Affiliate Marketing: Choosing the Right Program
By Peter Ishikawa
Thousands of affiliate programs are available for you to choose from. While there is no problem finding willing and able potential affiliate merchants, the key is to choose the right ones for you. According to Refer-it.com's Cynthia Arko [2001] the basic criteria include:
- amount of revenue share
- ease of implementation
- e-mail response time
- online reporting capabilities
- customer service
- clarity of terms and conditions
- availability of free content
Advertising and marketing efforts to acquire customers is a big deal and costs you money. The ultimate success of your affiliate marketing venture depends significantly on this investment. If you are willing to do most of that marketing effort for a partner as an affiliate on spec-you don't get paid unless they make a sale or at least acquire a good prospect-this places you in an enviable position.
You certainly won't have to beg a merchant to take you on as an affiliate; you just have to be a viable affiliate who may generate some business and get them a sale. They're looking for people exactly like you and you're an essential element in their business model. So, generally speaking, you have the pick of the litter.
But does that mean you want to load up with every affiliate you can find, turn your site into a "banner farm" and just see how much money rolls in? Of course not. First, your site has to retain its own value or you won't retain your own traffic-it can't be loaded with ads at the expense of other content. Second, you can't afford to clutter your site with under-performing affiliate ads that don't actually make money or that are of no interest to your own visitors. See Arko [2001b] on the evil of clutter and the necessity to maintain an appropriate focus with your own site.
Remember "50% of nothing is nothing"-exceptional terms from an affiliate sometimes means only that their product is no good and you will probably never sell any of it. But their banners still clutter your site and may annoy your visitors (who may also become dissatisfied customers) driving them away never to return. Select just a few key programs wisely and keep the following principles in mind:
- Only affiliate products/services that interest your surfers.
- Only programs that have good terms for potential revenue.
- Only programs that are established and appear trustworthy.
- Monitor performance and reconsider on a regular basis.
There are a couple of important concepts with affiliate relationships that may be unfamiliar. "Two tiered" programs are ones in which you can make commissions not only on sales directly referred by you, but also for signing up new affiliates-and often you may share in their ongoing commissions as well.
The type of program bears significantly on your potential revenues from the program. One thing to watch out for, however, are programs that appear to place far more emphasis on signing up new affiliates than they do on actually making sales. Where the balance is clearly one-sided on the wrong side, you are probably looking at a pyramid scheme. Never walk away from a pyramid scheme-run. Cory Thelfall [2006] has a particularly good practical introduction to two-tiered programs and how to profit from them.
Another key concept is that of "trailing" or "residual" commission. If you send a surfer from your page to the affiliate merchant's storefront and they make a purchase, then you have obviously earned your commission on that sale. But what if there was no sale initially but the surfer returned a week or two later to buy? You deserve some of the credit for acquiring that customer and are right to think a commission is owed. However, as time goes on the entitlement is not so clear. Each program will have a residual income period specified. Two weeks is good as a minimum but some merchants will offer as much as two months.
You will see that-as always-you need to do your homework on the affiliate and their product first, and then make a lot of decisions when considering partnering with an affiliate merchant. The main decisions include:
- Good match of product/service to your site/visitors?
- How is their track record and can you trust them?
- How much support can your affiliate partner offer you?
- Particulars of program-can you make good money?
Arko [2001a] says that the best programs are fully featured, and this is often the hallmark of an exceptional affiliate program. After all, you are going to do your part in generating sales for the partner so they should be offering you substantial support to help with that process. Typical and desirable affiliate resources include:
- online reporting
- an opt-in affiliate newsletter
- co-branded pages
- customizable content
- two tier structure
- superior customer service
- an easily navigated user interface
- a privacy policy
- use of third party tracking software
If committing, you will have your own metrics-traffic and sales stats-and can review your decision periodically. It's not the end of the world if you drop an affiliate who is simply not making you any money, and appears to be of little interest to your own visitors. Your stable of affiliates should be fine-tuned on an ongoing basis to maximize your profits.
Affiliate marketing is something that can add significantly to the value of your site and to your bottom line. It is very easy to do and far too easy to do ineffectively. Remember that your site is number one-not the affiliate's storefront. You need to choose affiliates that will add value to your own site, while also pleasing and assisting your visitors and making yourself some money at the same time.
Affiliate marketing is a win-win proposition under the right circumstances. David Cooper [2006] sums it up: "There is great money in affiliate marketing if you align yourself with a good company with good products."
Peter Ishikawa is a Toronto-based marketer specializing in small and home-based businesses. Contact him at ichikawa@canada.com. Find more of his articles and other useful resources for online entrepreneurs like yourself at www.eBizTutors.com.
References
Cynthia Arko. "How To Identify Quality Affiliate Programs," Refer-it.com 04/11/2001a.
http://www.refer-it.com/article.asp?id=134.
Cynthia Arko. "How to Maintain Affiliate Focus," Refer-it.com 09/06/01
http://www.refer-it.com/article.asp?id=166.
David Cooper. "Setting Yourself Apart from the Affiliate Marketing Crowd," Mainstream Webmasters 01/02/06.
http://www.mainstreamwebmasters.com/article802.html.
Affiliate Marketing Articles Newsletter: www.affiliatemarketingarticles.com.
Cory Threlfall. "How to Profit from Two-Tier Affiliate Programs," Mainstream Webmasters 10/03/05.
http://www.mainstreamwebmasters.com/article685.html.
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