What Do Affiliates Want?
As affiliate programs on the Net mature, merchants are becoming more selective about the affiliates they choose. Likewise, potential affiliates are doing the same. Companies with successful affiliate programs become successful because they think like their affiliates. They plan their program from the affiliates’ point of view. As in most business endeavors, what separates the successful companies from the ones that fail is focus on the customer. And in this case, the company’s affiliate is not only its business partner but, to a large extent, its customer as well. It pays, when planning your program to think like your affiliates.
What Are Super Affiliates?
| Super affiliates comprise that small percentage of sites that generate the lion’s share of the revenue for your program. They are born marketers and are very successful with the affiliate programs they promote from their sites. |
And for good reason.
At first sight, building an affiliate network seems like an easy and inexpensive way to market your eBusiness. But don’t let the simplicity of the concept fool you. First of all, the percentage of affiliates that sign up for your program and then become active in your network is quite low. Forrester Research says that the average affiliate program has about 10,000 affiliates. But only 10%–20% of the affiliate sites actually participate in the program—that is, those that actually place your affiliate link on their site. And of those 10%–20% of active affiliates only 20% of those are super-affiliates—those that produce the majority of the revenue for your program.
So why the vast discrepancy between affiliates that sign up and those that actually participate in a merchant’s program? It could be chalked up to laziness or general apathy about their Web site. But these answers are too simple. Maybe it’s because the merchant’s program doesn’t give affiliates what they want, and once they sit down to execute the program, they find out that it’s not all that it’s cracked up to be.
Thinking like an affiliate, what program elements and level of service would attract you (see Table 4.2)?
| Be treated as a true business partner |
| A long term relationship |
| Good commissions or revenue generating potential |
| Access to the life-time value of the customer with life-time commissions |
| Restrictions on the number of affiliates in the program |
| Adequate communication with the merchant |
| Adequate training on the product or service |
| Good graphic and text links that sell |
| Adequate marketing support |
| Be part of a community with other affiliates |
| A good reporting and tracking program available for reports 24 hours a day |
| An honest and credible program with a credible merchant |
| Good service for customers sent to the merchant |
| clear and fair affiliate agreement with no hidden restrictions |
| Offers that are continuously updated and fresh |
| A wide selection of products to sell |
| Payments made on time |
Source: Glenn Sobel
Do
Let’s take a more detailed look at what it takes to build a successful and profitable affiliate program from the affiliate’s point of view.
True Partnership
Successful affiliate sites spend a lot of time and give up valuable screen real estate to promote a merchant’s product or service. They want to know that all this time and effort is not wasted, so they are looking for affiliate programs that see them as true business partners.
Those merchants that see their affiliate program as just free advertising across the Net instead of building a true business relationship across a network will either attract poor affiliate partners or see their programs slip from favor. After investing both time and effort, affiliates expect a binding agreement with a merchant that doesn’t give the merchant the ability to cancel the agreement and drop them on a whim. Affiliate programs are not short-term advertising campaigns. Good affiliate partners want to establish a long-term relationship with a merchant and benefit from all the advantages this relationship can bring.
Affiliate program commissions are not about how much, but how long. More and more affiliates are interested in getting paid for the lifetime value of their customer referrals. They also want to keep their visitors on their sites and not shepherd their hard-earned traffic off to a merchant’s site. They want to own the customers that they generate for the merchant. They don’t want to refer a life-long customer to a merchant then get paid only for the first sale. Affiliates also look for residual programs that offer commissions where customers sign up for a continuous service that requires periodic, regular payments that the affiliate shares in.
Do
| DO understand that when an affiliate sends you a customer, they want to earn revenue from all their future purchases. |
Affiliates want to know that the product or service offer they are promoting is not being offered on thousands of other sites. Would it make sense for Burger King to open five stores on one block? Of course not. The same goes for affiliates. Affiliates want to join programs that are somewhat exclusive and that have restrictions on the number of affiliates it will have at any one time.
