Should I Promote this Merchant? A Critical Checklist for Choosing an Affiliate Program

The following article was published in the premier issue of Revenue, The Internet Affiliate Marketing Standard.

There are thousands upon thousands of affiliate programs offered by various Internet merchants. Deciding what programs to promote can be a daunting task. Let’s explore the factors most successful affiliate marketers consider when faced with this decision…

First and foremost, you must consider your site visitors’ propensity to purchase the product or service or take the ‘desired action’ (filling out a lead form, etc.). The greatest factor here is the attractiveness of the merchant’s site and offer, but you also need to consider your ability to properly pre-sell the product or service and your interest in doing so. After all, if you don’t refer a qualified buyer and if the merchant’s site does not convert your referrals, you will not be successful with this offer.

Once you’re satisfied both you and your customers will be interested in what a merchant has to offer, then consider these additional factors…

1. The Agreement. Read the Terms and Conditions of the program and be sure you understand and agree with all the points. If there is no such document, move on.

2. Compensation Terms. How much a merchant is willing to pay you is surely important, but you must also consider the expected conversion rate. Look at the program’s Earnings per Click or EPC*. A program that pays you $5 per lead may be far more attractive than one offering an average commission of $25 per sale. Using this example, if 10 out of 100 of your referrals submit a lead form, you’ll earn $50, with an effective EPC of $.50. If just one in 100 of your referrals makes a purchase, you’ll earn $25 with an effective EPC of $.25. You’ll also need to consider the volume of clickthroughs, which is not part of the EPC measurement. In other words, if very few of your site visitors click on the lead campaign and many more click on the per sale campaign, you could end up earning more total commission on the per sale campaign, even though it does not convert as well.

The EPC is public knowledge for many programs. If it’s not disclosed, I urge you to write to the Program Manager and ask about their average EPC. I suggest participating in programs with a minimum EPC of $.10 (unless you expect very high volume).

*EPC or Earnings per Click, for purposes of this article, is defined as the average amount of earnings/commissions paid per single clickthrough to the merchant’s site. Some networks like Commission Junction and Shareasale use the EPC metric defined as Earnings per 100 clicks. So instead of a minimum EPC of $.10, look for a minimum EPC of $10.00 or more on these and other networks that use this definition.

3. Return Days and Lifetime Commissions. ‘Return days’ refers to the length of time a cookie is set on your referral’s computer to allow you to earn commissions even if the referral returns directly to the merchant’s site. The importance of return days will depend on the length of time a customer typically takes to decide to purchase a particular product. As a general rule, I suggest you consider programs with a minimum of 30 return days.

Many merchants expect customers to make repeat purchases; it’s even ‘built-in’ to many situations, like ongoing services. As an affiliate, you should be compensated for future purchases, so look for these types of programs to offer lifetime commissions. (Especially those that are tracked by a database, where your referred customer is ‘assigned’ to you and your ongoing commissions are not dependent on cookie tracking.)

4. Leakage. I define leakage as anytime an affiliate does not get credit for commissions he/she is rightfully entitled (based on the programs terms and conditions). Below are a couple examples of leakage. Again, don’t hesitate to ask the Program Manager how they minimize these issues for their affiliate partners.

Phone Orders – There are ways to credit affiliates with their phone orders – write to me and I’ll be happy to explain them to you.

Participation of Parasite Affiliates – This critical issue is beyond the scope of this article, but clearly you want to avoid programs that have relationships with affiliates who will intercept your referrals and claim the commissions for themselves. There are many sites and discussion groups where you can find lists of affiliate programs that have parasites participating in their programs.

Even if you’ve earned commissions, there are unscrupulous merchants who may not pay as they have promised or are very slow payers. Again, check the affiliate discussion boards before you start promoting any merchant to see if other affiliates have registered complaints about them.

5. Program Management. If you’ve gotten this far in your evaluation of an affiliate program opportunity, then I suggest you also look for information about the program’s management. Have you been provided with full contact information for an individual you can reach with your questions or comments? If so, chances are, you’re going to get the support and guidance you’ll need to promote this merchant. On the other hand, if you’re given a generic email address (affiliates@companyxyz.com) that you find is unresponsive to your inquires, this should be a red flag. I also suggest you avoid programs that use ‘customer service’ to handle affiliate matters.

A productive affiliate should be viewed as a true business partner, just as an in-house salesperson. Therefore, look at the quality of the sales promotion support. For example, does the program go ‘beyond the banner’ and provide affiliates with good content in the form of articles you can publish and/or emails you can send to your subscribers? Do you have access to individual product links or a product datafeed? Have they provided you with a list of their most important key words and key word phrases? Does the Program Manager keep affiliate partners informed of the hottest selling products and most successful promotions? Are you provided with coupon/promotion codes or other special deals you can offer your customers?

6. Reporting. Most well-run programs will allow you to log in to your account 24/7 in order for you to view your performance in real time.

While there are no guarantees, following these guidelines should help you to partner with those merchants who offer you the greatest chance of success. Above all, remember to work smart, run your affiliate activities professionally, and be aware of red flags. Good luck!

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