Know-How Exchange : Strategy

Your underlying question is: "How much should we pay someone to get us new clients?" First, at $49/month cost to the client, how much of that is profit? Next, what's the lifetime value of your client (once they sign up, on average, how long do you expect them to stay)? How much are you willing to pay to earn this lifetime value? You need to pay enough to entice your affiliates, but want to likewise keep sufficient profit for yourself.

You can see what other affiliate programs are paying and seeing what their results are (for example: https://www.cj.com/). Likewise, you can try different offers and measure the results you get, fine tuning as-you-go.

It sounds like this is a new product/service, with little or no sales track record.

At $600/year/subscriber - I doubt that many resellers would be all that interested if you can't show them proven annual revenue potential to them. Also - I doubt that the margins would excite them.

I suggest you concentrate more on building the subscriber base and getting a solid handle on that - not only will it bring in revenue, it provides a critical proof-of-concept test of your offering.

Don't get ahead of yourself - concentrate on direct sales before you worry too much about channels of distribution. Channels bring with them other issues - such as cross-channel conflict, conflict with direct sales, who owns the lead, etc., etc.

You'll have your hands full just with building direct sales.

Jay -- I wasn't originally thinking of affiliates as a channel of distribution. It was suggested to me as a strategy and so I'm open to it but not very familiar with how it works, why it wouldn't, etc. I took your advice to go to CJ.COM but didn't find the kind of information you suggested. I will call directly to see what I can learn from them. Thank you.

J -- you're partially correct. It is a new service, but it's based on a higher end service we've been selling directly for over a year now.

The two offerings are different and the appeal of the 'higher priced spread' is limited to a very select audience because of the labor-intensity of that service.

During that time, we had people asking us for a simpler service without all the bells and whistles and 1:1 coaching that made up our primary offering. (Which, we're continuing to offer, BTW.)

After collaborating with some of our early adopters, we went back and developed a practical and largely self-sufficient service to offer. It is because of the simplified and "almost DIY" nature of our new service that an affiliate strategy was suggested as a worthwhile possibility to consider.

I'm 110% behind the 'direct sales' comment you made. I believe in 'trusting in God' but 'tying up my horse' myself! ;-) I've actually got several groups in mind that suggest a good fit and will become the basis for a direct sales effort.

My interest in the affiliate channel is to augment and, over time, develop a much wider audience of clients than our own resources (mostly time) are likely to produce in a similar amount of time.

QUESTIONS:

All that said . . . I'm still trying to get a feeling for the kind of percentage or payout period that would be attractive to affiliates.

Also, if a firm in the 'marketing' or 'sales training' business were to sell this service directly to their clients and prospects, what kind of 'commission' would this kind of arrangement suggest?

BTW, to answer Jay . . . the service is an ongoing subscription and, I'd guess (not enough experience in the past) that the useful lifetime of a typical subscriber / client would average somewhere in the 3 - 5 year range.

Hope that helps and I look forward to further thoughts. Thanks.

It is difficult to get a specific advice we don't know what service you are offering.

However I fully understand your need to be discreet.

If I were in your shoes I would interview potential solopreneurs and ask them which types of affiliate marketing programs have successfully marketed to them.

Gentlemen --

I sincerely appreciate the effort you've each taken to respond to the question I posed. Unfortunately, the specificity of the questions I've asked and the specificity of the answers so far aren't aligning. No onus or prejudice. But I am seeking specific vs. generalized information.

Telemoxie . . . if this is who I think it is (Dave K) I am dee-lighted to see you back . . . your mind was always impressive to me and I am glad to see this community again has you as a major resource of marketing and sales insights. Welcome back!

I'll leave this question up for awhile longer to see if the questions I've posed can be responded to in specific terms. If not, I'll close it out.

Again, my sincere appreciation to each of you for your efforts and response. Please understand I'm seeking specific input to specific questions.

Thank you.