David Fiske Affiliate Marketing & Web Development

The credit crunch seems to be taking it's toll as some merchants re-evaluate whether the affiliate revenue stream is adding value and is cost effective.

There's more and more merchants leaving the affiliate space at the moment for various reasons, some publicly discussed, others not.

Having worked as a full time affiliate marketeer (not musketeer) for 2 years, I've dealt with many a merchant and many an affiliate program, ranging right through the broad spectrum of good to bad. It's this experience I draw from in this post when I attempt to concoct the perfect affiliate program.
 
Choosing a Network

Choosing a network is kind of like choosing your broadband supplier. There's some that offer a free WiFi router and others that offer a faster service. There isn't one network that seems to tick all the boxes from what I have seen (although several come close).

I don't understand the logic of merchants using multiple networks as simplistically, this adds more cost to the affiliate channel bottom line. The only arguments for this that I can see is that it maximises the pool of potential affiliates whilst allowing affiliates the choice to switch networks.

Personally, I would stick to one network which offered everything I need. If it resulted in less affiliates joining, it would mean I could spend more time talking to them, helping to drive increased sales.

Leakage

You've got the programme set up but have you looked at your website from an affiliate perspective? That big 0800 sales telephone number doesn't help us. The problem is that many merchants consider themselves to be competing with their own affiliates. The number of merchants now running their own affiliate banners nearly outstrips those that aren't. When did this become acceptable?

If you are going to run an affiliate program, accept that you need to work with them rather than against them. Take down any external link banners and remove that fat ugly telephone number post-haste. We can only do our job if you help by making it easier. By minimising leakage you'll gain the respect from affiliates and they would be happy to promote your brand.

Rates

Affiliate commissions vary depending upon which way the wind is blowing. Sometimes it's blowing a gale and we see commissions drop to 0.5% (Play) or even 0.1% (ebuyer).

The rate changes don't usually kick up a fuss - it's the way they are implemented. Overnight changes with no notice tends not to make too many friends in the affiliate world. Changes at 5pm on a Friday don't go down too well either. I understand that changes need to be made based upon seasonality and stock lines - but these changes are foreseeable with a bit of basic forecasting (my degree finally gets used!).

The perfect affiliate program would implement commission changes with a decent amount of notice (say 30 days). A fair commission would be paid out and if it was necessary to reduce commissions to a pathetic rate, I would look to increase them ASAP thereafter.

Incentives

I won't hide the fact that I think incentives are great. This Christmas has seen the demise of the big network competitions that we saw last year, replaced with loads of merchant competitions.

The issue with incentives is that they are usually given to the top tier affiliates as they are based upon performance - fair enough, they do drive the most sales but they probably aren't appreciated as much as they would be by smaller (poorer) affiliates. Red Letter Days has reversed this trend by offering a prize for driving around 8 sales in 2 months - a realistic target for the smaller affiliates.

My perfect program would offer regular incentives open to as many affiliates as possible. It's important to keep the top performing affiliates (20%) happy but it's also important to keep the remainder (80%) happy too. By giving them something they could work for (e.g. a TV, vouchers, cash, a flexible holiday, etc.), you will help foster loyalty and start paving your way to a reliable honest affiliate for life.

Communication

If you never talk to affiliates, how do you expect them to promote you?

Ideally you'd have an affiliate manager. Not all businesses can factor in the cost of one of these and so it may be worthwhile either employing yourself a general IT person who looks after your website, affiliate program and computers or outsource the management to a decent agency. Choosing one of these is also like choosing a network. Some are good, some are bad.

Ideally as a start, you want to be sending an affiliate newsletter. This should detail your latest offers, your best sellers and anything else that would help your affiliates.

Next on the scale, you would want to talk to your affiliates. A lot don't like phone calls or real life meetings (eek!) so the best bet is via email or something like MSN Messenger. Find out about affiliates and write this down. If you take an interest in what your affiliate does and whether they promote your brand (and if so, where?).

If you can name affiliates from memory, you are doing a good job. Keep communicating with them and keep in-touch. Try and send them some exclusive ideas or help them out as best you can. You're a team.

Ultimately, the best affiliate manager is one that communicates regularly to affiliates, offering advice and tips where needs be. Answer all your emails quickly and help out as best you can t secure the confidence of your affiliates. A lack of of communication, 3 weeks to answer emails and a "couldn't care less" attitude won't get you far.

Oh, and sign up for MSN Messenger. It's a quick and easy way to chat to affiliates whilst keeping the inbox empty.

Hours

Affiliate marketing isn't a 9-5 job. It's a 24/7/365 job. Some take Christmas Day off but some don't. It depends on the sites and what needs to be done.

Whilst it's unrealistic for affiliate managers to be chained to their desk 24/7, it's nice to be able to contact a couple of key people within the industry who work outside this usually time window. I always try to have short and sweet conversations with them rather than asking them to recode their site at 10pm but some seem intent on bending over backwards and would literally recode their site at 10pm!

By being contactable outside of the 9-5 bracket is an advantage though not essential. Affiliates are usually very focussed folk who need answers ASAP. We tend to forget why we contacted you if it takes a month to reply. A delay of just 24 hours could see their advertising efforts being pumped into your rival.

You Get What You Pay For

This morale is true both to life and affiliate marketing. You get what you pay for. Pay peanuts and get monkeys (apparently). If you go for the cheapest network with the IT guy managing it (who has never heard of affiliate marketing) and pay 1% on sales of gadgets will not get you far. Offering a competitive 20% on gadgets with a network that offers bells and whistles will cost more but will help you expand your pool of affiliates.

Ultimately, the more you invest in your affiliate program, the more you'll see returned. Stop spending on it and it will contract. Spend money wisely on those who deserve it or those who have potential to maximise the effect of your spending efforts.