Are you part of the Amazon Associates program (this is NOT an affiliate link) — that is, do you link to Amazon products on your site, blog or anywhere else in hopes of receiving referral fees (earning commissions)? If so, you are engaging in one of the first online affiliate marketing programs.

Affiliate marketing is a way for online merchants or advertisers (anyone who sells anything on the internet) to share their revenue with people who want to promote their wares.

In order for this to happen:

1. The advertiser must invest in and set up an affiliate program.
2. The advertiser invites people (mailing list, joint venture partners, satisfied clients, anyone looking to make extra money on the internet) to join his affiliate program.

If you accept his invitation:

1. You must register (open an account) as an affiliate (make sure you understand the T’s & C’s before signing up).
2. Once your registration is confirmed, you will be assigned a special URL (an affiliate link) identifying you as the referral source.

Now, you’re ready to go out and promote the advertiser’s products and earn a little money in the process.

How you are permitted to use your affiliate link differs from merchant to merchant and depends on the affiliate program used by the advertiser. The most common ways to display your affiliate link are through :

• text
• images
• banners
• buttons
• store/shopping pages
• etc.

Commissions vary from merchant to merchant and from product to product and so do the payout methods. Again, be sure you understand your affiliate agreement, especially the clauses pertaining to payouts, before you start advertising someone else’s products.

Here are 3 main ways to earn money as an affiliate:

• Pay-per-click (PPC): You get paid each time someone clicks your ad. No purchase is necessary.
• Pay-per-sale (PPS): You get paid each time someone buys something after clicking your ad.
• Pay-per-lead (PPL): You get paid each time someone follows (clicks) your ad to the advertiser’s site and completes a required action (downloads a file or software, completes newsletter or trial offer sign-up form, etc).

As with all aspects of Internet Marketing, there is so much more to than what I’ve explained here. I’ve just given you enough information to start thinking of how (and if) you’d like to implement this type of marketing strategy in your own business — either:

• as an affiliate (making money promoting someone else’s products)
• though an affiliate program (paying others to promote your products)
• do both

Doing a search on “affiliate marketing” or “internet marketing” will produce more information than you could ever read in a lifetime.

The only way I use affiliate marketing is by recommending businesses I have personally used, know and trust, and who just happen to have an affiliate program (I would recommend them even if they didn’t). Honestly, I don’t think I’ve even brought in $200 through my affiliate links. I don’t rely on affiliate marketing to generate income, so I don’t “push” them actively.

How do you use affiliate marketing in your business?

Continuing our discussion on multi level marketing (MLM), I will attempt to answer one of the most common questions that come up  — Are all MLMs pyramid schemes?

The quick answer to this is no. MLM and pyramid schemes are 2 different business models. One is definitely illegal (pyramid scheme) while the other CAN be, but is not automatically considered illegal (unfortunately, not all MLMs are legitimate business opportunities).

When bringing up this objection asking this question (“So, is this a pyramid scheme or what?”) to someone trying to get you to join their company, the most common answer you’ll hear is something like:

Look at any corporation’s org chart. [Taking out a sheet of paper, they start drawing] You have the CEO at the top [big circle at the top of the page] with his minions underneath [more little circles, to form a pyramid an org chart]. The very company you are employed by is, in effect, the epitome of a pyramid.

Clever reasoning, but what makes an opportunity illegal has nothing to do with how its org chart looks on paper. You’re not stupid. Yes, a corporation’s org chart DOES look like a pyramid, but it’s obviously NOT a pyramid scheme. An MLM’s commission structure most often has some form of a pyramid, but that doesn’t make it illegal. So, don’t be fooled by this line of reasoning.

The real issue is understanding the definition of “pyramid scheme.” In part, Wikipedia describes Pyramid scheme as:

A pyramid scheme is a non-sustainable business model that involves the exchange of money primarily for enrolling other people into the scheme, usually without any product or service being delivered.

The difference between a legitimate MLM opportunity and a scam is this: PRODUCT/SERVICE, PURPOSE and FOCUS. Here are some questions to help you figure it out:

• What are you selling? An idea (opportunity) or something tangible like a product or service? Its a sure scam if you’re expected to shell out a whole lot of cash for the “honor” of recruiting other people? (See point 1 below. One company I know of called this a “licensing fee.”)
• Is there more attention given to recruiting or selling products/services? Red lights should immediately go off if you’re pressured expected to do more recruiting than distributing.
• Where does the bulk of your commissions come from? Will you make more money selling a product or service or recruiting (sponsoring, signing up, etc) new members? Same as above.

