The Real Truth About Brendan Miskell

Brendan is a highly successful entrepreneur and Founder of Creative Hive / Business Hive (ABN 24 667 341 135) (part of eRevolution Corp USA) who is driven to make a positive difference in society and create opportunities in the post Covid 19 world

Unfortunately, a person by the name of Sharon McLoughlin and others have been posting a number of untrue and defamatory statements on complaints board, Facebook and other platforms about our founder Brendan Miskell since Sharon McLoughlin lost a court case in August 2020 for claims made against Brendan in January 2020

We have all the proper documentation in order and a trail going back many years with our IP Manager Martin Puchert

 Invention disclosure

 Method and system for facilitating affiliate marketing

Inventor: Brendon Miskell

BHive Australia Pty Ltd

2013

 

Contents

The problem                                                                                                                                                            3

The invention                                                                                                                                                         3

Roles in the network                                                                                                                            7

Other desired activities and outcomes                                                                                         7

Types of members in the network                                                                                                 9

Incentives used in the network                                                                                                     10

Incentive structures                                                                                                                           11

Example of an incentive structure                                                                                                12

Examples of affiliate reward systems                                                                                         14

Revenue opportunities for the network operator                                                                20

Profit sharing                                                                                                                                         22

Benefits of the network to members                                                                                         22

Hosting the network                                                                                                                          23


 

The problem

Affiliate marketing is a type of performance-based marketing in which a business rewards one or more affiliates for each visitor or customer brought about by the affiliate’s own marketing efforts.

In known systems of affiliate marketing, affiliates use their own web-based initiatives to encourage potential customers to visit to their own web page and then click on a particular hyperlink, referred to as a “tracking link”, on the web page. The hyperlink re-directs the potential customer directly to a site operated by the seller (also known as a merchant or retailer), where the visitor has the opportunity to make a purchase. The tracking link includes an embedded code to enable the seller (i.e. online merchant) to identify those visitors who arrived via the affiliate’s link.

In conventional affiliate marketing, sellers are at risk of having their reputation damaged due to unscrupulous behaviour by affiliates. For example affiliates may make false claims or trap readers into clicking links that don’t truthfully disclose the nature of the offer.

Also, it has been known for unauthorized parties to hijack the tracking links of affiliates and steal their commissions.

Conventional online affiliate marketing encourages the use of search engine optimisation for the purpose of driving traffic to a tracking link on the affiliate’s website. Also, conventional online affiliate marketing encourages the duplication of website content on multiple websites as a way of attracting more customers.

In one form of affiliate marketing, the affiliate is paid based on the volume of visitor traffic directed to the seller’s web page. The seller is therefore rewarding the affiliate for traffic that does not have any guarantee of converting into sales. Also, anyone reading the web page can click on the tracking link, so the seller has no control over the types of customers that are targeted.

In another form of affiliate marketing, the affiliate is paid based on the number of visitors who make a purchase from the seller within a limited time period, such as 24 hours. The affiliate is not rewarded if the potential buyer returns after that period. Also, the affiliate is not rewarded if the potential buyer declines to make a purchase at the time of the first visit, and returns to directly to the seller’s site another time to make the purchase – without passing via the affiliate’s hyperlink.

 

The invention

The invention is a method and a system for facilitating affiliate marketing. The invention involves hosting an online business network cooperative in which affiliates operate. The network has two kinds of affiliates:

  • introducer affiliate: a member of the network who introduces a new member to the network.
  • referral affiliate: a member of the network who either refers a potential buyer to a seller, or refers a seller to a potential buyer. Referral affiliates may only introduce members who are their first degree connections within the network.

A first degree connection with a member means there is evidence of either having a direct connection with the member (such as a LinkedIn connection or other social media connection) or of having directly used the services of that member previously.

In addition, the business network cooperative has an introduction system for automatically matching potential buyers in the network with potentially suitable sellers in the network, and introducing those sellers to the buyers. The introduction system creates a profile for each member based on information submitted voluntarily by the corresponding member, and uses the profile to match buyers with sellers.

Referrals within the network are only made by the introduction system and referral affiliates (who have first degree connections with both parties). The invention only makes business referrals when there is knowledge of the parties being introduced, which encourages better matches and greater trust between buyers and sellers.

