Things You Should Know To Succeed as a Merchant in Affiliate Marketing

Wade Sisson
April 2, 2013 — 1,279 views  
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Start with the Question: Is My Business Ready for Affiliate Marketing?
Without a thorough examination of the factors that will lead you to this answer, there's no point in moving forward with your plans regarding affiliate marketing. Jumping into affiliate marketing without preparation - and without being ready - is potentially more disastrous than missing the opportunities you miss by not having a program in place.

Are you ready? This question begs an answer. Start by taking a look at your competitors. Do they have affiliate programs? If so, what kind of commissions are they paying affiliates? Can you offer a commission rate that is at least in the same ballpark without losing your shirt? If you can't, your business is not ready for this.

Affiliates love a brand name. They prefer to promote companies that are recognizable in the marketplace so that they don't have to do the heavy lifting of introducing your business to consumers. Is your brand a known entity or a work in progress? If you don't have the name recognition, you need to give serious consideration to whether or not your affiliate program can compete.

Do you offer products/services in high quantity? Nothing kills an affiliate's enthusiasm for your program faster than hearing that you are shutting the program off mid-month because you cannot fulfill the many orders that affiliate traffic is sending your way. Ideally a realtor's affiliate program has a wide variety of products available in mass quantities. Think of it this way - you wouldn't open a restaurant if you can only make 10 pizzas a night. You must be able to meet the demand.

Affiliate Marketing is a Great Channel but It's Also an Investment

All digital channels are increasingly important to retailers, and none more so than affiliate or performance marketing, which continues to see tremendous year-over-year growth to the benefit of all merchants who engage in it.

There's no question about the value of the channel. However, it's very important for those who are about to enter the arena for the first time to know that affiliate marketing is a considerable investment of capital, energy, resources and time.

If your business is just entering the affiliate marketing space you'll likely need to make changes and improvements to your website, shopping carts to enhance user experience and encourage activity that converts (leads or sales).

You'll also need to devote time and energy to providing the creative (banners and text ads) and developing the terms and conditions (including paid search bid policies, cookie durations and availability of such things as data feeds) and documenting the best practices (top-selling products, seasonality of offers, etc.) that will ensure affiliates have everything they need to promote your campaigns.

Typically you'll be running your affiliate program on at least one affiliate network, which means you'll need to make sure you have the budget for network fees that will be assessed (usually on a monthly basis) and that often require a monthly deposit toward affiliate commissions.

Do You Have What It Takes?
You don't have to manage the affiliate program in-house. In fact, you can outsource much of the work so that your business can focus on what it does best. However, to have a successful affiliate program you do need to have certain resources in place.

We've already talked about the financial requirements of starting and maintaining an affiliate program. You'll also need personnel in place. Even if you're outsourcing affiliate program management to an agency, you'll need someone on your team who is working with the agency to provide creative and technical support (new banners; installation of tracking pixel codes, etc.) and who can approve plans and evaluate recommendations as they come in.

One of the most common reasons an affiliate program fails to reach maximum potential is because of neglect. If you cannot devote the personnel and attention to the program, your program will suffer the consequences.

Who Will Manage My Affiliate Program?
In an annual survey of affiliate preferences and practices known as the Affiliate Summit AffStat Report, the vast majority of affiliates said that the affiliate program manager is a key factor in their decision of whether or not to promote your business through the affiliate channel.

There's a good reason for that. The affiliate manager provides affiliates with important support including up-to-date creative, information about top sellers and seasonal offers, details about important upcoming promotions, tips for promoting the brand and help when questions arise.

In other words, the person or persons who manage your affiliate program can make or break the program. If you decide to hire an in-house affiliate manager, it's important to make sure that person has experience in the role. Affiliate management isn't something your former director of client services can learn quickly. Affiliate marketing has a lot of moving parts, and seasoned affiliate managers have honed their skills through many years of hands-on experience.

Outsourcing the management of your affiliate program to an agency enables you to entrust your affiliate program to a seasoned affiliate manager, gaining from their years of experience. Industry research has found that outsourcing your affiliate program is the more cost-effective of the two choices.

Any outsourced affiliate program management agency of substance will help you determine in those early conversations if your business is ready for an affiliate program.

Wade Sisson

Schaaf-PartnerCentric

Schaaf-PartnerCentric Named OPM/Agency of the Year at Affiliate Summit Pinnacle Awards 2013