WebShop related : how you can utilize the referral-ID
CompenSation/Distribution seems like it will work for development, but it's obvious now that it will NOT work for marketing - at least not in the very same form. We must make anyone involved in sales interested in indirect sales as well. With interest only in direct sales they clearly act against the group's interest (preventing new distributors to contact VEMS and jump on the wagon).
The recipe to cure this is simple, Amway (or someone else) invented it a long ago. A simple "referral" system. Also called multi-level-marketing or mlm.
What does it consist of ?
- a (6 digit) referralID and a parent referralID: this makes a hierarchy according to joining the group. Eg. Brian lurkes X, X lurkes Emil and Emil lurkes Mattias into the project: X becomes parent of Emil and Emil becomes the parent of Mattias.
- simple rule: 60% of sales profit is passed up to the parent. If Mattias generates 100 Euro sales profit, he passes on 60 Euro to Emil, but Emil also passes on 36 Euro to X, X passes on 21.6 Euro to Brian; Brian passes 12.96 Euro to his parent and so on. So 40 Euro remains at Mattias, 24 Euro at Emil, 14.4 Euro at X, 8.64 Euro at Brian, 5.184 Euro at Brian's parent, etc...
- definition of sales profit: to be determined (will roughly be 25..50% of VEMS webshop transaction price for the main VEMS brand units - eg. ECM, standalone meters, etc..). Note that Mattias can have (and likely to have in fact) some extraprofit on the deal (maybe 500 Euro above the 40 Euro), since he provides install services and likely sell the unit at a higher price. Also, if the customer becomes a reseller, Mattias will enjoy the sales generated via their subtree.
Please note that the referral system hierarchy has nothing to do with support. Support must be shallow, 2..3 level.
The referral is only used to make everyone interested in extending his "network" subtree, and also interested in direct sales.
This will have nice effect on tuningsoftware and docs, since many people will realise that these are essential for the system to work (scale) and bring them benefit. There is no sales profit without good product.
We must check WebShop prices again, but it's very important to notice that distinguished retail and reseller prices alone cannot cure the problem !. This is proven. The reseller gets the parts cheaper, but that alone does not encourage the reseller to reveal VEMS !
I'm pretty certain that there is no other way to encourage our distributors to reveal VEMS instead of hiding it.
VemsExecutives/Ofbiz must provide infrastructure for this.
- weather lightweight svn+textfile+perl based with minimal communication with ofbiz
- or a full ofbiz solution
- for oscommerce WebShop (if ofbiz is a long way to go) decide on fields (for every customer) to write his referralID and his "parent" referralID. This is needed to honor people who help others utilize VEMS and promote VEMS (instead of hiding it). Ideally the referralID and parent referralID should not be editable by the customer after initial entry. Validity (and uniq.
- printing short name-card (I think 4x3 fits on an A4 size paper). Anyone could download his pdf so he can print more, but WebShop crew would send out 12 cards (or more on request) with the packs initially.
- VEMS logo
- www.vems.hu URL
- short description, 5% discount if he enters the
- referral ID - very important, unique for the customer !
- customer name, nickname, whatever maybe his URL as he likes
I guess with oscommerce it would be tough to apply the 5% discount on condition the parent referralID is valid. But we will finally solve this, and it will work immediately with manual payment processing (IBAN or domestic transfer: check/money order choice in WebShop).