to learn, and a process that is manageable. Even a one-person shop, or consulting practice, will find the cost to get started negligible, the process manageable, and customer support easy to deal with.

Thanks for reading. Your feedback is valuable! Do me a favor? Share your experiences — both positive and negative — in the comment section below. Got questions? I’d love to hear them and will do my best to give you an answer you can use. :)

Vernessa Taylor - Technology Consultant & Editor of CoachNotesBlog

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Benefits and Mass Appeal

In simple terms, customer referral marketing is an agreement between my store and my customers (or my practice and my clients) whereby my customers recommend or refer their friends, colleagues, family members, or even their customers to my online (or offline) store. In return for my customer’s referral — that results in a sale (or series of sales) — I agree to pay my customer a commission, or give him a discount, or provide something of value. — Internal quote

In When Does An Online Customer Referral System Make Good Business Sense?, we discussed the relationship between customer referrals and affiliate management, the importance of having such systems, and the benefits of automating and managing these functions online (even for an offline business). As a quick recap, there are many benefits to having your customer referrals automated. Two of the most compelling reasons, from a business owners’ point of view, are:

  1. you can easily see who has recently recommended your product or service and where your traffic is coming from; and,
  2. you can easily push marketing information out to your customers and affiliates, making it easier for them to remember to refer your products and services.

Conversely, the same is true from a customer’s perspective: they have a way to easily refer you and they get information and reminders to do so. Automation really puts you in a win-win situation!

And you’ll find at least three categories of people your referral program will likely appeal to.

  • customers who have their own website (even if just personal, FaceBook, MySpace, or similar) and those who are also writers, bloggers, reviewers;
  • customers who specifically ask whether or not you have a referral program, affiliate program, rewards system; and
  • persons who are not necessarily customers but who think your product or service fits nicely as something they can offer their own customers.

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About Vernessa Taylor

Hi, I'm Vernessa Taylor. I write most of the articles, tutorials and reviews around here. Join in the discussions, share your thoughts, ask questions and lend a hand when you can. Need something? Ask! Check out my About page to learn more about me and my work as a technology consultant and internet coach. Don't forget to connect with me on Google+ and Twitter @CoachNotesBlog.

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  11 Responses to “Rocking Those Customer Referrals – Your Virtual Sales Team”

  1. I didn’t know any of these existed. When I first tried my hand on affiliate marketing two years ago I wasn’t introduced to this kind of system. They sure make the job so much easier.

    • Hi Anne,

      Many of these have been around for numerous years. Which one works well for you depends on your business model. The beauty in the whole concept is two-fold: the idea of rewarding your loyal customers and gaining virtual salespersons for your products or services.

  2. Hey Vernessa, great information given here, thank you.

    I have created several websites around the home security field, I had hoped to rent out, but haven’t had any luck.

    As I was researching businesses to contact I found one offering a referral fee, now I am thinking that would be a very passive sell, they don’t pay until they have a new customer.

    I have an appointment to meet with him, but truthfully, I am not sure how best to handle any leads I may send him.

    The best I can come up with is an aweber form, and hope to compel them to fill it out to receive that businesses info, I fear that hoop will loose most of my leads.

    I’ve been searching for the best practice, but your site has been the closest to answering.

    I even looked into googles voice and found in their help section, posts on how if the phone calls are crucial, then it may not be best to use.

    Could you make any suggestions on tracking referral from my website to an offline business?

    Best Regards, David Casteel

    • Hi David,

      Thanks for visiting and taking time to leave a comment.

      First off, if a business is offering a referral fee, it should provide an appropriate method by which you send over potential customers to them and a way to keep track of the referrals you send. Even though it is an offline business, the solutions in this article will work for them.

      Is there any way you can convince them to set up a proper referral tracking system? The article referenced below would be a good place for them to start (When Does An Online Customer Referral System Make Good Business Sense).

      The second method I would suggest would be on your end.

      You could set up one of the systems mentioned here. You would get the offline business to provide you a special referral code. You then give that code to any customer you refer and simply tell them you’ll get a referral credit if they are kind enough to use the code if/when they avail themselves of the offline business’ product or service.

      Hope that helps!

      BTW – Please consider getting a gravatar (; it lends credibility when you’re asking such serious questions and include your URL in the comment form too. Let me know how this works out for you. :)

  3. Thank you for such a fast response Vernessa.
    You were right, business had a referral code system in place …afraid my green’s showing. :)

    So your response is spot on, and good tone in your asking the customer to use the code, it’ll keep me on track.

    I tried to log in over at gravatar …hmm, will have to work on that. ;)
    My site is not built out yet and still hidden, but you can have a look!
    And thank you for letting me know I should have them …not bad manners just didn’t know. :0

    “I’ll be Back”
    Great information here! Thank You Vernessa, Dave

    • Hello again, Dave!

      Glad you dropped back in to let me know the shape of things. It is truly wonderful that the offline business you mentioned actually has a referral system in place. Do let them know they are waaaay ahead of their competition. :D

      No worries about bad manners. Blog owners like the neighborly feel you get when you can see who you’re talking with. Looks like the Gravatar site is back up. You probably already know this … don’t forget to log into your email and confirm your new Gravatar account. After that you’ll be able to upload pics. :)

      I’ll go take that peek now. Talk to you soon.

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