Referrals – Multi-Referral-Networking
Understanding Multi-Level Referral Systems
A multi-level referral system is a marketing strategy that encourages individuals to refer others to an opportunity, and rewards them for successful referrals. Here’s how it works:
Skip to User Referral Rates ->
- Multiple Tiers: In this system, individuals can earn money not only for their direct referrals but also for referrals made by the people they have referred. It operates on multiple levels or tiers.
- Example Scenario:
- Let’s say Mike is an affiliate for a product or service.
- Mike refers Jenny to the same program.
- Now, someone buys the product via Jenny’s referral link.
- Both Jenny and Mike are eligible for a commission.
- Chain of Referrals:
- For instance, if Mike refers Jenny and Jenny refers Taylor, it forms a three-tier affiliate structure.
- If Mike refers both Jenny and Chris, it creates two separate two-tier affiliate structures—one with Mike and Jenny, and the other with Mike and Chris.
- Benefits:
- Multi-level referral systems can help users & businesses expand their reach.
- Affiliates become brand advocates, driving potential customers.
- It’s a win-win: Affiliates triple their commissions potential, and companies gain new customers.
Example 1:
Example Commission Structure
Tier 1 Affiliate earns 25% of their sales.
Tier 2 Affiliate earns 20% of Tier 1’s earnings.
Commission Distribution Example
Jordan (Tier 1 Affiliate): Makes a sale worth $120.
Alex (Tier 2 Affiliate): Recruited Jordan.
Earnings Breakdown:
Jordan’s Sale: Jordan earns 25% on a $120 sale, which is $30.
Alex’s Benefit: Alex earns 20% of Jordan’s $30 earnings, which is $6.
In this example, Jordan, a Tier 1 affiliate, makes a sale worth $120 and earns a 25% commission, which is $30. Alex, the Tier 2 affiliate who recruited Jordan, earns 20% of Jordan’s commission, which is $6.
This structure incentivizes Alex to recruit and mentor affiliates like Jordan, as Alex can earn a percentage of their sales. The more successful affiliates Alex recruits, the more potential earnings they can generate.
