Has Karma, a Wisconsin based startup, is launching https://www.haskarma.com to let local, offline businesses create and run referral marketing programs that can get the same visibility online that internet affiliate programs have enjoyed for years. The Company’s founders believe referral marketing is a solution for several problems facing local businesses including, lack of visibility online, diminishing effectiveness of traditional advertising channels, and the prohibitive costs of most advertising. By putting referral programs for local businesses online, Has Karma creates the opportunity for these businesses to reach much larger audiences through their affiliates. The affiliates can earn referral rewards by sharing a business’ promotion via email, text, social networks, websites, and blogs. Further, paying rewards for referrals is entirely at the business’ discretion. Has Karma works on an honor system. Businesses that choose to reward referrals will have the good karma of receiving more referrals.
“Referral programs for local businesses are stuck in the past,” explains Has Karma co-founder, Martin Machtan. “Local businesses have referral programs, some of which rely on passing out physical cards. Has Karma changes the scope and capability of a referral program for these businesses.” Machtan explains, “Has Karma keeps the business in constant contact with its referrers. They can push out new promotions regularly to their network of referrers. Businesses can change their incentive for referrers at anytime. Referrers can post their affiliate link or code in any media: email, social networks, blogs, text message, or website.”
Has Karma offers businesses an entirely different value proposition from traditional advertising. Businesses choose when they want to enter a code for redemption. This eliminates fraud and abuse. The business has complete control over what it is spending on referrals and is only paying referral rewards when it receives a referred sale. This honor system works for Has Karma because a business with a successful referral network has every incentive to pay rewards in order to continue benefiting from referrals. At the same time, businesses get an enormous benefit from the ability to control every payment and use discretion in cases of abuse.
Scarce research exists on the value of referrals, but a key joint study from Wharton School, University of Pennsylvania and Goethe University Frankfurt, supports claims that referred customers are more profitable, loyal, and satisfied than non-referred customers. The Has Karma team’s discussions with business owners consistently backed this up both anecdotally and with hard numbers. One business that tracked referrals found their sales team’s closing rate on appointments set by referral was exactly double that of non referred appointments.
For publishers already covering local markets, Has Karma may be a platform for incorporating local affiliate revenue into their revenue mix. A publisher that wants to recommend local products and services today has limited solutions available to enable the seamless tracking of customers. With Has Karma, the publisher can help the advertiser setup a promotion on Has Karma and set itself up as an affiliate. This quickly enables the publisher to distribute affiliate links for a local business.
The Has Karma team originates from the same small Wisconsin town. The founders envision Has Karma as a solution that can help many of the local businesses they’ve always supported. Their past experiences launching startups, working with small businesses, and developing apps led them to the conclusion that the best tools for local businesses are dead simple and elegant while they also provide the business with ample control. Has Karma makes it simple for businesses to leverage their most valuable resource; their biggest fans and customers; and regularly reach larger audiences at fractions of the cost of traditional advertising.