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Building A Passive Income From Your Referrals

Dec 7, 2007
Many internet marketers promote affiliate programs to build a regular income for themselves. The rewards these programs offer can vary from a few cents to a few dollars, and often a percentage is offered on any sales resulting from the initial referral, which can amount to hundreds of dollars if the items being offered are high ticket items.

The presence of cookies ensures that you get your due commission, even if the initial visit by that customer doesn't result in a sale. But you'll still only earn some cash when they actually buy something.

Now just imagine the possibilities if you could pretty much ensure a recurring commission from each customer you refer. Once you've made that initial referral and collected the initial commission, you know that there is a very high chance you will earn that same commission every single month from now on.

In order to build a passive income like this, you need to look for programs that offer a service of some kind, as opposed to a single product. For example, instead of looking for a high ticket e-book to promote, look for a course that has ten parts; each part will be released upon payment of a monthly fee, a portion of which will go to you as the affiliate. Ideally, you should try and find products which are ongoing, such as a monthly magazine for example. The longer the item is available, the more money you are likely to earn from each customer in the long term.

You'll sometimes hear people involved with internet marketing talking about the lifetime value of a customer, and this is a prime example. Always try to think long term when you are choosing which affiliate or referral programs to promote, as it can have a pronounced effect on your bottom line, and that's profit.

You're better off promoting a program that pays you $10 monthly per customer (where each customer stays for an average of a year or more) than you are promoting a product which pays you a one off commission of $50 for everyone who buys it. Of course, it's also important to offer quality products and although a recurring and therefore passive income is desirable, you shouldn't chase after that to the point of neglecting quality.

Ideally you should try to build and maintain an email list of those people who have bought products that you have referred them to; this helps you to build your income more efficiently over time. If you concentrate on a specific area of interest you will know what kind of products those people are interested in, and can therefore search more effectively for services and long running programs that you can recommend to them in the future.

In this sense the best strategy is to promote two or three recurring payment programs that can net you plenty of long term customers, and then supplement that income by periodically offering them stand alone products for a one off amount that will complement the program they are paying for over the long term. It's a winning strategy that can swell your bank balance if you take the time to get it started.
About the Author
Sean Rasmussen is a part time stock market investor and internet marketer. He is known online as a Wealth Creator and success communicator. He shares this information on his websites and blogs.
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