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Affiliate Marketing: How to Boost Sales and Minimize Risk

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Affiliate marketing is in a growth stage, strengthened by the state of the economy—including high unemployment across the country (and the globe, for that matter)—and an explosion of bloggers who are recognizing the profit-sharing rewards of recommending select products to their readers.

The result is an opportunity for businesses that are willing to forego some control in order to leverage the entrepreneurialism of independent contractors and expand awareness and sales in a budget-conscious manner.

But as recent history shows, such a move can be catastrophic if not approached and managed in a way that protects the company's brand from becoming abused through affiliate profiteering.

With extensive experience on both sides of the equation—as the manager of company affiliate programs and as an affiliate looking to make a living through customer referrals—Shawn Collins, author of AffiliateManager.net and the AffiliateTip blog, knows what it takes to minimize that risk and establish a profitable program that attracts and engages affiliates for the long-term.

We've included his tips and more in the following guide for launching an affiliate program that works for, not against, you.


What You'll Need to Get Started

  • Products with potential: Start with one or two of your strongest products—the ones that are easiest to market and which tend to have strong conversation rates and are therefore most likely to produce results for your affiliates. Such products will help increase uptake and enable you to promote high-yield potential to new and current affiliates.
  • Third-party tracking tools: Using an online technology vendor such as Commission Junction, Kowabunga's MyAffiliateProgram, Direct Track, LinkShare, or RevTrax (which specializes in offline sales programs) will help instill confidence in your program and save you the headache of tracking and calculating commissions for each affiliate.

    Collins suggests that you request demos from each vendor before choosing the one that best suits your needs, and that you negotiate to get the best price.
  • An affiliate manager: You can't expect your affiliate program to take care of itself or run on autopilot after launch, warns Collins, because a successful program requires ongoing oversight, as well as relationship building, to keep it going. It's important to assign a dedicated body, in-house or through outsourcing, to manage the program day to day, he says.
  • A fair commission structure: When determining your commission structure, consider the sum of all of your costs, including those for employing the technology and affiliate manager, as well as what other companies in your vertical (i.e., your competition) are offering.

    It's not unusual to present a tiered solution that pays higher commission rates to top performers or for bringing in certain types of business (for example, some companies pay more for business originating from certain states.), but be sure to clearly communicate the requirements of each tier and include a statement about your base rate.

    Also, don't start out by offering higher commissions in an attempt to lure affiliates, then lower those down the road—that will only serve to alienate affiliates and tarnish your program's reputation.


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Kimberly Smith is a staff writer for MarketingProfs. Reach her via kims@marketingprofs.com.

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  • by Cindy Eagar Tue May 19, 2009 via web

    Fantastic article! We've seen time and time again how running an affiliate program is a highly effective way to explode your business.

  • by kimberly mccabe Sun Jul 12, 2009 via web

    Speaking of affiliate marketing.....can someone tell me how I can put the marketingprofs widget on my wordpress blog??? still working on my widget-mastery! :)

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