Having your own affiliate program can be an effective way to reach buyers you otherwise wouldn’t be able to reach without a lot more time and effort. And when you attract the right affiliates, it can even boost your credibility. After all, many buyers make purchase decisions based upon the recommendations from marketers they know, like and trust.
But before you start your own affiliate program there is a lot to consider. What do you need to do to make the most sales? Attract the best affiliates? Make everything run smoothly and seamlessly?
Here are points to take into consideration, whether you’ve already set up an affiliate program or you’re about to:
Are You Leaking? Every affiliate who takes a look at your program is going to want to know if you have leaks. That is, are there any links that lead prospects off of your merchant website and onto someplace where the affiliate won’t get paid? For example, are you linking to other pages or other products? Do you have other ads, banners, link exchanges, etc. on your site? Are you using Adsense? Is there anyplace where traffic could leak out and be lost? Affiliates hate this, and rightfully so. An affiliate puts effort, time and money into sending traffic – they want that traffic to be held captive by your sales process until they either purchase or leave on their own accord.
Are You Going to Use a Network or an In-House Affiliate Program? A network provides tracking and an interface for the merchant and affiliate to communicate. The network also makes the payments to the affiliate, unlike an in-house program where the merchant is responsible for paying the affiliates. In-house affiliate programs are run either on software the merchant purchases, or software that comes with the shopping cart they’re using.
Basically it boils down to how much control you want, versus how many responsibilities. If you want the ultimate in flexibility and control, you’ll want to run your program in house. You’ll have access to all of your affiliates information so you can contact them, unlike some networks that are available for running your affiliate program. However, if you want a built in pool of affiliates and someone to handle the reporting and tax-forms, then use a network.
Are You Using an Affiliate Manager? Or an OPM? An affiliate manager works directly for the merchant to manage the affiliate program and recruit affiliates. An Outsource Program Manager is a consultant who runs multiple affiliate programs for multiple merchants.
A good affiliate manager will more than pay for him or herself, but finding one isn’t easy. Your best bet is often to find someone experienced in online marketing and then train them to be an affiliate manager.
TIP: Make at least a portion of their pay performance based – that is, pay them a percentage of sales. The more active affiliates they bring on and the happier they keep those affiliates, the more they will earn through the increase in sales.
If you want to try using an OPM, you can find many companies that supply them through Google. A good OPM will have plenty of established relationships with affiliates which is a real benefit.
You can also use an OPM to help get you started. Once you are more established that same OPM can help to train your in-house affiliate manager.
And obviously you can also act as your own affiliate manager in the beginning.
You’ll Want Plenty of Affiliate Tools. This includes banners of various sizes, short and long emails, Text-based ads, etc. Are you going to create these yourself? Or hire someone to do it? Conversion is key – if spending money to get it done right translates into enough sales, then obviously it’s worth it. Another factor to consider is that professionally created tools will tend to attract more affiliates and also a higher caliber of affiliates.
Is Your Offer Already Converting? If it’s not converting without affiliates, it won’t convert with affiliates. Also, affiliates want to know what the conversion rate is before they will consider promoting, so you’ll want to send some highly targeted traffic to any new offer before asking affiliates to promote. If you have an in-house list, then this should be as easy as making a blog post and sending a few emails. If not, hopefully you are friends with at least a couple of list owners who will test it for you. Otherwise you’ll want to buy traffic or use some other means to send targeted buyers to your site.
Do You Have a Terms Of Service for Affiliates? (Also known as an Affiliate Agreement) If not, you need one before you start recruiting affiliates. You need to clearly instruct affiliates on what they can and cannot do. Don’t go overboard on this or you’ll end up tying your affiliates’ hands, but also make sure they’re not allowed to do anything that could jeopardize your business in any way. You’ll want to look at the TOS on other affiliate programs and perhaps even consult with someone on this.
Are You Going to Restrict or Limit Affiliate SEO? This is relatively new – some merchants are placing language into their Terms of Service that restricts an affiliate’s ability to rank their affiliate promotion on the first page of the search engines. For example, an affiliate may make a video that promotes his/her affiliate link, and get that video on Page 1 of Google’s natural search results. An affiliate may even get a video or webpage ranked higher in the results than the actual merchant websites, and some merchants take a dim view of this.
Frankly and in my opinion, if your affiliate is outranking you on SEO, then you need to improve your own SEO rather than tying the hands of your affiliate. I know there are merchants who disagree, but if your affiliate is ranking on page 1, your affiliate deserves those sales. But this is something that you need to consider in advance. Once an affiliate has made Page 1 is no time to change your agreement and tell them they’re not allowed to rank naturally, because your affiliate will then substitute your competitor’s link for your own.
A good compromise is this: Allow affiliates to rank naturally for any term other than your exact brand name. If you have trademarked your brand name, you can actually enforce this if you choose. More importantly, you can enforce this against anyone else who tries to rank for your trademarked brand name, especially competing brands and their affiliates.
What Are You Going To Pay? If your product is a digital download and there isn’t a great need for customer service, you’ll want to pay at least 50%. If your product is, for example, a monthly recurring billing (such as software, hosting, etc.) that can involve customer service (phone calls, emails, etc. that cause you to hire help) then you might need to pay less. If your affiliate program is basically a way to generate a list of buyers, then pay as much as you can – preferably 75-100%.
Having said all that, here’s what NOT to do: Do not lower commissions on existing sales. For example, if you’re paying 50% on a recurring commission and find you are losing money, do not then reduce that commission to 30% on pre-existing sales. Ever. This is the fastest way to lose your reputation and your affiliates. You can, if you must, lower the commission on FUTURE sales.
Also, do not look for reasons not to pay affiliates. Do not reverse commissions, create loopholes, look for technicalities, etc. The moment you fail to pay an affiliate what they earned, that affiliate will tell others, often in very public forums. It’s simply not worth alienating present and future affiliates because that commission you save today can cost you thousands of sales in the future.