Businesses survive on making sales of their goods and services. And the development of eCommerce changed the way business are run, making old ways of advertising and marketing nearly obsolete. Besides, the old ways are not only obsolete, but are inherently expensive, thereby calling for innovative ways to run an online business, effectively and with minimum costs.
One such innovations has been the development of a marketing strategy, whereby companies boost their revenue by soliciting the services of a third party, who interface with a potential customer and promote the company’s/business’s products/services, and in return be rewarded by earning a commission from the sales the business/company made through his/her efforts. This mode of marketing is what has come to be known as affiliate marketing.
The beauty of affiliate marketing is that it allows companies/businesses to effectively market a product with a low budget, low effort and time, and at a well-contained risk level while, at the same time, guarantee a high return on investment, increase in brand awareness, and business growth. This is why many companies/businesses invest in either establishing an affiliate program or join an affiliate network for the sole purpose of attracting the services of the affiliate publishers. So, because of the importance of the affiliates/publishers in the success of their businesses, companies/merchants, must set up affiliate programs that focus on the affiliates, who are their work horses!
What are the advantages for starting an affiliate program?
- First and foremost, establishing an affiliate program would greatly enhance any online business. However, owing to the serious competition with other businesses on the WWW, an affiliate program should be designed such that the major players i.e., the affiliates remain loyal.
- The power of the affiliate programs lies in the ability to combine these three elements of business: marketing, advertising and branding, which are irreplaceable for companies.
- Moreover, the affiliate programs enables a merchant, through an array of affiliates, to reach different target markets, thereby immensely increasing its online presence. The merchant running the affiliate program is, in return, rewarded with increased earnings as well as higher brand awareness.
- Running an affiliate program also offers a high return on investment through lowering the operating costs, since the promotion of the products, coupled with reviewing them from time to time is taken up by the affiliates. Since affiliate programs can be scaled up, it further enables the merchant running the program to control the marketing costs. This is due to the fact that the merchant only pays a commission or fee for a resulting action.
- Affiliate marketing programs are in essence a win/win for the stakeholders; while merchants are rewarded with traffic and sales, yet affiliates earn commission from redirecting the traffic to the merchant’s site that convert into sales.
Affiliate Needs Merchants should Consider before Establishing an Affiliate Program
It should be noted that the number of affiliate programs if sky-rocketing thereby giving affiliates room to choose those that is considered to have favorable working conditions. Below are some needs/wants of the affiliates that any merchant thinking of running an affiliate program ought to know:
1) To be treated as a true business partner
Affiliates normally do thorough research before determining which of the available affiliate programs, they should choose from. They need to evaluate how valuable is the program to them. In so doing affiliates will be able to determine which of the affiliate programs will see them as real business partners.
Most often, however, most merchants, envision the affiliate program, simply as a free advertising media, and thus, they do not effectively manage it in such a way that would show that they consider affiliates as business partners. As a result, they will attract poor affiliate partners.
Note that for any business or company to succeed, it should focus on the customers. So any affiliate program should focus primarily on its potential affiliates since they (affiliates ) are considered the primary customers. This is so because they (affiliates) are the ones who interface with the final customer and direct him/her to the merchant’s website to make a purchase.
Therefore, if the merchant considers affiliates as partners, his/her affiliate program shall take care of the interests of the affiliates and it is bound to succeed.
2) A long term relationship
It will be a big mistake for merchants to operate affiliate programs that see their partnerships with affiliates as short-term advertising campaigns. It should be noted that affiliates are looking for and want to build long-term relationships that would benefit both parties.
To achieve this goal, the flow of information is vital. Communication thus plays an important part in building a good relationship. A good affiliate program ensures that affiliates not only receive news about the program but also that their questions are answered quickly as it would be in the case of a real business partner.
New products may be added, thus requiring that information about them be availed to affiliates. It is therefore a good practice that the merchant running an in-house affiliate program offers affiliates regular and timely training on how to sell the products and what the target market is. This will help both parties maximize their respective accrued benefits from this relationship.
