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Affiliate Marketing: How to Boost Sales and Minimize Risk

by Kimberly Smith  |  
May 19, 2009
  |  1,026 views

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.

How to Minimize Risk

  • Establish policy: A well-thought-out policy is your best defense for safeguarding your brand. It should include what you consider to be acceptable and unacceptable marketing methods when your brand is attached: for example, whether affiliates can use incentives in their promotional efforts; whether direct mail or email promotions are allowed and, if so, any rules that must be followed; which search terms are off limits for affiliates; and so on.

    You should also clearly communicate how your brand, logo, and taglines can and cannot be used, along with the repercussions for not adhering to policy guidelines.

    Your affiliate agreement/contract should also include a statement that verifies that program participation is subject to compliance with your affiliate policy.
  • Do your due-diligence: When affiliates apply to join your program, review each application thoroughly, then do some research to ensure that affiliates are who they claim to be, that they are on record for owning the domain they plan to use, and that there is nothing negative attached to them or their domains that could potentially harm your brand.

    Collins also recommends manually checking each site to ensure it is legitimate, well established, and representative of the associations you want connected to your brand.
  • Perform regular audits: Also keep track of those sites after the initial assessment to ensure that your brand continues to be properly represented and that affiliates are adhering to your agreement and policy guidelines.
  • Stay up-to-date: It's also a good idea to also keep an eye on what's going on outside of your program, by monitoring industry news and events (such as the "anti-affiliate" legislation established in New York—and others being considered in states such as California, Maryland, and Connecticut aiming to increase state revenue by compelling companies to collect sales tax from residents in states where company affiliates are based). It doesn't hurt to observe and keep tabs on your competition's programs, as well; one easy way to do so, says Collins, is to become an affiliate yourself.

How to Recruit Affiliates

  • Become search-friendly: A variety of directory-type sites—including ABestWeb.com and AssociatePrograms.com—help affiliates locate your program. In addition to listing your program on these sites, optimize your own program webpage for general search by incorporating keywords and keyword phrases into your page content and structuring your page title tags to lead with one or two important keywords. (For additional guidance, refer to "Boost Your Site Traffic (Part 1): 10 SEO Tips for Higher Search Rank")
  • Offer facts, not hoopla: Collins notes that affiliates typically do not respond well to hype. Instead, they want to know what they stand to gain. You'll have more success luring them with the raw facts, such as average order size and average items per click, so that they can get a true sense of how the program measures up against other opportunities.
  • Make it easy to get started: Given the current economy, you may encounter quite a few individuals breaking into affiliate marketing for the first time. Ideas for helping them get acquainted and active in your program include these:
    • Posting FAQs that answer all the basics
    • Providing easy access to available creative (banners, buttons, etc.) and performance metrics (e.g., which ads are currently resulting in the most clicks)
    • Offering assistance in opening an affiliate account for whichever service platform you have chosen
    • Supplying useful tools and tips, such as templates, related content for placement on their sites, and insight into effective marketing techniques for promoting your products


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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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