The business network cooperative has a system of rules and incentives to encourage certain desirable activities in the network and desirable outcomes for the members.

One of these desirable activities is for members of the network to take on the role of an  introducer affiliate or referral affiliate.

Important features of the invention include:

  • Referral affiliates are rewarded by the network for business referrals they make, but only when the referral directly results in a successful transaction between a buyer and a seller between one of the directly referred parties. The reward is paid when the transaction has been completed. The reward is therefore performance-based, which encourages affiliates to make bona fide referrals.
  • Introducer affiliates are rewarded by the network for each new member they introduce to the network, but only when the new member conducts a predetermined type of transaction within the network. Examples of transactions include: disclosing data about themselves to the network, completing a survey, or making a purchase from a member of the network, or selling goods or services to another member.
  • Each member of the network may operate as an introducer affiliate. However, only certain types of members may take on the role of referral affiliate (see below under “Types of members in the network”).
  • Referral affiliates must be members of the network and can only refer members to other members of the network.
  • All members are registered in the network and must conform to membership rules for the network. This promotes greater trust between members, which provides an atmosphere conducive for members to conduct business.
  • The network tracks financial transactions between members and tracks referral affiliates and introducer affiliates who led to those transactions. Offline transactions (i.e. transactions occurring outside the network) can be tracked if members notify the network of the transaction, such as by logging the transaction on a website for the network. Members are offered rewards for transactions within the network so they have an incentive to log any offline transactions between members.
  • The network provides an administrative framework for paying rewards to members and systematising the process of making referrals.
  • The network is a cooperative in the sense that it is designed for the mutual benefit of its members and a portion of financial turnover in the network is returned to members in the form of cash and reward points.
  • Preferably, the network requires affiliates to identify themselves to each member that they refer. This creates transparency and promotes trust and an atmosphere conducive to acting on a referral.
  • Members must have agreed to be in contact with a referral affiliate in order to be referred. Members can reverse this decision (opt out) at any time.
  • It is only possible for a referral affiliate to refer another member if the affiliate is a first degree connection of that member.
  • The network provides a website to be used for affiliate communications. All affiliate contact with members must take place over the website using tools provided for the purpose. This allows affiliate communications to be monitored and checked for appropriateness. It also provides a way to confirm that the affiliate is contacting people personally known to them, hence reducing the likelihood of spamming and damage to the reputation of the network.
  • The invention provides for residual income. As the invention tracks transactions between members, it provides an option for referral affiliates and introducer affiliates to be rewarded for one or more subsequent transactions, depending on what is agreed with sellers.

Advantages of the invention

  • There is greater trust and transparency between members than between conventional online affiliates and members of the public. This is very important as it creates a more conducive atmosphere for doing business than for conventional affiliate marketing techniques.
  • Conventional affiliate systems work predominantly with strangers. The invention works with known contacts. Each affiliate introduces known contacts and hence tends to be more careful in their behaviour.
  • This system reduces spamming and improves privacy because it uses a system of permission marketing i.e. members must have agreed to be in contact and can opt out at any time. It is not possible for any member to refer another member to which they are not a first degree connection.
  • As the invention does not use the tracking links used in conventional affiliate marketing, there is no risk of a tracking link being hijacked and the commissions stolen. All parties use the same software platform. All transactions are traceable. A breach of the rules carries a penalty and therefore the invention discourages unauthorised behaviour. There are more opportunities for the affiliate to make referrals because affiliates may refer any of their first-degree potential buyers to sellers, and any of their first-degree sellers to potential buyers. In conventional affiliate marketing the affiliate is limited to promoting only merchants who have arranged an affiliate program.
  • Affiliates are rewarded for successful transactions, regardless of the time elapsed since the referral. In contrast, conventional online affiliate marketing does not reward affiliates after a time limit, such as 24 hours, has passed.
  • Depending on the type of membership, affiliates may be rewarded in a variety of ways, including cash, rewards and special offers.
  • The affiliate is part of the network so their needs are respected as much as any other member. In conventional affiliate marketing the affiliate operates on their own with their own website.
  • In conventional affiliate marketing, the seller (equivalent to the online merchant) is at risk of having their reputation damaged due to unscrupulous behaviour by affiliates. For example affiliates may make false claims or trap readers into clicking links that do not truthfully disclose the nature of the offer. The invention discourages unscrupulous behaviour because members are at risk of being expelled from the network if they don’t conform to the membership rules.
  • Affiliates do not need to create separate websites to draw in potential buyers.
  • Conventional online affiliate marketing is based on search engine optimisation purely for the purpose of driving traffic to a link on the affiliate’s website. Also, conventional online affiliate marketing encourages the duplication of website content on multiple websites as a way of attracting more customers. The invention is not SEO driven and so avoids these problems altogether.
  • Conventional affiliate marketing does not provide a means to earn a residual income.
  • The invention, unlike conventional affiliate marketing, utilises the Dunbar Rule of 150 regarding close ties and social cohesion, i.e. everyone tends to maintain only maximum of only 150 close ties connections. Hence affiliates will tend to be able to introduce a maximum of about 150 known associates. This has implications for the strength of social and business cohesion in the entire network. It also creates a powerful marketing tool as participants can find out what members services others in their network are using, hence a powerful influencer on behaviour and a powerful referral tool. The Dunbar Rule is significant here as it reinforces that the inventions does not market to unknown people either within our network or when doing external recruitment. Conventional affiliate marketing noes not follow this.