Needless to say that since it is in the interest of the merchant to help the affiliates succeed, then the merchant should ensure that all of the information that is deemed helpful to affiliates, to implement successfully the program, should be availed to them before signing up.
3) Good commissions or revenue generating potential
The merchant should determine an attractive commission policy. It should be noted that although affiliates think about the percentage commission, how long they will receive a commission for each referred customer, is very important. In other words, affiliates want to earn a commission for as long as the period the customers whom they sent, remain, and continue to purchase from the merchants’ sites.
The practice has been and in some programs is persisting, whereby, when a customer clicks a link but doesn’t purchase anything at the merchant’s website, and later does come back the affiliate will not get paid!! Another scenario is when the affiliates only get paid for the first purchase the customer makes, and not from any subsequent purchases if that customer converted into a long-term customer to the merchant.
To solve this problem of how long; the cookie lifetime is important. A cookie is a small piece of code that stores specific information in a browser. A cookie will save the affiliate id in the customer’s browser and ensure that the affiliate will get the commission, even if the customer came back days later. Therefore, an affiliate program offering a longer cookie lifetime will be the choice for any affiliate. Depending on the affiliate program, cookie lifetime ranges from as short as 24 hours (Amazon Associates Affiliate program) to as long as 180 days (.
4) Access to the lifetime value of the customer with lifetime commissions
Merchants’ ought to understand that good affiliate programs are those that have great growth potential and with products and services that keep customers coming back. Affiliates are looking for such programs to enable them to constantly offer fresh and new content that attracts returning customers. Therefore, such programs will motivate affiliate partners, for they offer promise for lifetime commissions. Further, merchants should know that affiliate partners are not interested in publishing products that offer a maximum of one sale per customer, but rather in such programs that offer a variety of products or services and fit the target market. Thus, merchants who know the needs of the affiliates will attract the right affiliate partners, for their programs ensure lifetime commissions.
5) Adequate communication with the merchant
You have completed and decided the model of your affiliate program, and now it is important to set up communication channels for the affiliates. It is should not be over emphasized the importance of constant communications with the affiliate partners. This is essential for the success of the program. As a merchant and owner of the program, keep regular contact with the affiliates, through regular communication. Through this channel it will be possible to both give and at the same time get feedbacks from your affiliates. This has the potential of keeping them loyal, as they will feel as being real business partners. The following communication channels may be useful.
- Newsletter communications: These are useful tools to keep affiliates updated about either any changes in the program, or new offers or even marketing tips. Set up an email address and a phone number accounts of your affiliates to make this communication channel efficient. It should not be over emphasized that merchants should have be able to respond to any queries within 24 hours to ensure a high level of service.
- Set up pages that explain the affiliate program: Once the program is up and running, affiliates will need to get more information about it in order to choose either to join it or to look elsewhere. So adding some pages to specifically explain your program will not only serve the needs of the affiliates but will also be useful in search engine optimization. These pages should have content about the program, including a) Program overview , b) Terms , c) Rates, and d) Signup. Ensure that the information on all of these pages is not only informative, but also realistic and as well as educative to the affiliates about the program and products.
- Tutorials: These will greatly enhance understanding of the program and indeed the products thereby enabling affiliates to grow your business and indeed their own. So make tutorial one of the communication tool to help affiliates be successful in affiliate marketing.
6) Adequate training on the product or service
Merchant should understand that affiliate support does not end at the signing of the agreement and placing links on an affiliate’s site. Both affiliates and merchants must live as a community with each one supporting one another. The merchant should continue to educate the affiliates on his/her products, services, and program, and the affiliates ensuring that the program succeeds.
As a merchant, understand that your success with your affiliates is not about increasing your sales only, but also endeavor to see that your affiliates too, grow their sites by teaching them how to market products successfully on the Net, generally, and also how to market your program successfully.
Remember that affiliates are your business partners and are a direct arm of your sales department. So as a new employee would be taken through an orientation on the operations of the company along with other necessities, so does an affiliate need to be treated. As a merchant and owner of the affiliates program, do not expect that your will perform at their highest level without training and guidance. This can take the form of both offline and online guidance—offline with direct one-to-one contact and online with access to resources on your site.
