Something peculiar has been happening over the last few years, while it is not a new concept it has peaked during the time of COVID.  I am referring to the rise of the referral partner program, or in other words the client-based salesforce.

Before I continue, I need to make clear that I am referring to companies that target directly the consumer, not B2B companies that have specific partner programs providing additional tools and resources.

Odds are that if you dig deep enough into any website in today’s market you will find a referral page, promo or program.  These come in a variety of forms and flavours, ranging from a discount model applicable towards a future purchase, (Harvey Nichols I am looking at you) to cold hard cash (like Flodesk).

Companies have always known how powerful word of mouth marketing can be, good or bad, and have found a way to weaponize it.  Referral marketing can be viewed as word-of-mouth version 2.0, creating a more symbiotic relationship with the customer.

Now not all partner programs have been created equally.  Below are just some of the plans I have come across.

• The discount

  • Usually for you and your victim, sorry I meant to say, friend.

• The paid spokesperson

  • Ok, they are not on the payroll, however, no matter how you slice it they are being paid for a successful recommendation. 

  • When cash is involved, some people might market their referral link with more enthusiasm than otherwise merited.

    • Look at all the Z list YouTubers, Influencers, Podcasters, and bloggers that have their special links. i.e. Happytimes.com/mygreatblog

• The commissioned Rep

  • Some companies will give their referral partners a percentage of all fees collected by the customer

This strategy does not exist without any risk.  In theory, this is a good method to get the word out, however, when does the line get crossed between advice/recommendation and sales pitch/MLM?

If I recommend something to you and you like it, we both feel like we achieved something.  However, what if you find out that I was paid to recommend this to you, how will this change your opinion of the product and of me? What will your customers think when they think you are paying for positive referrals?

Now if I am being straightforward about receiving monetary compensation for a recommendation will that diminish my recommendation?

Now on the other side if I use a service or site which I enjoy and would recommend anyway, should I decline these programs to remain “impartial”?  Why should I leave money on the table?

Like most things in life the answer is not binary, there is no right or wrong way to do this and I suspect we are far from seeing the end, or even the peak of these promotions. Ultimately referral programs are cheaper and less risky and much less complicated than hiring new sales staff, which now is slowly becoming an endangered species.