Outsource Affiliate Program Management:
Greater Expertise = Greater Effectiveness

by Jim Gribble,
Founder, LinkProfits.com

Is there a need for outside help in establishing and managing successful affiliate programs for online retailers?

Has this relatively new industry produced any “experts” who are able to apply their experience in meaningful and measurable ways on behalf of companies seeking to fully exploit this channel?

According to Shawn Collins, recognized industry leader, author of "Successful Affiliate Marketing for Merchants":

“As we all know, a skilled and experienced affiliate manager is nearly as rare as a Honus Wagner T-206 baseball card. (There are an estimated 58 of these cards in circulation). This shortage of talent and the rapid growth of the affiliate marketing industry have resulted in the need for merchants to outsource the duties of an affiliate manager.”

Last year, Affiliate Metrix performed comprehensive research on the Affiliate Marketing Industry. Their research resulted in the identification of just five Projections. One of these was:

"Outsourcing in the Future: Only 16% of affiliate programs were outsourced in 2000. This number will increase two-fold by the end of 2002 as companies determine they are unable to locate and afford the specialized skills needed to properly manage an affiliate program."

As the Managing Director of LinkProfits, an OPM (Outsource Program Management) solution, I firmly believe the answer to both of the above questions is an emphatic “YES”, and here’s why…

Although affiliate or partnership marketing is easy to conceptualize, unlike nearly all other marketing channels (direct mail, TV, space/media buys, etc.) there is no tangible ‘volume control knob’ for the affiliate marketing manger to simply ‘turn’. Sales expansion rests on the manager’s ability to identify, form and cultivate mutually beneficial partnerships – no easy task. This inherent ‘fact of life’ has kept most affiliate programs from becoming a meaningful source of business for the typical e-merchant. Faced with this daily challenge, the affiliate channel often reaches a level for which it cannot rise above, or it eventually becomes neglected and doomed to fail.

So why are some programs successful?

Some brands sell themselves and their demand ensures a certain level of success (everybody wants to partner with them). Others, who are not so lucky, owe their success to dedicated resources and superior expertise.

It takes constant and innovative management to master the critical tasks involved in running a successful affiliate program. These include:

Identifying, approaching and successfully recruiting potentially productive affiliate partners. At LinkProfits, we identify and approach a minimum of 100 potential affiliates (based on their site content and traffic) each and every month for our merchant clients. (This work alone typically involves a minimum of 20 man-hours per month.)

Developing mutually beneficial relationships with affiliate partners through ongoing, personal communications in order to maximize production from participating affiliates and the total number of participating affiliates (always a challenge). A well-known, experienced Program Manger has a tremendous advantage here, having many relationships already in-place. LinkProfits has been working with hundreds of top affiliate sites since 1999.

Developing a full arsenal of effective sales promotion support and making it easy for the affiliate partner to implement these campaigns successfully. This often involves taking promotions that are working well for the merchant in other marketing channels and specially adapting these promotions for use by affiliate partners. It takes an individual who is not only familiar with affiliate marketing, but is also an experienced direct marketer to conceptualize and implement successful affiliate promotions. I personally, have over 20 years direct marketing experience, having run profit centers as large as $85 million in annual sales for a number of firms.

If a company is willing to invest in the resources and expertise needed in order to manage their program in-house, then this may be a prudent decision. This will probably involve hiring an experienced program manager at a salary of $50,000 or more, plus another entry-level type individual who can be trained to search out new affiliate partners. As with all staffing decisions, the challenge of dealing with employee turnover and the additional expense of hiring, training and employee benefits need to be considered. As predicted by Affiliate Metrix, an increasing number of merchants are finding the outsource solution more attractive.

Please feel free to request a proposal and I will attempt to further demonstrate this fact for you...