Roles in the network

Only members of the network may engage in the activities of the network. The members may operate in one or more of the following four roles:

  1. Seller

A seller is a member involved in supplying goods or services to members of the network.

  1. Buyer

A buyer is a member involved in purchasing goods or services from members of the network.

  1. Introducer affiliate

An introducer affiliate is a member who introduces a new member to the network.

  1. Referral affiliate

A referral affiliate is a member who either refers a potential buyer to a seller, or refers a seller to a potential buyer.

  1. Network operator

The network operator is responsible for operating and maintaining the network. For example, BHive Australia Pty Ltd is a network operator.

Other desired activities and outcomes

In addition to the affiliate features described above, the network may encourage the following activities and outcomes.

  1. Commercial activity

The network promotes commercial activity between members of the network, such as the sale of goods and services between members. Ideally, the commercial activity should be for the mutual benefit of the parties involved.

The network may be used to promote any type of commercial activity. However, the network has the option of promoting certain types of commercial activity more than others. For example, the network may be set up to promote a particular type of industry, type of business, or geographical region, so the incentives may be structured accordingly.

  1. Introductions to the network

Growth of the network is important for growing the database of customer data. The network therefore includes incentives for members to introduce new members to the network. The simplest form of incentive is a flat incentive i.e. one which is the same for all types of members. Alternatively, the structure of the incentives may depend on the desired size and composition of the network. If there is a shortage of a particular type of member, the incentive for attracting that type of member may be increased. For example, if the network has a greater need for members who are sellers rather than buyers, the incentives for sellers may be increased relative to the incentive for buyers. In another example, if the network has a need for members from a particular industry or geographical area, the incentives for attracting those numbers may be increased.

The network may dynamically vary incentives in response to changes in the size or composition of the network. For example, if the network has a target of achieving a membership in which 90% of members are buyers, the incentive for attracting buyers may be progressively scaled down as the percentage of buyers in the network increases. In another example, if the network has a shortage of members from a particular industry sector, the incentive for attracting members from that sector may be increased, but progressively reduced in response to the growth of members from that sector.

  1. Buyer and seller ratings

Preferably, the network includes incentives aimed at encouraging buyers in the network to rate their firsthand experience with sellers in the network (e.g. rate customer service), and optionally for sellers to rate their firsthand experience with buyers (e.g. promptness of payment). It is important that the ratings are based on firsthand experiences e.g. buyers have used the services of the seller before. The network may enforce this by requiring evidence that there has been a direct transaction with the member or product or service being rated. As the network has the ability to track transactions between members, this is easily performed and quality controlled. Preferably, the network retains a record of all e-commerce between members to enable transactions within the network to be verified.

Ratings may include a quantitative rating (such as a score out of 10) and/or a qualitative comment, such as a description of the experience with a seller. The network provides a system for collecting and publishing ratings, such as an online portal or printed forms and publications. Members can select which other members of the network are able to see their member ratings e.g. only direct contacts or more members.

