Building trust and gauging interest levels are two keys to launching a successful affiliate program. Merchants should not expect that top affiliates will flock to sign up and will spend their resources promoting your offer without addressing their basic needs:
- Affiliates need to be confident they will be paid the commissions they rightfully earn.
- Affiliates need to know there is sufficient demand for your offer and that an acceptable level of the prospects they refer to your site will convert to buyers.
Introducing what you have to offer the world of affiliates must be done with poise and tact in order to create a foundation of trust that will attract and maintain a solid team. Once your name and business is established as affiliate-friendly, finding marketers will be easier.
Even before launching your affiliate program and putting yourself ‘out there’ for affiliates to evaluate your website and what you have to offer, it’s critical that you work to maximize your conversion rates and possibly your average order sizes as well. You may not get a second chance to make a positive first impression, therefore your website needs to be ‘selling successfully’ before you embark on affiliate marketing.
An Affiliate Program is not a Panacea for Marketing
Often, new merchants especially, with be drawn to affiliate marketing because of its performance based commission structure and intend on having an affiliate program be their primary source of new customers. For most merchants, this is not a wise strategy. The possible exception is highly targeted niche products that typically have a very short product life cycle — like e-books and other electronically delivered products where merchants regularly share the majority of the revenue with their affiliates.
Merchants often adapt this approach because of the following fallacies:
Fallacy #1: “Since I’m paying only for performance (typically a percentage of referred sales) there’s no real risk or investment to launch an affiliate program.”
Fact: Launching and growing an affiliate program requires the proper exposure, management expertise and time to develop an active affiliate base — each of which require an investment. Furthermore, the typical affiliate program does not show a return on investment until three to six months from launch.
Fallacy #2: “All I need is an affiliate program and my affiliates will do all the marketing for me.”
Fact: For most successful merchants, a well-run affiliate program typically represents just 20 to 30 percent of their overall online sales. Natural search initiatives, paid search (pay-per-click) programs, social networking, general/CPM advertising, email marketing and other channels should be undertaken in order to maximize your reach/sales.
In fact, I always recommend merchants engage in paid search marketing/pay-per-click ads prior to launching an affiliate program. What you learn when you engage in a paid search campaign (and your resulting website analytics) is critical in evaluating your strengths and opportunities.
Once you’re confident that your conversion rates and average order sizes are acceptable, then it’s time to move forward with your affiliate program. Prior to your actual launch, you’ll need to decide on a tracking solution, what your compensation terms for affiliates will be, and the types of promotions you will provide to your affiliates.
Start by Hiring an Experienced Affiliate Program Manager
If you do not have the funds in your budget to hire a full-time in-house Affiliate Program Manager, then consider an outsourced affiliate program management company like LinkProfits. Generally, this is a much more cost-effective way to ensure the maximization of your program. An outsourced program manager can hit the ground running and truly knows what affiliates want and can connect with them on their level. Even more importantly, an experienced program manager already has connections and relationships with top affiliate marketing websites. This is what’s going to get your affiliate links the exposure needed to drive sales!
If you are a merchant interested in pursuing a robust affiliate program, I invite you to contact me to discuss your particular situation and objectives.