Adequate communications with the merchant is also on the list of affiliate wants. They want merchants who will communicate with them frequently, telling them what’s new with their programs and how to better increase sales. They want to have all their inquiries answered promptly and betreated like a true business partner. And speaking of increasing sales, affiliates want to be trained properly on how to sell the products or services of the merchant. They need to know in detail the features, benefits, and target market—useful advice about maximizing their sales, and yours. It’s in the interest of your business to help your affiliates succeed. And all this information should be available before they sign up for the program, not after.
Along the lines of communication, affiliates want to be part of a community where they can interact with other affiliates, gain support, and exchange ideas. Again, it’s in the merchant’s interest to foster support for their affiliates, yet many affiliate programs offer no community support. Community discussion boards offer an exchange of information between affiliates in addition to news and expert advice (see Figure 4.4). Merchants should provide this kind of communication opportunity and encourage affiliates to help and support each other.
Figure 4.4. eGroups provides a service to any company or group that wants to establish a discussion list.
Do
| DO offer affiliates ways to build a database of prospects from their site that can be later converted into customers and to make future sales from them. |
As a true business partner with access to the lifetime value of its customer, a merchant should provide the ability for an affiliate site to capture, build, and market to not only his or her current customers but to prospects, too. Affiliates want a program that encourages repeat business. The merchant could build a prospect database by having the affiliate place sign-up links on his or her Web site. The merchant would manage the database for the affiliate and market to it periodically with special offers through which the affiliate would gain additional revenue.
Finally, promoting a merchant’s affiliate program sometimes requires an affiliate to divert traffic away from his or her site and towards the merchant’s. If so, affiliates want to be properly compensated with a reasonable commission structure or referral fee to compensate for the lost traffic and the loss of future sales.
A Credible Program
The last thing an affiliate wants to do is damage his credibility with his visitors. In addition, an affiliate is looking for an honest and credible affiliate program from a merchant.
If a customer referred from an affiliate to a merchant is unhappy with his or her purchase or service after the sale, the affiliate’s credibility will suffer. Affiliates will be looking for not only a credible affiliate program, but also high-quality products and services to sell. A good affiliate will not offer shoddy merchandise, products, or services to his or her visitors or associate with merchants who offer poor service after the sale.
Don’t
| DON’T surprise your affiliates after sign-up with restrictions on payment. Be up front and clear on how and when you will pay your affiliates and post this information on your site. Affiliates will run—not walk—from programs that seem to have hidden restrictions on the sales or referrals they perform. |
If customers feel that they were overcharged, received poor service or support, that the offer did not measure up to its promotion, or that they were scammed—all this will reflect on a merchant’s reputation.
Credibility also resides with the program itself. Merchants should be up front on everything about their program. They should hold nothing back. The last thing affiliates want after signing up for a merchant’s affiliate program is surprises, such as how they will be paid. Affiliates want to see a professional, considered, and detailed affiliate agreement with few or no restrictions on their ability to sell your and other merchant’s products or services. The agreement should be posted on the merchant’s site for all to read in simple, understandable language—no legalese—before the affiliate agrees to join the program.
The agreement should be fair with expectations on both side spelled out clearly.
What’s SPAM?
| Spam is unsolicited e-mail. It’s the junk mail of the late twentieth century. It clogs e-mail servers around the world and sucks up needed bandwidth on the Net, and it’s the quickest way to create a bad reputation for you, your company, and your product. |
Good affiliate partners will shy away from outright scams, deceptive or misleading promotional materials, or no clear examples of the merchant banners and links—or other means—for use on their site. A “too-good-to-be true” promotion of a program where affiliates are told they will make thousands of dollars overnight will attract sites that will do little to enhance your affiliate network.
