Are Referral Commissions now illegal?

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Posted on 31st May 2011 by Tony in Business Advice

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I had a very interesting conversation last week with someone about the effects the new Consumer Protection Act has with regards to Referral Commission – apparently it’s now illegal.

Basically, referral commission is a small fee you get paid for when you refer someone to a company. For example if you know a friend is looking for a house, and you give this person’s details to an estate-agent, the Agent will pay you a referral commission if that friend buys a place (it’s usually something like R1000.00 or so).

Now, I know many businesses that use the Referral Commission model as part of growing a business and client acquisition – we’ll pay you RX.XX if you refer us a client.

In 2010 the US passed a law requiring everyone to declare their interest in referring you – and this makes sense. A person is more likely to refer you to a company that pays the best commission, rather than the company that provides the best service.

But I think to make Referral Commissions now completely illegal is taking things too far. I know the premise of the CPA is to look after a society that is simply too stupid to think for themselves (yes, I will admit, I am anti-CPA or anything Nanny-State-like) but this is yet another move to make it more and more difficult for business in South Africa to actually do business.

As a small business owner, I’m expected to spend a fortune on legal-fees to ensure all my documentation is now in order for this crazy CPA and now they tell me I can’t pay for business referrals? Good heavens! (Actually I don’t use a referral model system, but I should have the right to choose one).

What are your thoughts on Referral Commissions and the CPA?

Popularity: 7% [?]


Having a website is not marketing!

2 comments

Posted on 5th May 2011 by Tony in Business Advice

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I’ve just received a very interesting email from a customer – one that really raises the hairs on my neck – as I realise so many people still don’t “get” marketing. Especially small business owners and the One-Man-Bands.

A few months ago we developed a website for a small company (let’s leave the names out, OK?) based on WordPress. The client has now demanded that we take down the website for two reasons:

  1. We left the website incomplete and it’s ruining her company image.
  2. She doesn’t get any business out of her website and we’re just costing her money.

To address number 1: We designed the client a WordPress site. It’s by far the most powerful tool that any small business owner can possess. Gone are the days when you are required to pay a web developer R500 for every minor change you want done to your site as you can do do it yourself. Secondly, it affords the small-business owner a really cheap alternative to a grounds-up Content Management System.

The reason why the site was incomplete was because the client never fulfilled her obligation – which was to populate the content of the site. Our job was to design the front end and make the site SEO-friendly.

If you’re going to build a website, make sure that you understand the terms and conditions. OK, I’ll take responsibility for this, because obviously I didn’t position my client properly before launching the project. I did, however, email her numerous times regarding her populating the site.

Secondly, and this is the important part: The client has done no website marketing.

Which, technically is what this post is all about … you *have* to market your website if you want it to do anything for your business. You can’t just slap it up there and expect someone to randomly find it – especially if you’re in a competitive industry.

You need to be running SEO, GoogleAds, Blogs, Articles and just about anything else that will drive traffic to your site. A combination of an effective Sales-Funnel and a good online marketing stream will do wonders for building a cash-generating business.

A website should be making you money. If it’s not, then something is wrong.

And your website shouldn’t be a stand-alone – it needs to be part of a running Sales Funnel – rather as a lead generator than a deal-closer.

So, next week is going to be rather busy – as I’ve decided it’s time to go through and audit each client’s website and marketing strategy … if your website is not making you money, speak to me … because it should!

Popularity: 4% [?]


Coupon Marketing – Internet Style

7 comments

Posted on 28th March 2011 by Tony in Business Advice

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Coupons are not a big deal in South Africa. Sure, you get the odd coupon here and there for a product or service, but nothing major – but elsewhere in the world, coupons are a huge deal – and it’s actually really good marketing for your business.

If you’ve been keeping an eye online lately, you’ll notice a flood of online coupon companies that have come to the fore, and some of their offerings are really good. Take Zappon’s offer today – R995.00 for a weekend away for two at a fancy hotel in Paarl valued at R5000.00.

Now if I owned a hotel/restaurant I would definitely be approaching one of these guys right now to ask them to promote a meal/special or holiday package … heck, I’m sitting here thinking “how can I get any of my products on their system”?

If you’re looking at trying something different with marketing your business, take a look at these sites here:

www.zappon.co.za

www.ubuntudeal.co.za

www.dealio.co.za

Disclaimer: Before anyone asks, I have not been paid by zappon or ubuntudeal or dealio to write this post. I just think that their products are worthy of mentioning…

Popularity: 37% [?]


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