Here are more questions to consider before signing up for anything:

1. How much are you expected to invest up front (sometimes masked as an inventory charge or distributor fee)? A legitimate MLM will not require a large start-up investment.
2. Will the company buy back unsold inventory? A legitimate MLM will buy back 80-90% of what you paid in unsold inventory.
3. What is the company’s main focus? What attention does the company put on the market (consumer, end user)? A legitimate MLM’s main goal is to extend its market reach by getting their product in the hands of (or their service used by) as many consumers as possible . Pyramid schemes give little to no attention to the consumer or end user.

I have only scratched the surface. Other points to factor in is the quality of the product, the company’s track record, the commission structure, etc. But I don’t have the expertise (nor desire) to go into too much more depth.

Despite everything I’ve told you here, some pyramid promoters try to make their “opportunity” look like an MLM.

The best advice I can give you is do your due diligence. Never assume what you’re being told is the truth. If you’re considering joining a MLM, don’t do so under pressure, even if it’s from someone you know and trust. If it’s a legitimate and feasible business, the opportunity will still be there next week, next month and next year.

Read EVERYTHING you can about the company and get your hands on all company literature. Find out all you can about their products or services. Look at actual pay stubs. Ask tons of questions. Check with the Better Business Bureau, Federal Trade Commission, National Fraud Information Center, Competition Bureau of Canada, your local chamber of commerce, and anywhere else you can think of.

Don’t be fooled by promises of making quick, easy money. An MLM is like any other business, it takes time, hard work and money to build and grow.

Last week a client asked me what multi level marketing was and I thought “That’s odd. I thought EVERYONE knew what an MLM is.” Lesson: Never assume!

So, here is my attempt at defining multi level marketing (MLM) in plain English.

MLM goes by many other names, but the most popular are “network marketing” and “direct sales.”

MLM is a technique some companies employ to market, sell and distribute their products (or services). They do so through independent sales people, often referred to as (independent) consultants or representatives. “Independent” means they are neither employed nor subcontracted. They work on commission and are considered to have their own business.

Independent consultants purchase their marketing and promotional materials from the company, and there are usually strict “rules” as to how they can use branded material. Some companies even go so far as “restricting” certain marketing strategies for fear of harming their brand or because there is no way for them to verify it is being done in a suitable manner.

For example, one company I know of doesn’t allow their representatives to post branded marketing material –anything with the company name or logo– on bulletin boards and classified ads, nor do they want their reps to resort to “low end” or “cheap” strategies, like placing brochures on car windshields. Of course there’s no way for the company to regulate this or check up on, but they constantly emphasize the importance of branding the company as a high end, classy organization, producing superior, high quality products. They don’t want their image to be tarnished with tasteless –and let’s be honest, ineffective– marketing strategies.

In most cases, independent reps must also become clients themselves by purchasing a minimum amount of product for their own personal use or to distribute (or both).

An independent consultant’s work can be split in 2 major categories:

1. Sales. Bob tells Mary how TheBestProductEver company has come up with a revolutionary facial cream that instantly makes wrinkles and age spots disappear. Bob has been using it for 5 weeks now, and is amazed by the results. He then shows Mary before and after pictures of satisfied customers. Mary is impressed and decides to buy 3 bottles. Bob places her order and hand delivers it to Mary a week or two later. Bob earns commission for his sale to Mary.
2. Recruiting. This is where the “multi level” part comes in. Bob decides to expand his business with TheBestProductEver company, so he shares the business opportunity with his friend, Mitch. Mitch likes the prospect of working his own hours and being involved in a ground floor opportunity, so he signs up as an independent rep with TheBestProductEver company. Bob now has a recruit (Mitch) “under” him (Bob’s downline) and he earns a percentage of what Mitch sells. Bob trains Mitch to do the same (duplicating) –sell, recruit, train. Mitch is successful, so he now has people in his downline which adds a second level to Bob’s organization. On and on it goes. How wide and how deep Bob’s network goes depends on the commission structure of TheBestProductEver company.

Did you get all that?

The questions commonly surrounding multi level marketing are:

• Aren’t MLM’s considered pyramid schemes? Are they legal?
• Do people actually make money joining an MLM?
• Is it really as easy as they claim it is?
• How do I know if an MLM company is legit?

I will attempt to answer some, if not all, of these questions in the next few weeks.