  1. Lead sharing

Preferably, the network includes incentives aimed at encouraging members to source leads (potential clients) who are relevant to sellers in the network, and to share those leads with the sellers. The leads may comprise potential buyers from within the network as well as potential buyers from outside the network. Information about each lead may be in the form of a name and contact details.

The structure of the incentives may depend on the desired quantity and composition of leads. If there is a shortage of a particular type a lead, the incentive for attracting that type of lead may be increased. For example, if sellers in the network have a greater need for leads from a particular industry or geographical area, the incentives for attracting those leads may be increased.

The network may dynamically vary incentives for leads in response to changing needs of sellers.

  1. Disclosure of member data

The network encourages individual members and business members to disclose specific types of data about themselves to the network. Members are asked for particular customer data at the time of registration and from time to time after registration e.g. satisfaction surveys, seller ratings. The amount of reward points earned for the data may be related to the amount and type of data submitted.

Examples of personal data include, but are not limited to, age, sex, contact details, employment role, employment industry, spending patterns, and personal interests.

Types of members in the network

It is currently envisaged that the network membership comprises four types of membership. Additional membership types or sub-categories of membership may be created.

  1. Consumer

A consumer is any party who buys goods or services from sellers in the network. A consumer may be an individual, a business, or any other legal entity permitted to incur a financial liability. A consumer may operate as:

–          introducer affiliate for consumers only,

–          referral affiliate for all types of members.

A consumer cannot introduce business members to the network.

  1. Sales agent

A sales agent is a professional sales representative for the network operator. The sales agent may operate as:

–          introducer affiliate for both consumer members and business member members,

–          referral affiliate for all types of members.

  1. Business member

A business member is a supplier of goods or services to members of the network. A business member membership covers a business entity and any staff of that entity. A business member can operate as:

–          introducer affiliate for consumers only,

–          referral affiliate for all types of members.

A business member cannot introduce business members to the network.

Incentives used in the network

As mentioned above, the network provides incentives to encourage certain activities and outcomes. There are multiple types of incentive. Examples include, but are not limited to, the following.

Reward points

Reward points are a currency which only has value within the network. They are issued by the network operator for a variety of reasons, and can be used as a rebate against purchased goods and services purchased from the network operator and sellers in the network.

Rules for issuance and redemption of rewards points are determined by the network operator.

Reward points are particularly useful for encouraging commercial activity within the network because they can only be redeemed for goods and services provided by sellers in the network. This form of currency is therefore “recycled” within the network.

Money

In some circumstances, monetary payments are made to members using a public currency accepted outside the network, for example Australian dollars, Euros or US dollars.

In some circumstances buyers may pay for transactions with sellers using a combination of reward points and a public currency.

Membership data

Membership data comprises information about members, and includes the customer data mentioned above and contact details. Such data may be highly valued due to its commercial applications for other members of the network.

Search rankings

The network includes an online business directory with listings for members and a search engine for finding members or goods and services. When the network is quite large and there are many businesses operating in the same area, their rankings in the search results become important to them. High search rankings are another way to reward members who pursue the desired activities mentioned above. In one example, search rankings are affected by the following:

  • level of paid membership
  • length of paid membership;
  • user ratings of the member (if a seller);
  • number of introductions to the network made by the member; and
  • level of cash transactions put through the network when in a buyer or seller capacity.

Incentive structures

The network has an “incentive structure”, which is a set of rules for determining the type and amount of rewards to be paid to members, and the circumstances in which rewards are paid.

The aim of the incentive structure is to encourage members to do things that benefit the network, and to do them for their own self-interest. The incentive structure encourages the desired activities and outcomes mentioned above.

There are many ways in which the incentive structure can be set up. It is useful to first understand the motivations of members and their reasons for using the network.

For the four types of network members listed above, the individual reasons for using the network may be as follows.

Consumers

  • Earn reward points.
  • Exchange reward points for all services of sellers.
  • Gain access to a search engine which aids in the selection of sellers.
  • Gain access to ratings and feedback about sellers in the network.
  • Notify sellers when they have a need for particular goods or services, and to request offers and quotes from relevant sellers.
  • Share the profits of the network.
  • The network operator may offer other incentives from time to time, such as supporting charities or fundraising activities.

