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Reports of Affiliate Programs' Death Are Greatly Exaggerated

  |  August 23, 2002   |  Comments

Sure, some of the outdated notions of what an affiliate program should be are disappearing. But that's good news.

Affiliate programs are dead! Long live affiliate programs!

Everyone seems to be jumping on the "affiliate programs don't work" bandwagon. Small affiliates that haven't been successful with an affiliate program claim their own lack of sales means the program doesn't work. Publishers who want to sell CPM continually dismiss affiliate programs, because generating sales from ad space isn't an easy thing to do.

"Affiliate" has become a dirty word, even to the affiliate networks built on the basic principles of cost-per-action programs. Visit Commission Junction, Be Free, and LinkShare and you rarely, if ever, run into the word "affiliate."

Actually, they all are right. And they all are wrong. Affiliate programs don't always work and don't always make money for everyone who tries to promote them. Let's get this straight right now: Most often, affiliate programs don't work. Last time I checked, most marketing efforts don't work. Optimists cite the 80/20 rule of marketing, which says that only 20 percent of your efforts really work.

Smart affiliate programs are applying this rule to their own efforts, focusing on finding the 20 percent of effective resellers through research and partnership development. Instead of trolling for random affiliates to sign up for their programs, smart marketers are looking for key partnerships that deliver ongoing revenue. To keep that revenue flowing, you need to find partners that will continually perform, do repetitive marketing, and conduct reseller channel development.

Affiliate programs are not dead; they are simply growing up to be business development and partnership channels that pay for performance from partners who qualify. Many think Internet marketing is vastly different than traditional marketing, but it is quickly becoming clear traditional principles of direct marketing apply to Internet affiliate programs as well:

  • On first contact, you will be lucky if 2 percent of the people buy what you are offering.

  • Following up with prospects repeatedly via email works. Most people buy on fourth or fifth contact, not on the first impression. Integrating these communications with the needs of your affiliates is critical to success.

  • You have to look for the right partners and manage smaller affiliate networks. It is not enough to post your program on every affiliate channel and wait for the masses to sign up. Those days are over, because it is ineffective and random.

  • Smart, effective partners are always hard to find. This is the central focus of today's successful affiliate programs. Now the affiliate network has to take responsibility for finding and maintaining good partners, instead of expecting the partners to find them.

Sometimes the best things in business are really simple. Like affiliate programs.

In the beginning, it was all about how many thousands of affiliates you could claim. It seemed to be so easy. You have thousands of Web sites linking to you, and you pay only when someone performs a specific action, such as purchasing or registering. All you have to do is give affiliates some ads and tell them which product to sell.

But the problem with this model is readily apparent. Most affiliate programs think the whole marketing world should revolve around their offers, but affiliates are like retailers. They are loyal to what makes them money, and they work with a variety of vendors.

Many affiliate programs act like there are no other choices, as if the affiliate should be tremendously interested in their offers over all others. This kind of self-centered approach creates a myopic, deadly form of unprofitable marketing.

It is like anything in life: If you're too interested in yourself, you are pretty boring to hang out with. Your biggest opportunity in affiliate marketing will be when you start forgetting about your self and start thinking about your partners. Then the real success will begin.

Some of the most successful Internet companies are built on this simple foundation, together with an affiliate model.

For example, ClubMom's affiliate program, run by Shawn Collins, builds partnerships with specific sites. Through a variety of marketing tools adapted to the needs of the company's partners, it is able to extend its reach to a specific, targeted market. ClubMom execs research partnerships while letting folks sign up at their site. By taking responsibility for finding, contacting, and nurturing these partnerships, the company's marketers are able to roll out an effective affiliate program based on qualified affiliates.

Here's what you can do for your affiliate program:

  • List your top 30 dream partners. Then find the best way to package your product in their names. Make it easy for them to work with you and put their names on your offer if possible, like private labeling.

  • Give them the right margins, with scaled commissions based on performance. Encourage your partners to achieve sales goals and be rewarded, like good salespeople are. If they sell 500 units, pay them xx percent. If they sell 1,000, pay them more, if you can afford it.

  • Listen to your affiliate partners. Your best ideas will come from your partners if you communicate with them. Pick up the phone or email them; it's that simple.

Private labeling? Syndicating? Reselling? There are different ways of looking at this changing affiliate business space.

But the true bottom line to your business and you is this: When you start putting your partners and customers first, then you will truly become successful. Affiliate programs are evolving into ongoing joint ventures. They're not dead, they're just growing up.

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Declan Dunn Declan Dunn is CEO of ADNet International, a direct marketing services provider that focuses on select projects and its own super affiliate network, including the Net Profits business training systems delivered at ActiveMarketplace.

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