This could in form of affiliate support pages on your site that:
- Direct your affiliates more online resources that would help them improve their site design and content,
- Would enable affiliates to both position and market their sites,
- Would enable affiliates to build a newsletter mailing list, and
- Should help affiliates acquire tips on how to well-position their site in the search engines.
In offering all this a merchant is demonstrating his/her understanding the more successful your affiliates are at generating traffic to their sites, the more impressions your offer will make and the more click-throughs and sales you will receive. In other words, the more successful your affiliates sites are, the more successful your affiliate program will be. So design a program that build teamwork and your affiliates will, in return work hard, and remain loyal, which will further translate into your success.
7) Usability of the Program and Adequate Marketing Support
Another affiliates’ need that requires the attention of merchants is the usability of their affiliate program. Merchants should avoid running complicated programs, as such programs just frustrate the affiliates. Moreover, affiliates/publishers should have access to any kind of codes that may be required by them to implement the affiliate program on their webs site. Besides, reports on impressions, click-through rates, sales, and certainly, the revenue they earned, should be available 24/7. Last but not least, the program should designed in such a way that affiliates are able to quickly retrieve any information they may need. This will keep the affiliates satisfied, and in turn, keep them loyal.
8) An honest and credible program with a credible merchant
As a Merchant and owner of the program, your credibility is very important. Understand that affiliates are looking for not only a program offering the highest commission, but also want to do business with a credible partner. Whether you are running your program through a third party (affiliate network) the onus is on the merchant to ensure that your business is legit. Make sure you provide answers to such questions as: What product/service is being sold and what is the turnover? Getting answers to these questions should help affiliates to know about you and what you are offering. This is turn, should make the affiliate decide either join your program or look elsewhere.
9) Clear and fair affiliate agreement with no hidden restrictions
An affiliate agreement is among the important elements of your affiliate program, and it needs to be carefully crafted in an easy-to-understand language. The agreement should not miss on what affiliates consider as very important issues. These include such issues as : what, how, and when the affiliate is paid; how their performance is to be tracked and reported; issues pertaining to copyright and trademark protection; as well as any marketing and promotion assistance you plan to offer the affiliate.
In addition, the agreement should clearly define and elaborate on what are considered as legal issues and also on monetary issues. The legal team should not forget to avoid legal jargons that are not only understood by potential affiliates, but also are meaningless to them.
Briefly, the following are the elements of a good affiliate agreement and are categorized as: legal and monetary issues, respectively.
The legal issues that aught not to miss in a good affiliate agreement are:
- The enrollment and the acceptance Criteria
- The exclusivity Clauses/affiliate Conduct
- Banners and/or Text-Linking Criteria
- The Vendor Responsibilities
- The Affiliate Responsibilities
- The Trademarks and Copyrighted Criteria
- Customer Data Considerations
- Confidential and Proprietary Information
- The Affiliate website Content
- The Terms of the Agreement
- Boiler Plate Elements such as Indemnification, Independent Investigation, Limitation of Liability, and the Relationship of the Parties Involved
The monetary issues that ought not to miss in a good affiliate agreement are:
- Compensation Rates-Commissions and Referral Fees
- Escalating Commissions (if any)
- Reporting and Tracking
- Payment Schedule
- Residual Income (if any)
If these elements are well explained in your affiliate agreement using easy-to-understand language you will have laid a good foundation for a long-term and mutually beneficial relationship between you and your affiliate partners.
I have summarized a number of issues a merchant should consider when designing and installing an affiliate program. I have also showed you that affiliates are major target of the program and therefore should greatly influence the design and running of the program. I have also showed you the importance of a good affiliate agreement. This will be the cornerstone of your program, so it should be clear and presented in simple and easy-to-understand language.
I believe that if the above factors are implemented and incorporated in your program, you will be able to attract super affiliates, who in turn, will grow your business.
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