Another consideration that affiliates look at is how the merchant treats spammers. The last thing a merchant or any other reputable affiliate needs is to have the reputation of the merchant’s product or service besmirched by other affiliates in the program (or even by the merchant itself) for sending out unsolicited e-mails to every one who has an e-mail address.
Offers That Sell
Affiliates are looking for products and services that match the content of their site. They are looking for offers that are consistent with the theme of their Web site and the products or services should appeal to those who visit their site. After all, a parenting site would rather sell children’s clothing, books, and toys than a Smashing Pumpkins CD. A site that does movie reviews would rather sell videos or DVDs than strollers. An affiliate that caters to Webmasters is looking for software programs, not gift baskets.
Do
| DO take advantage of seasonal and special events to create unique promotions that your affiliates can offer their site visitors. |
Affiliates need to cater to the wants and needs of their site audience.
They are also looking for programs that have good growth potential with an expanding product or service offering. Good sites work hard to keep their content fresh so they can attract return visitors. The same goes for the affiliate program they join. Affiliates want to offer products and services that keep customers coming back to see what’s new and exciting. They don’t want to join programs whose product offerings are a dead end, so affiliates will look for a merchant program that not only sells multiple products and services but also makes timely offers. Selling one product or service gives up a lot of valuable Web page space, so that product had better be highly profitable to sell. A merchant’s program would be better accepted by affiliates if it sold a variety of products or service. Book, music, and movie stores are good examples of merchant programs where a variety of products can be offered. Clothing, sports equipment, and toy stores are others.
In addition, affiliates are looking for merchants who take advantage of the seasons or special occasions to promote their products. Christmas, Hanukah, Easter, Passover, Father’s Day, and Mother’s Day are seasonal events that affiliates can exploit to sell products to their visitors and keep their offers fresh. Birthdays and anniversaries offer other opportunities for fresh content.
Merchants who understand the need for this fresh content will attract the right kinds of affiliate partners.
A Fair Program
For an affiliate, the revenue is what an affiliate program is all about. That’s why they joined in the first place.
Do
| DO allow affiliates to purchase your product or service and apply their commission as a discount. |
They will be looking for a fair program—one that adequately compensates them for their efforts. They want a high first-sale payout if they are working on a commission basis—then credit for all additional revues generated by customers referred to the merchant. Affiliates look at the reliability and frequency of payments a merchant’s program offers. The sooner and more frequently affiliates are paid, the better. They also are looking for programs that are free to join. Any program that requires an affiliate to pay to join will almost certainly fail. In addition, and if they can, affiliates seek out merchants who offer programs that do not compete with them.
Affiliates feel that they are a key part of building a merchant’s business, and being paid to help build the business of the merchant seems only fair. Offering two-tier programs that reward affiliates for both referring other affiliates to the merchant as well as for sending paying customers is a way for affiliates to cash in on the work they’ve done for helping build the merchant’s business.
Affiliates will run—not walk—from programs that seem to have hidden restrictions on the sales or referrals they perform. Affiliates don’t like high sales requirements for a fair commission or fee, unreasonable sales or referral minimums, or long periods before getting paid.
Reliability is another concern of affiliates. The affiliate programs that have a reputation for late or non-payment of commissions to Web site owners will not succeed. A merchant should explain clearly the payment process and when affiliates should expect their checks. Affiliates also need to know whether there is a minimum check that the merchant will cut. If there is a minimum payment, they should be told whether any processing fees will be applied.
Finally, affiliates expect to be able to buy a merchant’s product or service themselves and apply the commission they normally would get to the purchase. That is, they want to buy the product or service at a discount equal to the commission they would normally earn.
An Uncomplicated Program
Affiliates are a busy lot. It’s enough just to keep their Web sites fresh and up and running. So they are not looking for any more complications in their life. And that includes any affiliate program that they join.
