A recent article by Bloomberg News notes how many retailers are looking to online sales to rescue them from the downturn in the economy and to prop up holiday season sales. One retail consultant believes that it is online sales that will propel the retail  industry out of the recession.

Retailers are taking note of the fact that online sales margins can be as much 20% or more over brick & mortar margins. Merchants are putting more and more attention and money into increasing online sales.

Blastoff is a new twist on marketing that many retailers are flocking to (over 400 merchants so far). From giant retailers like Kmart, Target, Macy’s and Best Buy to Starbucks and travel sites like Expedia and Travelocity – merchants are jumping on the “cash back rewards” to social networks bandwagon to encourage more sales online.

InfiNET Marketing has been working on a similar concept for over a year. We weren’t totally shocked that someone beat us to the punch. Rewarding social networks for word of mouth marketing is such an obvious evolution that it’s amazing it hasn’t happened sooner. Our interest in this concept really started heating up when we read all the stories of how Facebook was looking for a revenue model.

Like many other online enterprises, Facebook was looking at ad revenue – everyone is trying to copy Google’s success. Our immediate thought was – Why doesn’t Facebook forget the small pond (ad revenue) and get in the ocean (online sales)? We found it interesting that part of Facebook’s revenue model is to make money off of the word of mouth marketing by its members with no cash back reward to them for their efforts. After all, it’s the Facebook members that are recommending books, music and products to their peers – why shouldn’t they share in the rewards?

The business model we have developed actually targets Amazon.com as a strategic partner as they have everything but the social network rewards piece already in place. Our conservative estimate was the cash back rewards program running through Amazon.com would add $800 million to $1.2 billion in revenue in the first year.

Facebook and Google were other contenders for strategic partners.

While Blastoff has the cash back rewards by merchants in place, they really don’t have the social networking piece in place. A significant missing link in our opinion.

Dynamic Matrix Revenue Model

Our model for Amazon not only addressed the social network piece, but also included how to drive more online sales and how to increase word of mouth marketing by network members. While Blastoff relies on the familiar networking model for member growth and revenue share, we have developed a new revenue-sharing model more suitable for social networks that we call the “dynamic revenue matrix.”

We, of course, would still love to get in front of Amazon, Facebook or Google with our concept – if you can open the door for us, we can certainly take you along for the ride.

john [at] InfiNET-Marketing [dot] com

“…in an information-rich world, the wealth of information means a dearth of something else: a scarcity of whatever it is that information consumes. What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention and a need to allocate that attention efficiently among the overabundance of information sources that might consume it”.

I’m reading a half a dozen books on social networking and crowd dynamics. The point Simon makes is abundantly clear in the world of social networking. MySpace, Facebook, LinkedIn and other social networks can become black holes for time and attention.

Most of the books I am reading, recommend having a plan and spending only an hour a day effectively working the plan.

Ask anyone in business, especially small business owners or independent contractors, and they will tell you – referrals are the life blood of my business. Everyone loves referrals. Referrals often lead to the smoothest deals.

• I’m Never Too Busy to Take Your Referral
• We Appreciate Your Referrals
• We Value Your Business & Appreciate Your Referrals

I see stuff like this all the time on business cards and in email signatures. Bob Burg, author of Endless Referrals, and other referral experts tell us that we need to ask for the referral. Putting slogans like these is part of that process.

When it comes to getting referral business, I think the real magic is in - how much business are you referring to others?

Referring business to others is a natural part of my day. I like referring people to people I know. Often it leads to more business for me, but that is not my motivation. My motivation is that if I like someone and they are good at what they do, why wouldn’t I refer business to them.

I notice that some of the people I refer business to, don’t reciprocate. Sometimes I will address this, sometimes I won’t.

I heard a story once about a Realtor who walked into her dentist’s office and infomred him that she was gong to change dentists. The dentist asked her why, what was wrong. She told him that in the ten years she had been bringing her family of four to him, she had referred dozens of people to his office and not once in that time had he referred any business her way. Her dentist asked her to give him a couple of weeks before she did anything. I forget the number of referrals he gave her that year that turned into closed transactions, but it was double digits.

She also went to her CPA and everyone else whe had been referring business to with similar results.

I think people that don’t refer business to others do so for two main reasons:

• They just don’t think of it. They are self-centered, not in an egotistical way – they are just wrapped up in their own little world and focused on their daily routine.
• They are self-centered on their own survival. Underlying this  is a belief, consciously or unconsciously,  in scarcity.

I encourage everyone to increase their referral index (how much are you referring) as a way of not only growing business, but it is also a great means of expanding one’s world view and social & business networks.

Business Networks International and other networking groups are a great way to learn how to refer business to others.