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Is Email Marketing Hurting Your Business?

  |  September 20, 2002   |  Comments

Warning: Super affiliate emails may be hazardous to your company's health.

Think spam is killing your private email every day?

Well, think of the harm it might be doing to your affiliate offer. You know, that email super affiliates are sending out to promote your product. You thought it was just email marketing, paid on performance. Then one morning you wake up to multiple spam complaints, pissed off customers who return products or have been incentivized poorly, and waning interest from your new customer list. Your boss is screaming because people are calling you spammers.

Some super affiliates will send out any offer that seems promising and keep sending out things that sell regularly. That makes sense. Next time you complain about human growth hormone (HGH), cable descramblers, or even porn, remember that repetition likely means someone is buying this stuff. If you see it very frequently, someone is making money. Then it becomes an avalanche.

How do you know the good super affiliates from the bad? Experience.

If you let them, super affiliates will often just sign up and send your offer to as many people as they can. The rule of email volume is simple: The more email I send, the more money I make. Mass emailers pay $0.10 to $0.20 CPM for delivery and easily make $0.30 CPM on a bad day. Mix this with an incestuous spam marketplace where names are bought and sold like bubblegum cards, and you get the problem.

Aggressive, ballistic email marketing is the rule for the customer, at least right now. People's inboxes are filled by affiliates large and small that simply get the deal's link, chuck it in an email, and send it out. If you have a successful affiliate program, it's likely you will, sooner or later, encounter the following scenario:

You open a program, knowing email is potent for sales, and look around for email affiliates. Most likely, they will find you. Everyone is out hunting new deals, because the first one to a good deal makes most of the money.

Super affiliates, in this definition, refer to the email powerhouses that simply blanket the Internet with tons of email to generate sales. You can often find them in Florida and elsewhere, but mostly Florida, and their company names often contain the word "opt-in." These folks are aggressive and smart and have direct response email factories that literally roll out sales. Talk to them on the phone, and you're convinced. They drop buzzwords such as "segmentation," share subtle anecdotal-hogwash guarantees about their open rates, and tell you to just let them run it. What's it going to hurt?

They hit about 1 million addresses on a test, and, if it works, they'll send the message as often as they can. A good message will pop up in your email box three to four times a week. If it works, you can easily get super affiliates to send 15 million emails a week.

Meanwhile, the company's competition is on their list, checking out what the affiliate is doing. Even if your offer doesn't work, others will start jumping on the bandwagon. You can try to stop it, but the rock is rolling downhill.

That's smart direct marketing, don't get me wrong. But more sales don't inherently translate into more value for your affiliate program. You can get overexposed very quickly and find your deal burnt out within a few months.

Good direct marketing balances volume with quality. It's easy to say, hard to apply, but ultimately where the affiliate market is heading.

If your program is like most affiliate programs, initially you'll have a very positive feeling about email. Sales will come in, and everything looks good. But then the spam complaints start to arrive, and you get blacklisted by someone sick of seeing your message everywhere. Although it may not be your intent, to the customer it is spam, plain and simple. A super affiliate has sent out millions of your emails. Your offer has become categorized as spam -- annoying stuff to be deleted quickly.

As the noise of spam rises, your sales often do not -- for a variety of reasons. People get sick of seeing your offer after having it shoved down their throats so often. Any direct marketer would tell you this approach wears out a list, but you're not alone. Everyone else is wearing out the list with the email onslaught of 2002. And it's not just about the super affiliates, but about this entire email industry that feeds off anything that works. In tough markets, businesses will do amazing things to survive.

For example, in 2001 and 2002 credit cards were hot affiliate items. They generated tons of customers for NextCard (which has since disappeared), Providian, and Capital One. Both of the remaining companies have shuttered their affiliate programs because of poor customer quality.

About the only credit card programs you see now are subprime credit, but the volume is nowhere near where it was. Email killed some of the best affiliate programs, driving poor customers who, in this case, had subprime credit ratings. When the economy tanked, so did the affiliate programs.

What are you supposed to do?

  • Tell the super affiliates to email less and make less money? Yeah, right.

  • Accept the problems and enjoy the short-term influx of revenue? If you allow this kind of email, it's likely you will be labeled a spammer no matter what. It's also likely you'll make money quickly, but that won't last for long. Initial success is almost automatic if certain super affiliates market your product. It's a small business and everyone knows the spammers... even if you don't.

  • Manage them? You'd have better luck herding cats. Direct marketers are virtually impossible to corral; it's all about revenue.

  • Put a cap on affiliates? That makes the deal less appealing to anyone who can do volume (even with quality). By protecting against the bad affiliates, you may inhibit the good ones from acting.

  • Evaluate each campaign and watch your super affiliates? Definitely, but email is like a rock rolling downhill. Once you push it, it's almost impossible to pull back. You make lots of initial sales, but rarely do the numbers hold.

Why would anyone complain about too many sales? It's not that simple. Any monkey can spam out a message and make money. But true direct marketing weeds out the garbage, and in the next six months you will see tons of weeding, much of it spurred by legal issues. That's an easy prediction, but, for now, beware. The storm is coming....

Your super affiliate email may be hazardous to your company's health.

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ABOUT THE AUTHOR

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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