Business members

  • Obtain customer data so as to aid targeted business offers likely to bring higher sales/ conversion rates.
  • Obtain both B2B and B2C contacts
  • Obtain client referrals.
  • Earn reward points.
  • Share the profits of the network.
  • Be promoted by the network
  • The network operator may offer other incentives from time to time, such as supporting charities or fundraising activities.

Sales agents

  • Earn money.
  • Earn reward points.
  • Share the profits of the network.

Sales agents are able to exchange money for reward points and visa versa. This type of flexibility and added value to the affiliate is not available in conventional affiliate marketing systems.

Network operator

  • Earn money.
  • Build a valuable database asset.
  • Promote a new way of doing business.

 Sharing the profits of the network

Since is the network is a business cooperative, members share in the profits of the network. Each member’s share may be a function of extent to which they contributed to the growth of the network. Factors that may be taken into account in an algorithm for calculating each member’s share include monthly introduction and referral levels, and the extent to which members purchase services from other members of the network.

 Example of an incentive structure

Here is an example of incentives designed to help achieve the activities and outcomes mentioned above.

  1. Referring business within the network

–          Consumers: receiving reward points in return for referring a potential buyer in the network to a potential seller or vice versa. The payment is only made when the referral results in a purchase between the potential buyer and seller. The member may also receive residual payments for subsequent transactions involving the same buyer and seller. Consumers are only paid in reward points.

–          Business members: as for consumers.

–          Sales agents: as for consumers, but sales agents can be paid in money or rewards points, depending on their preference. Sales agents may also convert money to reward points.

–          Network operator: receiving money for referrals.

  1. Introducing new members to the network

–          Consumers: receiving reward points in return for introducing potential new members to the network. The reward points are only paid when the new member conducts a transaction with a member of the network (i.e. the new member performs  the role of a buyer). Consumers may only introduce other potential consumer members to the network i.e. consumers are not rewarded for introducing business members.

–          Business members: as for consumers.

–          Sales agents: as for consumers, except: (a) sales agents can be paid in money or rewards points, depending on their preference; (b) sales agents are also rewarded for introducing new business members (the money or reward points are only paid when the new business member performs the role of either a buyer or seller with another member of the network).

–          Network operator: not applicable.

  1. Commercial activity

–          Consumers: receiving reward points for operating as an introducer affiliate or referral affiliate, and reward points in return for buying from members in the network.

–          Business members: receiving reward points for operating as an introducer affiliate or referral affiliate, and higher search rankings in return for trading with members in the network. Factors to be considered may include the frequency of transactions, the size and total of those transactions, and the user ratings they receive from members.

–          Sales agents: receiving money and/or reward points for operating as introducer affiliate or referral affiliate.

–          Network operator: not applicable. Network operator acts in all 4 potential roles (intro to seller, intro to buyer, buyer and seller so it gains a benefit commercially in all of these activities 

  1. Buyer ratings

–          Consumers: receiving reward points in return for rating a seller based on firsthand experience with that seller.

–          Business members: as for consumers.

–          Sales agents: as for consumers.  

–          Network operator: as for consumers (if operating as a buyer).

  1. Disclosure of personal data

All members have an incentive to fill out a profile about themselves to the best of their ability as it helps match them to be matched to suitable buyers and sellers. The network may offer rewards for disclosing specific types of data, such as participating in a survey request for that member to do a further survey

–          Consumers: receiving reward points in return for disclosing specific types of data about themselves, as defined by the network. The number of reward points may be related to the type and amount of data disclosed.

–          Business members: as for consumers.

–          Sales agents: not applicable.

–          Network operator: not applicable.

Examples of affiliate reward systems

One of the advantages of the network structure is that it encourages strong interactions between members (i.e. member-member interactions), in addition to interactions between the network operator and members (i.e. member-network interactions). These member-member interactions are important for speeding up the growth of the network and for helping the business members to grow.

Example 1: introducer affiliate process

Figure 1 shows a simple example of the introducer affiliate process. A first introducer affiliate (IA1) introduces a new business member (M1) to the network. A second introducer affiliate (IA2) introduces a different new member (M2) to the network who is a consumer. At this stage, M1 and M2 have not conducted any business transactions with other members of the network so the introducer affiliates IA1 and IA2 are not entitled to receive any rewards.

