Dec 24, 2018
What's the best way to drive leads for your business via word-of-mouth marketing?
This week on The Inbound Success Podcast, Arlen Robinson of Omnistar Interactive talks about referral and affiliate marketing programs and how to leverage them to drive qualified leads to your business.
Some highlights from our discussion include:
Listen to the podcast to learn more about the differences between referral and affiliate marketing, what types of businesses they're right for, and how to use them to drive leads.
Kathleen Booth (Host):Welcome back to the Inbound Success Podcast. I'm Kathleen Booth, and I'm your host. Today, my guest is Arlen Robinson, who is the Chief Operating Officer and co-founder of Omnistar Interactive. Welcome, Arlen.
Arlen Robinson (Arlen): Thank you for having me, Kathleen. It's a pleasure.
Arlen and Kathleen recording this episode
Kathleen: Yeah. I always like when I have guests that are from my hometown area, even though you don't live in the Annapolis, Maryland, area, I know you lived in the Maryland area for a while. You went to school in D.C., so I feel like I'm with my hometown guy.
Arlen: Right, definitely. I know the Maryland/D.C. area well. Those were my stomping grounds for quite a long time, for at least 20 years or so. So I know the ins and outs of DC, the DC Metro area, DC, Maryland, Virginia for those of the listeners that ... I'm familiar with that. Most people in the area refer it as a DMV.
Kathleen: Yep. And now you've fled to warmer climates in Florida. I'm super jealous because as we're recording this it's just after Thanksgiving and it's cold up here. So it's a good time to be a Florida guy.
Arlen: Definitely, yeah. That was one of the main motivating factors for myself and my business partner relocating here to the Orlando area. It's really the weather. I grew up in the Chicago area. Between that and coming to DC, Maryland, enough is enough.
Kathleen: Yeah, I grew up in New Hampshire, so I can relate. I was like, "I need to move south because this is too much for me" when I was up there. Weather aside, I've got so much I want to chat with you about.
Kathleen: Before we get into it, can you tell my listeners a little bit more about Omnistar Interactive and what you guys do?
Arlen: Sure. Not a problem, Kathleen. I'll give you the quick and dirty of my background and Omnistar. First of all, Omnistar Interactive is our company. We have, right now, two software solutions. Software as a service solutions. Our main solution is our Omnistar affiliate software.
But before I get into that, we started off almost 20 years ago now, actually, as a full service web development firm, providing custom web based applications, custom web sites for a variety of different firms and different industries, different niches. That time, early 2000 and right at 2000, was really the boom where there was so many internet start ups left and right looking to get a website out, looking to get a web application out, so we really took advantage of that for several years developing a number of niche websites and custom web based applications.
Several years into starting the company, we decided to take a step back, because, I'm not sure if you're familiar with the whole life cycle development projects of when you're developing a website and then a web based application, it's a lot of work and it's a lot of interaction, a lot of back and forth that you have to have with the customers, and at that time it was really early in the days of the internet and a lot of businesses didn't really understand what it took to put these types of web applications together and were trying to nickel and dime us around every corner.
So we took a step back and said, "okay there is some core functionality that it seems like a lot of businesses could use", so we decided to just create our own suite of solutions.
The Omnistar Affiliate software was one of them. We actually had about eight different web based applications during the early 2000's and as time went on, we really just looked at the data and we just said, "the Omnistar Affiliate software's the one that really took off" and with having all those other solutions, we were really almost running ourselves a little thin trying to maintain all of those products, so we decided to phase out the other solutions and really go full force with the Omnistar Affiliate software. Which is -
Kathleen: Yeah, I was gonna say, can you talk a little bit more about exactly what that software does and who it's for?
Arlen: Sure. The Omnistar Affiliate software is an affiliate referral platform that allows any business to really leverage word of mouth marketing.
Typically, the way that the software works is businesses would use our technology, or our software to provide their customers with a unique link that the customer or an affiliate can use to promote the business across various channels, whether it's email, whether it's social media, and then when that customer or the affiliate sends a successful sale or conversion, our technology tracks and rewards that particular customer or affiliate.
That's pretty much what it does in a nutshell.
Our client customer base is primarily e-commerce businesses, businesses selling a product or service online, however, we also have some brick and mortar shops.