Everyone has an opinion when it comes to this subject, so good or bad, what do you think about MLMs? What burning questions do you have about MLM’s?

Guerrilla marketing is a term coined in the early ’80′s by marketing guru Jay Conrad Levinson in his popular book Guerrilla Marketing (already on it’s 4th edition).

This term refers to unconventional, innovative, flexible, simple, fun, highly targeted marketing strategies intended to get maximum results using minimal resources (time, money, energy).

Guerrilla marketing encourages implementing strategies that cost little to nothing. Anything is permitted — If it works, it counts as guerrilla marketing. If it makes you memorable, it counts.

Guerrilla Marketing website:

It is a body of unconventional ways of pursuing conventional goals. It is a proven method of achieving profits with minimum money.

Levinson identifies the following principles as the foundation of guerrilla marketing:

• Guerrilla Marketing is specifically geared for the small business and entrepreneur.
• It should be based on human psychology instead of experience, judgment, and guesswork.
• Instead of money, the primary investments of marketing should be time, energy, and imagination.
• The primary statistic to measure your business is the amount of profits, not sales.
• The marketer should also concentrate on how many new relationships are made each month.
• Create a standard of excellence with an acute focus instead of trying to diversify by offering too many diverse products and services.
• Instead of concentrating on getting new customers, aim for more referrals, more transactions with existing customers, and larger transactions.
• Forget about the competition and concentrate more on cooperating with other businesses.
• Guerrilla Marketers should always use a combination of marketing methods for a campaign.
• Use current technology as a tool to empower your marketing.

Hungry for more? Check out Management Consulting News’ interview with Jay Conrad Levinson.

Interested in applying guerrilla marketing strategies in your business? Skip over to your favorite bookstore and search for the term guerrilla marketing for all of Jay’s products as well as “copycat” products.

If you need ideas to get your creative guerrilla juices flowing, hop on to Bootstrapping Blog‘s posts 24 Guerrilla Marketing Tactics You Should Be Using and 26 MORE Guerrilla Marketing Tactics You Should Be Using.

Let me know how your guerrilla tactics work!

Filling the pipeline is the first stage in the Universal Marketing Cycle. If you’re not actively filling your pipeline, your business will soon run dry.

So what DOES filing the pipeline really mean?

In the context of marketing a service-based business, filling the pipeline means knowing (and getting known by) enough people whom you can contact (or will contact you) on a regular basis about your business. Your goal is to attract all sorts of people — believe it or not, you need more than just clients to grow your business.

Your pipeline is represented by the names and phone numbers of people and organizations in your contact database (phone book, Outlook Contacts, handheld device, business card holder, spreadsheet, etc.).

You fill your marketing pipeline by attracting many different types of contacts:

• Prospects: Potentials you attract through public speaking, writing, promotional events, publicity or advertising.
• Contacts: People you meet while networking and in the course of every day business life.
• Leads: People you hear about from your contacts or you find through research (like purchasing lists).
• Referrals: People who hear about you through someone else (clients, contacts, friends, suppliers, etc.).

Think of your pipeline as a funnel, where the people flowing through your pipeline fall directly into your follow-up pool — that’s the whole point of filling your pipeline. If you’re not following-up with these people, your business will stagnate and go nowhere fast.

Filling your pipeline is an essential part of growing your business and should be an ongoing process. You must engage regularly in marketing strategies to consistently fill your pipeline over an extended period of time. You should never be so busy that you no longer need to keep filling your pipeline. Continual networking (formal or informal) is a big part of making that happen.

Track your results to see what works best and what doesn’t. As usual, do more of what works and stop what doesn’t.

Clients often ask me to explain marketing jargon. With so many new terms being coined, I even find myself asking what certain terms mean.

Do you find industry vernacular used way too much, expecting you to know exactly what is meant? I sure do (and I’m sure I’ve done it on my blog)!

While some expressions are self-explanatory (like email marketing: Sending electronic messages using your favorite email program, like Outlook, Gmail or Hotmail, to promote your business and services), other sayings are not so evident (like drip marketing).

So I’ve taken it upon myself  to (attempt to) describe marketing terms in everyday language, in a new blog series called Marketing Lingo Defined.

I already have a long list of special terms and expressions particular to marketing that I’ll be defining, but if there’s a term you’d like me to explain first, please let me know by leaving a comment.

It’s finally time to demystify obscure and often pretentious marketing language marked by circumlocutions and long words…. Ummm… I mean, it’s finally time to define marketing in plain English!