Figure 1: Introducer affiliates IA1 and IA2 sign up new members M1 and M2, respectively, to the network. IA1 and IA2 are not paid any rewards at this stage as M1 and M2 have not yet conducted any business transactions with other members of the network.

The affiliate IA1 must be a sales agent as only sales agents may introduce business members to the network. The affiliate IA2 could be a consumer, business member or sales agent.

Figure 2 shows a continuation of Example 1 at a later stage where member M2 purchases a product from member M1. This triggers the network to pay a reward to both of the introducer affiliates IA1 and IA2. The transaction also triggers the network to pay reward points to both members M1 and M2 in return for transacting within the network.

The introducer affiliates IA1 and IA2 did not play a role in introducing M1 and M2 to each other and are therefore not rewarded as referral affiliates. An example of the referral affiliate process is shown in Example 2.

Figure 2 Member M2 purchases a product from member M1. This triggers the network to pay each introducer affiliate IA1 and IA2 a reward. The network also pays reward points to M1 and M2 for transacting with a member of the network.

Example 2: Referral affiliate process

Figure 3 shows an example of the referral affiliate process applied to Example 1. A referral affiliate (RA) personally knows member M2 and has previously used the services of M1. The referral affiliate then recommends the services of M1 to member M2. As a result, M2 decides to make a purchase from M1. This transaction triggers the network to pay a reward to each of RA, M1 and M2. Each reward is in the form of money and/or reward points (money is only paid if the member is a sales agent). M1 also receives new business and M2 has the benefit of quickly finding a business based on a trusted referral. Member M2 could be a consumer, business member, network operator or sales agent.

Alternatively, if M1 and M2 are introduced to each other by the network without any involvement from RA, then there will be no payment of a referral affiliate reward.

 

Figure 3: An example of the referral affiliate process. A member RA, who has a first-degree connection with M1 and M2, refers M2 to M1. A reward payment to RA is triggered when M1 and M2 complete a business transaction with each other.

How much are reward payments?

The rewards paid to introducer affiliates and referral affiliates will be a split of a total pool of funds paid by the business member to the network. The size and split of the funds depend on the marketing agreement negotiated with each business member. There are many ways in which the network can set up marketing arrangements to attract funds from business members, including :

  • Listing Fees: these are fees paid to enhance the visibility of a business profile, such as when members search for businesses matching their criteria.
  • Lead fees: fees per lead, paid by sellers in return for receiving leads.
  • Closed business fees: (described below under “Revenue opportunities for the network operator”)

Splitting of funds in Example 1

Referring to Figure 2, all of the parties in the diagram will be rewarded to some extent. Each party receives a split of a pool funds paid by M1 to the network as part of a negotiated marketing agreement. The splits are as follows:

  • IA1: receives 20% for operating as an introducer affiliate with M1
  • IA2: receives 2% for operating as an introducer affiliate with M2
  • M1: receives 2% for selling within the network
  • M2: receives 48% for buying within the network
  • Network operator: receives 20%

If the pool of funds is $500, then IA1 would receive $100, and so on.

Splitting of funds in Example 2

Referring to Figure 3, all of the parties in the diagram will be rewarded to some extent. Each party receives a split of a pool of funds paid by M1 to the network, as follows:

  • IA1: receives X% for operating as an introducer affiliate with M1
  • IA2: receives X% for operating as an introducer affiliate with M2
  • M1: receives X% for selling within the network
  • M2: receives X% for buying within the network
  • Network operator: receives X%
  • RA: receives X%

If the pool of funds is $500, then IA1 would receive $XX, and so on.

Example 4: Splits for introducer affiliate process

Figure 4 shows another example of the way funds are split for introducer affiliates, and is triggered by an introduced member buying from a seller in the network:

  • Network marketing fund: 8% (paid as money).
  • Introducer affiliate (seller): 40%, unless  the role was shared with a sales agent, in which case it is shared equally (paid as money to sales agents or the network itself if it made the referral; paid as rewards points to other members).
  • Introducer affiliate (buyer): 2% (paid as money to sales agents or the network itself if it made the referral; paid as rewards points to other members
  • Buyer: 48% (paid as money to sales agents, and rewards points to other members).
  • Seller: 2% (paid as rewards points).
  • Network operator: 20 – 40% (paid as money).

