When is Affiliate Marketing Effective?

When is Affiliate Marketing EffectiveThere is a simple answer to this question.  There is no such thing as a good deal unless the deal is a good deal for both parties.  Affiliate marketing in its most simple form is about a deal that exists between 2 parties; the seller of a product or service and the affiliate who receives commission, but only based upon certain defined criteria.  The criteria used for affiliate compensation can be a sale, a completed form or any other electronically measurable interaction that the seller deems to have enough value to pay compensation.  So in its most basic form, Affiliate Marketing can only be effective when the sales and compensation arrangement benefits both the seller and the affiliate.

With this understanding behind us, the rest should be relatively easy to grasp.  The seller needs to be providing an attractive, cost competitive product to attract good affiliates; the seller needs to prove this to potential affiliates.  The best ways to do this is no different than in any other commercial situation.  Proof is best offered through independent sources such as positive quotes, statements or reviews and actual numbers. How much has the advertiser paid out to affiliates in the past 30 days?  A video testimonial can also go a long way.  Great content provides potential affiliates addition information and insight; consider video demonstrations, tutorials, podcasts, etc. to set yourself aside from the rest of the advertisers. Here are some additional tips:

  • Use coupons for affiliates to drive more traffic and sales
  • Make sure that you have a great converting site, otherwise affiliate marketing will be a waste of time. My rule of thumb is no less than 2% conversions.
  • Calculate the lifetime value of one customer and include that data in your analytics so you can identify what you CPA (Cost per Acquision) needs to be. Then, push your commissions to attract more quality affiliates. If your customer retention is high, this will work wonders for you.
  • Pick the good affiliates, do not just accept anybody. The bad affiliates will bring your EPC (Earnings per 100 clicks) down and scare of the good affiliates.
  • Stay away from toolbar affiliates!

Of course the commission must be competitive to gain, not only the attention of the best affiliates, but also to gain their mindshare, time and effort.

Incentive Bonuses for strong volume performance i.e. monthly / quarterly increases should also be seriously considered to maximize the attractiveness of your affiliate program.

Lastly, all of the rules of Internet Marketing still apply to Affiliate Marketing.  Your website, its visibility, the richness of the content, the value proposition and much more all need to work to serve as a magnet for the best affiliates for you to be associated with.  On this level, there is no magic … you need to be easily found, provide a clear value proposition and call to action and have all of the supporting content mentioned above.

Contact us to discuss your Affiliate Campaign, we can help.

January 8, 2010

Written by Duran Inci

Duran Inci is a Digital Marketing Executive with over eleven years experience in e-business, including Content Marketing, Paid Search, Ecommerce Systems and Integrations. As Co-Founder and COO of Optimum7, Duran has developed sophisticated processes resulting in leading-edge execution of marketing strategies. Combined with his strong leadership of the Optimum7 team, Duran has successfully generated many millions of dollars in revenue for his clients. His strong analytical skills consistently result in businesses meeting and exceeding online business objectives. Duran has taught a Digital Marketing Bootcamp at Florida International University for the School of Journalism and Mass Communications. He also hosts workshops at South Florida Universities such as FIU (Florida International University), AIU (American Intercontinental University), UM (University of Miami) and various universities in Europe. He's also very active in the development of South Florida IT Cluster and planning. 

Duran has been a featured speaker at various SMX, eMetrics, eMarketing and SES Conferences.

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One Comment

  1. Posted July 19, 2010 at 2:22 pm | Permalink

    Very good content here, sparked some good ideas! Thanks for the numbers, like looking for 2% or better on conversion rates.

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