We've recently integrated and developed some features to the software that are clickable for service based businesses, such as plumbers, roofers and that type of thing.
Kathleen: Oh, that's neat. Yeah, one of the reasons I was really interested to talk with you, is that I haven't really spoken with anyone in depth about affiliate or referral marketing in this podcast. Which, when I started thinking about it, it was kind of surprising to me because what I'm focused on is inbound marketing, which is naturally attracting the right customers as opposed to going out and spamming them and trying to get in front of them.
One of the best ways to naturally attract the right customers is word of mouth.
It's obviously one of the most powerful. So it was interesting to me that, really nobody I've spoken to, to date, has incorporated any kind of formal affiliate or referral program into their marketing strategy.
So, that's what really made me interested in chatting with you.
I know that you use your platform for your own marketing. Obviously, you've got lots of customers that use it. I'd love to just start by asking you to tell me a little bit more about what makes a successful affiliate or referral program?
What are some of the foundational building blocks that need to be in place for this to work for somebody?
Arlen: Okay, gotcha. That's a very question. There are some key things that do need to be in place for a business to have a successful referral or affiliate program.
But before I get into that, a common question that many businesses ask, or so many people ask us is, what's the difference between and affiliate program versus a referral program.
Kathleen: I didn't even think to ask you that and that's a good point, because I keep saying referral or affiliate, as though they're synonyms.
Arlen: Right, many people use them interchangeably but they're really two different things. But it's quite simple.
The main difference is a referral program is a program where you're structuring it for your customers, people that have purchased your product or services, to refer typically people they know, friends of family or colleagues.
An affiliate program is where you've got it structured where you're reaching out to affiliates who are people that have not used your product or service themselves and are gonna be promoting it to people they don't know for commission.
In both cases, of course, there's gonna be a commission involved and they are incentivized for doing that.
That's really the main difference. That's probably the easiest, I guess you'd say, definition between the two of them.
Kathleen: And does your platform support both or is it one particular?
Arlen: It does. It does support both and the majority of our customers that use our technology, they use it for typically both reasons. Usually, the customers are really the starting point, but we do have customers that immediately approach us and they already have affiliate relationships in place and they're just looking for a more efficient way to track referrals.
Kathleen: Well, let's start with referral programs then, because I feel like, from an inbound marketing stand point, referrals are so inboundy. What I mean by that is, you're taking somebody who's already said yes to you for their own reasons, and if they're happy, asking them to spread the word and making it easier for them to do so. Which is really at the heart of what inbound marketing is all about.
So, let's talk about that first. What are the building blocks to making a successful referral program?
Arlen: Well, first of all, the main building blocks to making a successful referral program, number one, is your program has to be clear and really straight forward as far as your offering for your customers.
And the process for them to get on board to become a referral partner has got to be smooth.
There's so many times where I've seen examples of other programs where, and I'm an affiliate or referral partner for other companies, and I've gone through a lot of hoops just to be able to refer a company's products or services.
So number one, you want to make sure the onboarding process is streamlined. So no matter what technology you decide to use, or if you decide to create your own in house referral program, you want in house referral technology with your own developers, that's the first thing you need to keep in mind is that, make sure it's streamlined.
And there's a number of ways to do that. Many technologies or many referral programs, they'll offer a sign up component to it where you can engage your customers at some point, either from your website directly, or even some point in the actual order fulfillment process.
So even maybe sometime down the line when they've gotten their product, they've gotten their service, they're satisfied and you think they would be primed to be referral partners.
You want to make it very clear, or easy for them to do that, whether it's an email exchange or whether somewhere in the interface that you provide them access to just easily signing up, or if it's just opting in.
So that's number one, making it easy to onboard.
Secondly, you want to also have an attractive offering.
You know, for number two, people aren't going to get excited about your products and services unless it's going to be worth their while. Because these days, I think more than ever, people's attention is scattered.
People are ... there's so many things coming at people, no matter what career you're in, no matter what you're doing, just living life in general these days, we've got a million and one distractions coming at us.
So unless you've gotten an offering that is going to be worth somebody's while as far as the commission is concerned, they're not even going to think about it, so you want to make sure you spend the time and figure out what really can I afford to give away to these referral partners?
