Running an Online Affiliate Program

Not all affiliate marketing programs are successful. In today’s world we need a robust, well thought out strategy to ensure that the affiliate marketing program is both successful as well as scalable. Affiliate marketing is no longer on the fringe. Instead it is a core sales channel which has tangible and visible effects on any company’s bottom line. Hence, the attention due to affiliate marketing programs must be provided to it.

In this article, we will understand how successful companies like Amazon administer their affiliate marketing programs. An understanding of the best practices is important for both novice affiliates as well as novice merchants.

Recruitment of New Affiliates

An affiliate program begins with the recruitment of new affiliates. A new company would have less bargaining power. Hence, it would have to persuade the affiliates to work for it. On the other hand, an older and more established company would have options. They can choose affiliates from amongst the several applications that they receive.

• Affiliate’s Point of View: Affiliates get paid when a sale is made. In effect, they are salesmen who get paid via commission only. Hence, affiliates must be very careful while choosing who they will represent. If they choose the wrong merchant, they will put in a lot of efforts and yet not get paid. Their efforts are only part of the equation, the other parts must also be conducive for the affiliates.

  As a result, affiliates tend to pay a lot of attention to the industry the merchant is in. Niche markets are usually left out affiliates want to concentrate on the masses. Affiliates also look at the merchant’s position within the industry to understand the probability that they can make a sale. The website experience is also very important to the affiliate’s business. Hence they thoroughly explore the look, feel, design and usability of a website before they agree to go onboard.

• Merchant’s Point of View: Once the merchant is in a commanding position, they can choose their own affiliates. The choices they face are between either employing individual affiliates or engaging a network. Both of these options have their pros and cons. Regardless of the choice that the merchant makes they must ensure that they have an online presence on message boards and communities. Also, merchants must take part in the affiliate marketing conferences held worldwide.

Clarity of Long Term Objectives

An affiliate marketing program is not a one-time affair. Instead, it is a never ending strategy. Hence, the same merchant will have different objectives at different points in time, It is important for the merchant to clearly communicate these objectives to the affiliates. Some of these objectives can be:

• Outsourcing all your activities to affiliates

• Cross selling, up selling as well as increasing the sales value

• Maintaining a favorable brand image while making an attempt to sell

Each of these objectives will lead the affiliate marketing into a different direction. Hence, they must be explained to the affiliates as soon as possible.

Overall Fitment

Affiliate marketing is not independent of a marketing campaign. Instead, it is the part of a marketing campaign. The job of affiliates is to convert random internet traffic into a targeted stream of customers for you. Hence, for them to perform their task, there has to be some amount of internet traffic. The affiliates are reliant on the merchant to indulge in advertising or such other activities that generate online traffic. Merchants must therefore co-ordinate with their affiliates and provide them information about when media activities are planned. This will help affiliates to streamline their own effort and ensure that the entire marketing machinery functions as one cohesive unit. This is because this cohesion greatly increases the effectiveness of the entire campaign.

Commission Structure

This is the most important aspect of any affiliate level program. After all the affiliates are in it for the money. Hence, the way commissions are structured can have a huge impact on the behavior of the affiliates. The key here is to think long term. The commission structure must be such that it appeals only to genuine long term affiliates. Merely adding more and more affiliates to show numbers is counter-productive. It causes tremendous losses in the long run. Also, the commissions must engage the affiliates to actively participate but they should not encourage excessive activity. Hence a top limit has to be set on the amount that will be paid out. Also, the commission structure must have separate parameters for quality as well as quantity.

Affiliate Support

Affiliate recruitment is just the beginning. What truly ensures long term success is the affiliate support program! Affiliates must be paid on time. Also, there must be clear and transparent mechanisms to review their performance. An online sales validation program is one such endeavor and it helps remove the ambiguity regarding the number of sales made by the affiliate. The feedback provided must be constructive. Also, they must be provided certain creative help that will enable them to create engaging content.

To sum it up, a lot of different factors need to be modified to make the affiliate program a success. Simply adding a link to your website that says “Affiliates please click here” will not do the trick. The change is fundamental and strategic in nature.

Authorship/Referencing - About the Author(s)

The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.