Revenue sharing programs for customers

[Practic]

In the previous post refer a friend programs were presented (see [1]). The second type of programs which can be used to increase purchasing powers of consumers and keep them loyal is revenue sharing programs for customers (RSPs). This type of programs is similar to RFPs, but instead of one-time or fixed number of payments, RSPs pay regularly percentage from sales generated by direct referrals.

For the reason that revenue sharing programs generate stable income streams for consumers they have high loyalty to businesses with such programs.

There are many types and varieties of RSPs. Revenue sharing programs often used in business deals, professional sports, government and corporate fund distributions, as a business model to reward stakeholders, in telecom industry, in online businesses and advertising models (cost-per-sale revenue sharing), and also as a marketing and/or loyalty tool for customers (see [2]).

Revenue sharing programs for customers sometimes called the second generation of referral programs where instead of rewards with fixed value (as in the 1st generation) income streams from direct referrals are given to customers.

Revenue sharing programs for customers often used by small and medium sized businesses to compete with big corporations having RFPs. They also work well in industries with high rates of customers churn.

The only a drawback of revenue sharing programs for customers is that they do not reward customers for indirect referrals. This drawback is removed in the third generation of referral programs.

References

[1] MARKETING - Refer a friend programs

[2] MARKETING - Three necessary conditions for a sale to happen




[2] MARKETING - Three necessary conditions for a sale to happen

 

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