In any program, affiliates must physically place links on their Web pages and/or e-mail. Any kind of links affiliates need to retrieve or any Web-based store design they must perform should be easy to find on the merchant’s site and easy to place on their site. Affiliates do not want to hunt around a merchant’s site looking for this material. There should be a separate place on a merchant’s site—or the affiliate solutions provider site—where affiliates can easily and quickly retrieve this information.
Most important of all, affiliates want a simple way to retrieve reports on impressions (how many times their visitors have seen the merchant’s product or service offer), click-throughs (how many times visitors click on the merchant’s offer), the number of sales made or actions performed by their visitors and, of course, the revenue they have earned. These reports should be available 24/7 and be easy to understand.
The bottom line to all this is loyalty. If you want loyalty from your affiliates you need to show the same. Glenn Forde, affiliate account manager for i-traffic, concurred. Here’s what he had to say:
“The best way to keep top affiliates loyal is to maintain a relationship with them. If you regularly communicate and form a mutual trust, that produces loyalty in the truest sense. Beyond that, ensure that the basics, including on-time payments, regular chances for bonus compensation, site promotions, and a variety of links, are delivered.”
The secret to affiliate loyalty for the ClubMom affiliate program (www.clubmom.com/areas/corporate/affiliates.jhtml) came from a mantra on their own site: “ClubMom asks Moms what they want and gives it to them.” After a callout in the ClubMom affiliate newsletter asking the affiliates what they wanted, they responded en masse, and it was interesting to see that they had quite a few common requests. They wanted monthly commissions, links directly to the registration page (not the home page), a community where they could interact with other affiliates and, most of all, they wanted a timely response when they had problems or questions. True to the mantra, the affiliates got what they wanted.
Woodrow Wilson once said, “Loyalty means nothing unless it has at its heart the absolute principle of self-sacrifice.” That’s what dedicated affiliates do. To a large extent they are sacrificing the time, resources, and energy to promote a merchant’s program. They expect a lot in return.
Why Affiliate Programs Fail
For an affiliate program to work, it must be a win-win program for both the affiliate and the merchant. Glenn Sobel accurately describes what it takes to create such a program and what to avoid.
Affiliate programs are capable of simultaneous success and failure because there are two sides to the relationship. Seek to create a win-win (merchant succeeds and affiliate succeeds) relationship with your affiliates (see Table 4.3).
| The merchant offers a credible product or service at a reasonable price. |
| The merchant handles back-end details correctly. |
| The agreement, commission, and tracking system used for the affiliate program are fair to all parties. |
| The merchant honors its relationships with its customers and affiliates. |
| The merchant provides the tools necessary for affiliate success, and limits affiliations to sites that make sense for its roduct or service. |
| The affiliates take reasonable steps to promote the merchant’s products and services as part of their overall marketing efforts. |
Source: Glenn Sobel
Additionally, it stands to reason that a merchant is going to fail when the affiliates fail. Obviously, if an affiliate is inactive, he or she cannot succeed. Ken Evoy, President of SiteSell.com (affiliate.sitesell.com), moderated a chat at Affiliate Webinar 2000 (www.affiliateWebinar.com) with the topic, “Why are so many affiliates inactive?” According to Ken, fewer than 1% of affiliates earn checks over $100 from any given merchant.
Do
| DO join your competitor’s program. See what they offer, and see how you may be able to improve upon it. |
Ken boiled the reasons for affiliate failure down to five points:
The average person simply does not know HTML (and never will)
Search engine mastery is beyond most people
Poor support/education/tools from some merchants
Most affiliates are not willing to put in the work once it’s clear that the affiliate model is not a “get-rich-quick” deal
Most affiliates make fundamental mistakes, such as selling instead of pre-selling
Ken states that his top affiliates all pre-sell with great content, rather than SELL-SELL-SELL! In response to the mass inactivity of affiliates, Ken created Site Build It! (buildit.sitesell.com), as well as a free course, the Affiliate Masters Course, to help people overcome all the common barriers. Subscribe to it by sending a blank e-mail to [email protected].