Figure 4: Revenue splits in the introducer affiliate process.

Note that the introducer affiliate has the opportunity to introduce both the buyer and seller to the network. This is significant both in terms of affiliates’ higher income potential and stability of income by bringing in a diversity of sellers and buyers, and particularly seller industries. It also helps merchants in terms of more efficient matching on leads, so there is a higher probability of the transaction closing. Conventional affiliate marketing systems do not have this this so it is an important differentiator.

Example 5: Splits for referral affiliate process

The process is similar to the introducer affiliate process shown in Figure 4. The splits are:

  • Network marketing fund: 0%.
  • Referral affiliate: 40%, unless  the role was shared with a sales agent, in which case it is shared equally (paid as money to sales agents or the network itself if it made the referral; paid as rewards points to other members).
  • Introducer affiliate (buyer): ?
  • Introducer affiliate (seller): ?
  • Buyer: 48% (paid as money to sales agents, and rewards points to other members).
  • Seller: 10-20% (paid as rewards points).
  • Network operator: 20 – 40% (paid as money).

Example 6: Splits for referral affiliate process with a performance fee

Figure 5 shows an example of a referral affiliate process in which a seller offers to pay a performance fee (in addition to the network’s reward) for finding a client. The buyer might specify that the client must fit a particular profile, such as being from a certain industry or have a turnover greater than $1m.

There are five steps in this example, as shown in Figure 5.

  1. The seller publishes a reward open to any member who is able to refer potential buyers for a particular product or service. In other words, this is an offer to members to act as a referral affiliate. The reward may be an offer of cash, reward points or a combination of cash and reward points.
  2. Splitting of the reward is agreed. In this case, the split is: 10% of the reward is paid to the network operator (in this case “BHive”), 45% is paid to the referral affiliate, 45% is paid to the buyer. The network operator is paid immediately, but the referral affiliate is only paid when the seller completes a sale with the buyer (referred by the affiliate).
  3. The referral affiliate sources potential buyers (prospects) by direct invitations and advertisements.
  4. One of the potential buyers makes a purchase from the seller.
  5. The 45% rewards are released from the seller to the referral affiliate and the buyer.

 

Figure 5: Revenue splits in the referral affiliate process where the seller offers a performance fee.

Example 7: Sales of network services

The network it self may sell products and services to members. Figure 6 illustrates the splitting of funds for sales of network products and services:

  • Network marketing fund: 8% (paid as money).
  • Referral affiliates: 16% (paid as money to sales agents or the network itself if it made the referral; paid as rewards points to other members).
  • Buyers: 16% (paid as money to sales agents, and rewards points to other members).
  • Network operator: 60% (paid as money).

Figure 6: Revenue splits for products and services sold by the network operator.

Revenue opportunities for the network operator

There are many potential forms of revenue for the network operator. Examples include, but are not limited to, the following

  • Listing Fees: these are fees paid to enhance the visibility of a business profile, such as when members search for businesses matching their criteria.
  • Lead fees: fees per lead, paid by sellers in return for receiving leads.
  • Closed business fees: fees paid by sellers in the network when conducting business with buyers within the network. Closed business fees are a portion of the total transaction value. The portion may be negotiated separately with individual sellers or may be a universal formula. There may also be residual payments for subsequent transactions involving the same buyer and seller.

The transfer of funds in the transaction may occur by any means, including cash, cheque, credit card, and electronic transfer of funds using external banking facilities or an e-commerce system provided by the network operator.

Members are given incentives, such higher search rankings, to encourage them to conduct transactions via the network. For example, members may be given higher search rankings based on the frequency of transactions, the size and total of those transactions, the user ratings they receive from members, the level of their referrals to the network, the level of their personal spending, and so on.

  • Advertising fees: fees paid by members for advertisements or promotions within the network. Since the network operator has access to data about its members, it is able to target members who are more likely to be interested in the advertisement or promotion. Examples of types of advertising or promotion that attract a fee include, but are not limited to, the following.

