Why and how referral websites increase local business

Reading Time | 4 Minutes

So every business owner is familiar with referrals. If not, then you should not be in business.

Referrals should be one of the best sources of new business as well as existing business. If people don’t have good things to say or share about your business, then you won’t be in business long.

If your business is struggling and you’ve spent money on various online marketing strategies with less than stellar results, then I encourage you to keep reading this post.

We’re going to discuss how your business can generate more business using a tactic older than sliced bread: referral websites.

Let me start by saying that referral websites may or may not work for your business.

Referral websites and their respective results will vary based on each business and its respective markets and industries served.

Nevertheless, if you’re willing to shell out thousands of dollars a month for pay-per-click advertising or search engine optimization, then you should be willing to at least research referral website options for your business.

Referral websites generate qualified leads that convert to paying customers

Referral websites are fairly easy to understand. They essentially are websites developed and optimized to provide you a steady stream of new customers.

Referral websites are typically built on category or industry-defining keyword domains.

Referral websites contain value-add and unique content to educate customers, and are optimized and rank well in search engines (i.e., page one search ranking) for multiple keywords.

In addition, the clear goal of referral websites is to:

  • Have customers complete a call to action by submitting contact details such as name, email, and phone. 

And because of this, referral websites are gaining popularity as they increase traffic, leads, and revenues for businesses.

Most referral websites are setup to help drive local business although there are regional, national and global referral website opportunities.

A few referral website examples based on local businesses are RoundRockACRepair.com and KyleSprinklerRepair.com.

In addition, plumbing, electrician, legal, and real estate industries lend themselves as feasible industries for referral website services.

Cost of referral websites

The beauty of referral websites is that they are cost-effective and low to no operational maintenance other than paying for leads or results.

You don’t worry about nor do you or your business own a referral website’s web design, content creation, search optimization, or fast and affordable web hosting.

You are only responsible for the following:

  • Finalizing a payment agreement to lease the website
  • Make monthly payments for results on a per lead basis, percentage of sale or search ranking basis
  • Be ready to manage and service each lead provided.

Referral websites can be leased monthly or on a pay-for-performance schedule. As for monthly lease and payment schedules, referral websites start as low as $99 per month or a cost per lead.

The downside to this type of agreement is that you will pay a flat fee per month whether you receive results or not.

However, if on a pay-for-performance schedule or agreement for a referral website, then there may be a payment schedule that offers a tiered percentage of total order.

This is a very cost-effective way to enter into referral website agreements. Most pay-for-performance agreements start as low as 3% percent commissions paid on a lead that convert to customers.

But keep in mind that referral websites, being quite flexible on payment structure, can be negotiated to meet your needs.

But remember that the person or company that owns the referral website has the last say over which payment method is offered.

A good thing to keep in mind is that if you don’t lease the referral website, then your competitor will gladly pay to lease a referral website at your expense.

When your business needs referral websites

So when does it make sense to lease a referral website?

The best judgment of whether you should or should not agree to this type of an agreement is to try searching using keywords you would like to have your own company rank for.

If the referral website is ranking in positions 1-2 or any position on page one, then it may be worth it for you to pay a flat fee.

After all, the referral website may or may not be ranked better than your website.

If the referral website is ranking better than your website, then you better believe it is in your best interest to lease the referral website until you can obtain page one ranking in search engines.

However, there are many cases that companies continue to lease referral websites because they want to capture market and not allow competitors to gain ground.

Word of caution about referral website development

In addition, a word of caution should be taken when considering referral website development as your business’ primary website.

It’s always in your best interest to have a primary website built on a domain you own as well as control the content.

If not, then the person or company could always hold you hostage should you want to change website hosting providers or have a company or professional to build you a new website.

Don’t believe me? I’ve experienced it a number of times when customers come to me thinking they own their website and content to only be told they don’t.

Make sure you get it in writing that you own the website, domain and content, when having websites built, referral or not.

In closing, referral websites can be tailored specifically for your business or industry, and act a primary or secondary website for your business.

Referral websites are a cost-efficient approach to generating business without having a heavy investment into pay-per-click advertising, web design and development, content creation, search optimization or web hosting.

And last but not least, referral websites are easy turn-key options for generating traffic without much wait or long-term agreements.

Alvin Brown
Alvin is a serial entrepreneur and digital strategist with an avid love for domain name consulting. As the Publisher and Editor-in-Chief of DNAdverts.com, his assignment is to ensure business and personal brands don't suffer the consequences of common domain name pitfalls.

As a domain investor and business consultant, Alvin actively participates in daily domain auctions. Outside of auctions, he passionately shares his views, opinions, and vision for how businesses should and should not use domain names to generate greater customer growth and revenue.