These customers that are going to refer their friends and family. Whether it's a percentage of an order total, whether it's a gift item, whether it's a fixed amount, you really have to spend a lot of time figuring out what you can do.
A lot of businesses that we work with to set up referral programs, do something where they would maybe start off at a certain point, where they would start off all their customers earning a certain percentage.
Maybe 10, 20 percent, and then over time analyze the data and as they are more successful, put somebody to a different tier, so to speak, where they can maybe earn 30 percent and onward.
Kathleen: I was going to ask you, what is meaningful? Is there a dollar amount threshold, or is there a thing?
In your experience, can you give me some examples of what a meaningful reward is that would get somebody to take action in this regard?
Arlen: Yeah, standard, what I usually see is businesses start at 10 or 15%. And that's kind of basic.
I would say to really excite someone, 20 and up is really going to be something that's going to stand out from some of the other competitors. Because like I said, between 10 and 15 is kind of the default, what people start with.
So when an affiliate or your customer sees that, they could just glaze over that, but if you're talking 20, 25% initially, or even greater than that, I think that is a good starting point that's going to catch people's eye.
Kathleen: And does that pre-suppose a certain transaction value? Because obviously if you're selling a, I don't know, a 10 dollar thing, 20% of 10 dollars is a whole different ball game than 20% of 500 dollars.
So is there a certain transaction value threshold?
Arlen: That's a good question because there's businesses out there, of course, that are selling low value products, low dollar amount products, and then the high dollar amount products. So it's really going to be up to the individual business owner.
Then that is a consideration if your maximum price for product is, like you said, 10 dollars, then you got to think about, "Okay, 10% commission of that may not be worth someone's while."
So you got to really look really hard at what you can afford to give away.
Then of course if you're talking the higher dollar amount products, maybe 100 dollars and up, then 10% commission may not be too bad. So that definitely is a consideration.
And there's things in place that you can put in place as far as the technologies that you're using that can set up so that it's kind of a sliding scale based on the products that are purchased -
Kathleen: Now what about if you're incentivizing something that doesn't have a dollar value?
So for example, I'm thinking about, I subscribe to newsletters, for example, The Skimm, which is very popular with women. And they have an ambassador program where you get a referral link and for every X number of people that sign up using your link, you might get something. And in their case, it might be swag.
Are there other models like that where you're giving away things and maybe not money?
Arlen: Yeah, there definitely are models like that. And I've dealt with a lot of different customers of our that are in the organic food space actually. And this is something, I don't know if it's something that's customary in that space that are selling organic super foods and a variety of different, kind of niche products that they have a distinctive presence online.
What I've seen with those type of companies is, I believe their affiliates, a lot of their affiliates or referral partners are customers of theirs. And what incentivizes them is free product, and that's something that I definitely see. So it's going to be kind of on a case-by-case basis.
You kind of have to understand the people that you're getting into "refer you" business, and what's going to excite them, and what do they want. The only way to do that is really to just ask questions.
So you want to really establish a solid relationship with people that are going to referring you business because you could just be guessing. You could be pulling incentives out of a hat and just kind of guessing as to what's going to excite someone, but 30%, even though that may sound good on a commission, that may not excite one of your affiliates.
Maybe they do want products, or maybe they would rather have a gift item, or something else. So you want to ask questions, you want to really kind of form a relationship with them and just create a dialogue and figure out what do they want.
Kathleen: Makes sense. Now, you mentioned, first thing was, make it easy to sign up. Second thing was, make it worth their while. Any other key elements required?
Arlen: Definitely. You want to also make it easy for these referral partners or these affiliates to promote across a variety of different channels.
The thing you want to keep in mind is, you don't want to have, to have them thinking about what they have to do.
So whether you're going to give them the ability to promote across via email, you don't want them to have to type up email messages. Go ahead and just create the copy for them, and there's solutions that will allow you to store canned messages for these affiliates so they can either cut and paste, or they can even send through the interface.
So you want to go ahead and create canned messages for email.
And you also want to, of course, think about the social media promotions.
Referral tools these days have a lot of integrations with the Facebooks, the Twitters, and the LinkedIn.
So, you can even create custom posts for your affiliates to be able to easily do, or easily post across their timeline. So they don't have to think about, "Okay, what graphic am I going to share? What promotion am I going to do?"
