Monday, November 4, 2013

Planning Your Affiliate Program

This is chapter 4, Planning Your Affiliate Program, of Successful Affiliate Marketing for Merchants.As the old adage goes, businesses don't plan to fail, they fail to plan.I've got a number of items you should take into consideration when putting your affiliate program together.One thing is that you have to identify who you are selling to; who are the affiliates you are trying to reach? Make it a point to know what they want and need. If you don't know, just ask them. And if at all possible, give it to them.How are you going to track the affiliate program? Are you going to build it yourself, buy software off the shelf, or go with an affiliate network?How much are you going to pay your affiliates? Take a look at your margins and what your competitors are doing to ascertain what would be the appropriate commission rate.Determine the terms for your affiliate program. Will you permit pay per click search engine bidding on trademark names? Will you be providing solo e-mail creative?A key to your affiliate program with be the setup. As Declan Dunn, one of the forefathers of affiliate marketing, once said, "Affiliate marketing is about partnerships, not technology."That is important to remember, because some folks have this perception that affiliate marketing is a channel where you can just throw money down and watch it perform on auto-pilot.It's about people. While technology and creative are important components to an affiliate program, the central focus should be on the people and the relationships.Some major points when setting up your affiliate program:
Think like your customer. I would urge every affiliate manager to become an affiliate themselves (if they are not already), so they can walk in the shoes of affiliates and get a 360 degree understanding of the business. This will enable affiliate managers to look at their affiliate program from a different view and identify areas that need improvement.
Staffing of the affiliate program is of paramount importance. You've got to determine if your affiliate program will be managed in-house, outsourced to an agency, or turned over to an affiliate network.
The affiliate program model you go by will be significant. Will you focus on pay per click, pay per sale, pay per lead, or some sort of hybrid?
If you're going with an affiliate network, which one and why? There are a number of choices out there, so check out the landscape and take a number of them for a test drive.
You'll need a marketing plan to reach potential affiliates and sell them your affiliate program.
Activate and educate. Recruiting affiliates isn't the end of it. You should have a program in place to activate and educate the affiliates after they are in the door.

If you decide you want to outsource the management of your affiliate program, you'll find that management services typically range anywhere from $1,500 to $10,000+ per month. Levels of service and experience will vary wildly, so be sure to get references and call them.In order to create the optimum affiliate program, you need to know what affiliates want. Here is a list of minimum requirements:
Provide a true partnership. If the deal is skewed in your favor, don't expect affiliates to knock down your door. They're already promoting you on a leap of faith, so make things as reciprocal as possible.
Run a credible affiliate program. Affiliates want to work with affiliate programs that pay them on time and provide reliable tracking. It's simple, do right by your affiliates or they're going to walk.
Have offers that sell. I've seen all too often that companies roll out their affiliate program in tandem with the launch of their site. Bugs, poorly planned landing pages, tracking issues converge to undermine the work of the affiliates.
Offer a fair affiliate program. This goes back to the true partnership and beyond. Fair terms are essential.
don't complicate things. This won't generally be an issue if you go with one of the major affiliate networks. But some homegrown affiliate systems are a convoluted mess.

Next up, I'll cover why some affiliate programs fail. The reality here is that affiliate programs don't fail, affiliate managers fail, and it happens for a number of reasons.
Failure to activate the affiliates. Don't settle for the 80/20 rule. That's the rule of the lazy affiliate manager that doesn't have an activation plan.
No education for the affiliates. Provide your affiliates with the tools they need to succeed. Let them know your target demographic and best sellers. Create a sales guide that gives a road map to promoting your company. Give them some degree of training, no matter how informal it may be.
Lack of support. Some make themselves available 7 days a week. I'm not saying you have to do that, but be there for business hours in a number of ways: phone, e-mail, IM, Skype, or whatever. Be there for affiliates when they need you, or risk missing out on big promotional opportunities.
Ignoring the competition. You've got to know your competition, know who they are, what they're doing, how they're doing it, and who they're doing it with. Take a look at all aspects of their affiliate programs. Know them inside out. the better you know your competition, the better you can create a best of breed affiliate program.

There are a lot of items there for planning an affiliate program - do your best to follow all of them.