–          Bulk advertising campaigns, such as by mobile SMS or email, directed at members in a target demographic. For example, an SMS message sent to all members within 50km of the Sydney CBD who work as an electrical engineer.

–          Contacting members from time to time in response to their expressions of interest in specific goods, services or topics. Members may notify the network operator at initial registration, or at any other time, that they are interested in finding a supplier of particular goods or services, or are interested in receiving information about a particular topic. The network operator searches for members who appear to be relevant to the members’ area of interest.

For example, when a member notifies the network operator that they are interested in finding a marine mechanic in the Sydney area, the network operator searches for sellers who meet those criteria. The network operator may send a message to the member to advise the contact details of a relevant seller. Alternatively, the network operator may send a message to each relevant seller to advise the contact details of interested member. Either way, the seller, and optionally also the buyer, pays a fee for this service.

–          Supplying member data to other members, who may use the member data in their own advertising or promotional campaign. The member data may be contact details of members who meet specific demographic criteria. For example, the member data may be the names of all financial planners within a 20km radius on the Sydney CBD.

–          Offering members speaking opportunities at paid business events. For example, the members may be charged directly or there may be a profit split on the proceeds on ticket sales.

  • Training fees: fees paid by members for training courses, such as online courses.
  • Events fees: fees paid by members to attend events arranged by the network operator. Events may be online or in person.

For example, the network operator may arrange business matching events, such as lunches in which potentially compatible members are invited.

  • Marketing licence fees: fees paid by sales agents for the right to act as a sales agent of the network operator.
  • Digital card design: fees paid by members to create a digital version of a business card which they can use in various ways, including referrals.
  • Premium consumer account fees: fees paid by consumer members for extra features associated with their membership. There are many options, for example:

–          premium seating at events,

–          higher rewards, and

–          group buying discounts.

  • Premium business account fees: fees paid by business members for extra features associated with their membership. There are many options, for example priority search rankings, and those features those listed above under “premium consumer accounts”.
  • E-commerce transaction fees: fees paid for each electronic transfer of funds where an e-commerce system is included in the network to facilitate member-to-member transactions. The fees may be very low, and may be aimed at recovering the cost of operating the e-commerce system. The fees apply to transactions conducted with reward points and with money.

Profit sharing

A portion of financial turnover in the network is returned to members in the form of reward points and money. The network may return higher amounts to members who contribute to the growth of the network. For example, BHive Australia Pty Ltd returns on a monthly basis 50% of all profit to members who help to grow the network.

Benefits of the network to members

Consumers

  • An opportunity to earn reward points.
  • Gain access to ratings and feedback about sellers in the network.
  • An opportunity to efficiently notify sellers when needing particular goods or services, and to request offers and quotes from relevant sellers.
  • An opportunity to share the profits of the network.

Business members

  • An opportunity to attract clients.
  • An opportunity to reduce marketing costs. A network directory makes it easier for buyers to find an appropriate seller.
  • An opportunity to increase the proportion of leads who convert to clients, and to shorten the sales process. The trust created by personal referrals and user ratings can be a powerful influence on a person’s decision to buy.
  • An opportunity to better market to their target audience.
  • An opportunity to be notified when a potential buyer has a need for goods or services.
  • An opportunity to earn reward points.
  • An opportunity to share the profits of the network.
  • An opportunity to be promoted by the network
  • No financial risk in joining as there is no membership or joining fee. There are optional services that the member may take up if desired.

Sales agents

  • An opportunity to earn reward points.
  • An opportunity to share the profits of the network.
  • An opportunity to earn a residual income from a large number of stable business members.
  • An opportunity to monetise social networks and contact databases.

 

Network operator

  • An opportunity to earn money.
  • An opportunity to be influential in the business community.
  • Develop a valuable database.
  • Develop strong business partnerships
  • Contribute to charity and community projects.
  • Promotion using a large-scale commission-only sales force.

Hosting the network

The network is hosted online and members gain access to it via any internet-enabled device. The network may provide members with custom-designed web applications and/or a web browser interface. Preferably, the network can be accessed on mobile internet-capable devices such as smart phones, tables, laptops and notebooks.

Details of the system architecture are disclosed separately in documentation from the developer.