You just want them to be able to get in there, get out, promote to their audience and to their network, and then just kind of sit back and earn commissions. So you really want to take the pain away from them.
So I would say that's the third most important thing is, make sure you have as many promotional options as possible.
And then again, it also goes back to understanding who these affiliates and referral partners are, because you could have some that are, maybe they're bloggers, and maybe they do a ton of blogging, and they want maybe a graphic or some type of banner for their blog or their site.
So those are things that you can provide to them and keep that in mind.
Kathleen: Now, let's assume you've got all these things. You've got the easy method of signing up, you've got good incentives, and you've got almost like you're doing the work for them in terms of spoon feeding them what they need in order to be successful as a partner.
I imagine anything else, there's still that element of you need to keep yourself top of mind and remind them that you're there, and remind them to go in and do what's needed in order for them to take full advantage of the program.
Can you talk a little bit more about that?
Arlen: Yes, yeah what you're talking about there is really just your engagement and the relationship that you're going to be creating with these, the affiliates and referral partners. And that can be done ...
These days, there's a ton of tools out there that would allow you to create a relationship with them. So what you want to do is make sure that on an ongoing basis, you let them know.
Maybe you've got some discounts that you have going on in your company and you want to blast that out. Maybe, we just passed Black Friday, maybe you had a super Black Friday special. You want to let these affiliates know right away.
Any time you've got a promotion or something that could excite customers, let them know right away so that they can pass on that information, pass on those discounts.
So that can be done, of course, through an email list. These days, like I said, there's tons of email solutions that you can use that you can send out auto response emails where you can touch base with these affiliates on a frequent basis.
Not only can you tell them and let them know about the discount and promotions that you have, but you can also let them know about anything new that you've got as far as promotional tools and promotional technology.
So let's say you come up with a special graphic or something new for Facebook or Twitter. You want to let them know that any reason to reach out to them and let them know that you've got something new, you definitely want to do that because you want them to stay engaged.
And you don't want them to forget about you. That's the main thing. As I mentioned earlier, everybody is split doing a million things. So you've got to remind them, because maybe they just forgot they're an affiliate. Maybe they're saying, "Okay, that's right, I forgot. I can get on the ball. I've got some friends that could utilize this product or service."
Kathleen: Now, when we first started talking, you mentioned that this is a great solution for, in particular, e-commerce companies, as well as some home service companies.
Kathleen: Have you seen any really great use cases with more traditional B2B firms, especially like service, regular B2B services?
I'm curious. Obviously that's sort of what we are as a company, so I speak from a standpoint of selfishness and wanting to know, but yeah. Anything in that area?
Arlen: Unfortunately, there's not a whole lot out there, which is actually what spawned our company to create features for service-based businesses, because you mentioned e-commerce.
Tracking an e-commerce transaction is pretty straightforward in the world of affiliate marketing. In most cases, most affiliate marketing solutions just require a snippet of code that you would just need to add on an order confirmation page. And that's usually it, and that's pretty much standard across the board. A snippet of code on the confirmation page. There's some solutions that also have API's that'll be a little bit more advanced that you can use to kind of tie things together and track preferred sales from the affiliates. So, that's really what's standard.
So with e-commerce shopping carts, that's easy to do, but for service-based businesses, like I said like your company or a regular service company, let's say like a roofing company or a plumbing company. They truly do thrive on referrals, and word of mouth, because let's say you get your roof done and the roofer does a great job, your friends, your neighbors are obviously going to see that you just a new roof. So of course they're going to ask you, "Okay, who did your roof? How much did you pay?"
So those types of service-based businesses lend well to referral marketing, but the problem is, the transaction isn't online. You don't go to a roofing company's website and put in an entire 20,000 dollar roof into a shopping car and checkout. It just doesn't work like that.
They typically work on, and as your business does as well with your marketing service, is you typically work on a lead basis where you get leads. And you got to try to convert those leads.
Those leads would typically come through to the business either via phone or via some type of online form. So the referral system has to have some way of either tracking maybe a unique promotional code, or via somebody filling out the form.
Those are actually features that we just integrated probably about three months ago into our software where we've got the ability and we give businesses the ability to have a customized form that has a unique referral code on it so that when somebody calls in, they just refer to that code and you'll be able to know who referred them, as well as an online info form.
