Choosing a Third-Party Solution Provider
Though the do-it-yourself approach may seem more economically viable and can give you absolute control of your program, keep in mind that affiliate programs are becoming more and more sophisticated. Third-party solution providers are in the business of making money from affiliate programs, and they are motivated to stay on top of the affiliate marketing curve. This is very important to your program if you don’t have the resources to commit a full-time staff to running your program.
There is another important consideration to choosing a third-party solution provider. Not only do third networks offer the management systems, services, and software necessary for navigating the details of an affiliate program, but they also serve as a channel for recruiting affiliates. The larger affiliate solution providers advertise heavily, trying to attract interested people to visit their site, learn about affiliate programs, and search for programs that will work for their site niche. This means you have a marketing partner that will help recruit targeted affiliates to your program.
When choosing a third-party solution provider, you should keep these following elements in mind. They are discussed in detail in the following sections:
Cost
Tracking
Affiliate Recruiting
Support
Exclusivity
All these considerations and more should go into your decision of choosing a third-party affiliate solution provider. Use due diligence before hitching your affiliate program wagon to a solution provider’s star. Things on the Internet just move too quickly to get oneself locked into an exclusive agreement.
Cost
Does the solution provider charge a set up fee? How much? Is there an annual renewal fee? Must you pay a percentage of the affiliate’s earnings to the solution provider? How much? Are there monthly minimums that you should pay? How much and at what level do they kick in?
Does the solution provider write checks to your affiliates for you? If it does, what is the check-writing fee? What about affiliate recruiting fees, account rep fees, and banner serving fees? Do they exist? How much are they? Are all these costs à la carte or are they included in your monthly maintenance fees? Which type of fee program fits your business?
Do
| DO use Commission Junction’s direct deposit program. If you use Commission Junction as your affiliate solution provider, use its new direct deposit program to affiliates’ bank accounts using the Federal Reserve Automated Clearing House (ACH) electronic transfer system. Using the system, you can directly pay all your U.S. and Canadian affiliates. |
Tracking
How does the solution provider track and report stats to you and your affiliates? Some programs make you install sophisticated software on your PCs that requires days or even weeks of training to master. Do you have the time and personnel to dedicate to this task? Others require no software installation on your part. The tracking process is entirely Web based. Look at it as the difference between a licensing program and an ASP (Application Service Provider). Programs like these require only a few hours to get up and running.
Affiliate Recruiting
This can be a very important option to you when choosing among solution providers. How well they attract potential affiliates to their site and direct them to programs that fit their market niche can go a long way toward building your program quickly and effectively. On your travels around the Web and the trade magazines you read, take note of the different banner ads placed by affiliate solution providers and see how well they are promoting affiliate programs to Web site owners.
Support
When you pick up the phone or send an e-mail you want real support at the other end of the line from you solution provider. Does she provide this? Is she prompt in her replies and does she answer your questions accurately? And what about your affiliates? How well does the solution provider support them? If she offers affiliate support, is she proactive in responding to your affiliates? If she is offering technical support or is writing your checks, can she be easily reached and does she respond promptly to requests?
Do
| DO be aware of any contractual clause that prevents you from using any other third-party solution provider while under contract with another. This could limit the growth of your program. |
Exclusivity
This one can be a show stopper. Does the solution provider require that you use ONLY her services and forbids you under contract to use any competing solution provider while you are with her? If so, this can dramatically reduce your visibility to potential affiliates. It can also hamper your attempts at joining other types of programs that, in themselves, are not solution providers but let you offer your products or services to their affiliates. Examples of these programs are ePod and vstore. As a merchant, signing an agreement with an exclusivity clause can be too much a price to pay if you intend to keep your affiliate program flexible and willing to take advantage of every new affiliate program improvement that comes along later.
Don’t
| DON’T sign with a solution provider who excludes you from using the services of a competing solution provider. Look for an exclusivity clause in her contract with you. |