An affiliate program, for the uninitiated, is basically an interface between you as an online merchant and affiliates. Affiliates are typically webmasters who want to “monetize their traffic” by placing your advertisements on their blog or website. Payouts to affiliates are typically based on performance, usually on a cost-per-action (CPA) or Revenue Share commission model.
So you have a great product that you are selling online from a professional and functional website, but you’re not moving as many units as you would like. You know that affiliate marketing pulls in millions of dollars for some online merchants, and you think your product is ready for a piece of the action.
You may be right, but are affiliates ready for you?
Affiliate marketing can become a key revenue source for your online business, but before you consider joining an affiliate network and forking out for cost of the initial setup, you have some things to consider. First, you want become as familiar with the affiliate landscape you want to enter as possible then try to determine exactly where your product fits in. You would be surprised at how often this important step is bypassed. If you skip this step, you are going in blind.
Take the time to scope out blogs, aggregators, review sites and other sites that would attract visitors in your target market. Ask yourself:
- Where do you see your product offering fitting in?
- Is your target audience going to visit these sites?
- Will they be in a buying mode?
- How are you going to convince them to click through to your buying pages?
Why should an affiliate promote your product over another product?
You need to ask yourself the above question because you can guarantee the affiliates you intend to court will be asking themselves this very same question. In fact, why should an affiliate take the time to join your affiliate program at all?
Affiliate marketing presents a unique challenge amongst the various marketing channels in that, before you can start convincing consumers to buy your product, you first must convince affiliates to promote your product. Unless you’re entering into a paid tenancy deal (website placement in exchange for up-front cash payment) affiliate marketing is a shared-risk venture between the merchant and the affiliate; therefore, you are going to have to earn some credibility before your affiliate program really takes off.
Making your new and unknown affiliate program stand out – and pitching it to affiliates – is a topic worthy of its own article. Here are some factors that will go a long way in setting your affiliate program apart from the rest and also improving your overall pitch to potential affiliates:
- Have a marketable product that has already been proven successful online. Highlight your product USP’s and “sellability”.
- Set a competitive and attractive commission model to kickstart the program.
- Offer regular promotions to your affiliate base to keep your program fresh. New affiliate programs pop up constantly – you don’t want your hard-earned affiliate base moving on to the next new thing and forgetting about you. When your program launches, kick it off with a bang. Tell prospective affiliates about the great promotions you can offer them and their website visitors.
- Since many affiliates select placement based on earnings-per-click (EPC), high conversion ratios are an important factor. If your conversions are strong, highlight this.
- Ensuring that you are providing high-quality marketing materials such as GIF and Flash banner creatives in a variety of sizes and styles, written content such as product descriptions and reviews, and conversions-optimized landing pages.
If you want a successful affiliate program, your main job is to earn trust.
Trust is a hot topic in affiliate marketing, on both sides of the fence. An affiliate partnership – the relationship between you as a merchant and the affiliate – is based on mutual trust. It is a shared-risk venture. Consider this: when an affiliate places your offer on their website instead of another merchant’s offer, they have made that choice based on the fact that they trust that your offer will earn them more commission than another offer. They risk lost commission if your product does not convert on their website.
There are many other things you will need to do to earn trust:
- Be proactive in your communication with affiliates, keep in touch, and build a personal rapport.
- Answer emails from affiliates quickly and professionally, and provide excellent service.
- Ensure that your tracking and reporting is accurate and consistent.
- Establish a regular commission payment schedule and stick to it. Always make sure payments are accurate and on-time – never pay affiliates late.
- Be completely transparent. For example, if you experience a reporting error that has caused erratic figures, be up-front and tell your affiliates before they notice it themselves.
Are you prepared to be patient?
The big attraction of affiliate marketing is that it is performance-based, meaning that you pay commission only on criteria you set, such as a certain kind of lead or revenue earned. However, the affiliate landscape is a highly competitive and complex environment. Beyond the initial set-up investment, your affiliate program will require constant management and a dynamic and comprehensive strategy to grow and become viable in the long run. Until you begin earning affiliate trust and gain placement on websites that are sending you buying traffic, your affiliate program will likely not be drawing significant revenues. Be prepared to invest yourself fully into your affiliate program, and don’t be dismayed if it is still not profitable after many months.
Are you ready for an affiliate program?
Remember that affiliate partners should be thought of as (and often are) companies who are in the business to make money and maximize profit, and by starting an affiliate program you are establishing a multitude of new business partnerships. Every business partnership requires management on many levels.
Merchants are often tempted to simply join an affiliate network, create some banners, and watch the leads roll in with little or no invested effort. In fact, there is no guarantee that affiliates are going to pick up your offer and, without affiliates, your affiliate program is naught but an empty revenue-less shell. When you start an affiliate program, you’re going to be the new guy on the block. If you want to make an impression, you will need to shake some hands and immerse yourself in the community.
You are ready to step into the world of affiliate marketing when:
- Your business is already moving units online and generating strong revenues.
- You have scoped out the affiliate landscape and have determined exactly where your offer is going to fit in.
- You are confident that you can not only sell your product to consumers, but that you can sell your affiliate program to affiliates.
- You are ready to work at earning the trust of affiliates by providing excellent dedicated service and building relationships.
- And you are prepared to invest yourself fully into your affiliate program, constantly evaluate and adjust strategy, and be patient.
If that is all true, then yes, you are ready for a piece of the affiliate marketing action!