But unfortunately from just kind of what I've heard from talking to other businesses that were looking for this, there's not a lot of solutions out there like that specifically for service-based businesses because of the ways that you have to track that.
That's really one of the main reasons there's not a lot out there like that.
Kathleen: Yeah, it's all about being trackable isn't it?
Arlen: Yup, exactly, exactly.
Kathleen: Now, speaking of tracking, I'm really curious to hear what kinds of results can come from strategies like this. So you've obviously done this for yourself, you've got lots of companies on your platform that are doing it.
What are typical results, or what sort of ROI could a company expect to see from something like this?
Arlen: Well, yeah. That's a really good question, and it's hard to give a specific answer 'cause it really is gonna vary on the type of business. It's gonna vary on the cost of their product or services, and also a lot goes into it as far as the cost that they typically incur to acquire a customer. So you gotta factor all of that in.
But as far as statistics are concerned, I think really the numbers do speak for themselves. And so if there's somebody that's really kind of on the fence that's listening, that's not quite sure about referral marketing, the stats really speak for themselves, and really what ...
These days the stats say that 92 percent of all consumers trust recommendations from their friends or family members, people that they know, opposed to all other forms of advertising. So, it's really not going anywhere.
There's also some other stats that marketers will vouch for, word-of-mouth marketing. 64 percent of most marketers really agree that word-of-mouth marketing is the most effective.
And I think the reason for that is because, in this kind of scattered space that we're in right now with all of these options that are available for people online and in retail, people don't really know where to go if they're trying to purchase something.
People don't want to make a wrong decision. They don't want to waste money. So if they've got a referral from a friend that really has done the due diligence, it really speaks volumes.
But to go back and answer your question as far as typical ROI, I would just say roughly if a business implements a referral program, you've got to keep in mind that typically you're not paying these affiliates any upfront fee. You just paying a percentage commission for a referred transaction, whether it's a dollar amount, whether it's a percentage of their order total.
So I would just say roughly if a company is aggressive enough, the ROI is really ... I could say, based on what they're spending on whatever referral solution that they are getting, and we've had some stats from some past customers actually, we've done some different case studies.
But a typical ROI depending on the price point, the price point let's just say for an affiliate software solution, you're going to pay anywhere from $50 to $100, $200 a month on a low end. It can of course go higher that that.
Depending on the price point of your products, you can safely say that once you're launching it, if you expose it to your customers and affiliates at the same time, you can expect to cover the cost of the software, I would say on average, within two to three months. Cover the annual fee of whatever software that you're paying if you stick by the initial strategies that I mentioned, and you're aggressive enough to get enough exposure to it.
Kathleen: Great. And what impact has your own referral or affiliate marketing had on your business?
Arlen: Well, it's definitely had a tremendous impact 'cause we definitely eat our own dog food, we use the software, and we've been using it internally for quite a long time. One of the things that it's helped us do is isolate and form a longer-term relationships with companies such as web developers and other agencies that actually have a pool of customers.
And so, it's really helped us in that respect because prior to us utilizing our own affiliate program and prior to us launching an affiliate program for our services, it's a little bit harder to engage these types of agencies because the main thing that they're looking for is they're looking for some type of return.
If you've got value that you're providing them, they see that, but they're going to need some incentive to be able to promote it across the board, or kind of package it, if you will, to their customers.
So in that respect, it's really helped us form relationships more than anything because we've got the affiliate program, and that's one of the peak things that these sellers and these agencies are looking for, to get some type of return.
Kathleen: Got it. Well, so interesting and I think it sounds like, based on the entry price point for platforms like yours, that it's definitely something worth experimenting with if you're in a certain industry.
Kathleen: Now shifting gears for a second, there's always two questions that I ask all of my guests, and I'm curious to hear your answers. You talked earlier about what the spirit is of inbound marketing and how word of mouth fits so much into it.
Company or individual, who do you think is doing inbound marketing really well right now?
Arlen: Yeah. Inbound marketing is ... That term was actually coined by HubSpot a while ago, and it's something that really makes sense, especially in these days, but
I would say a company that has done really well in inbound marketing would be Airbnb. That would be one of the top ones in my opinion, and I'll give you the reason why I would say Airbnb.
First of all, they do an excellent job any time you, let's say create a profile on their site, you may be, let's say, I'm here in Orlando. I create a profile and I'm looking for some resort locations in the Orlando area. I start looking, and like anything, it's a process. I may not find anything immediately. So I start looking for resorts in Orlando.
And what they've done is, within their site and technology, and many companies do that, is they drop I guess you could say a cookie or a bot on your browser that is going to be able to analyze your search history.
So even though, let's say, I was at their site, I was looking at Orlando, maybe next week I'm like, yeah, I'm thinking this summer I want to go to Jamaica. So I might start looking for Airbnbs in Jamaica. They are very good at actually analyzing the search history, and then following up on the search history via email.
So a day later, I may receive an email with a list of the top Airbnb spots in my price range for Jamaica.
And so that's some powerful stuff. That's not a hard sell that they're doing, but they're providing me with that information based on my search history, and that's, I think, an excellent example of inbound marketing, you know, providing that value.
Kathleen: Yeah. It's funny. You're the second person I've interviewed who's mentioned Airbnb for that exact reason-
Kathleen: ... because they almost like do your work for you as a customer.
Kathleen: So fascinating.
Well, the second question is the world of digital marketing is changing so quickly and staying on top of all of the changes can be tough. How do you personally stay educated and up-to-date on everything happening?
Arlen: Okay. Got it. Good question, and I'll give you three things.
One thing that I'm pretty religious about listening to is another podcast, actually. It is called Marketing School. It is a podcast from Neil Patel and Eric Siu. For those people that aren't familiar with them, they are some top SEO experts. Neil Patel has been around for a while. He started his own agency. He worked for different companies for a while.
But they put out a short daily podcast that's five minutes where they give some really solid bite-size information, all things marketing. And I listen to that religiously when I take walks, and when I'm stepping away from my desk I turn that on, and I get a lot of good things. And they really keep me up to date.
Kathleen: And Eric Siu was actually a guest on this podcast.
Arlen: Oh was he? Okay.
Kathleen: He was my first guest of 2018.
Arlen: Oh wow.
Kathleen: So if you go back to the first episode of this year, you'll find Eric Siu making his predictions for marketing in 2018. If you want to see if they came true.
Arlen: Gotcha. I'm definitely check that out. Yeah, he's a great guy. He knows a lot, him and Neil Patel. So they have a great podcast, and then I'll also take a look at Neil Patel's blog. His blog, very thoughtful blog. He puts a lot into his posts. He used to post a lot more but he's kind of pulled back and focused more on the quality of the content, and yeah. I take a look at that. So those are two things.
And then finally, guests that I have on my own podcast which is the eCommerce Marketing Podcast, which is my weekly podcast. I learn a lot from all my guests, and so that is another way that I stay up to date on all things marketing, specifically eCommerce marketing.
Kathleen: That's great. Well I am with you 100 percent on the podcast guests thing because that is how I stay up to date. I just book people that I think I can learn from, and soak it all in, so it's a brilliant strategy if I do say so myself.
Arlen: For sure.
Kathleen: Great. Well, if somebody wants to learn more about referral or affiliate marketing, or they want to get in touch with you, what's the best way for them to find you online?
Arlen: Sure. Yeah. They can actually reach me online at a number of different ways.
For number one, to get more information about our solution that I mentioned throughout this recording, the easiest link to go to our main site is just getosi.com. That's G-E-T-O-S-I.com and that'll take them, listeners, to our site.
And if they want to engage with me, they can just find me on pretty much all the social networks, Arlen Robinson. I'm on Twitter, LinkedIn, and Facebook. I'd be glad to help anybody listening on their journey to referral marketing.
Kathleen: Great. Well, thank you so much, Arlen. It's been interesting. I've learned a lot. I'm sure my listeners have learned a lot, and I would love to ...
If anyone is listening and has an affiliate or referral program that is doing well for them, I'd love to hear about it, so you can Tweet me at WorkMommyWork. That's also where you can tell me if there's somebody else I should be interviewing who is doing kick-ass in non-marketing work.
And if you've listened to this and you found it valuable, you know what to do. Leave us a review on Apple Podcasts or the platform of your choice. It helps a lot, and we appreciate it.
Kathleen: Thank you. Thanks, Arlen.
Arlen: Thank you, Kathleen.