How to Manage a Successful Affiliate Program

Publisher and owner of Weblogs Inc., Jason Calcanis, grew ad revenue from $200 per day in September 2004 to as high as $3,000 per day in only six months by using AdSense and a successful affiliate program, according to a recent Google AdSense case study. With good planning and execution, almost any site or blog that has valuable high quality content and uses smart marketing techniques can generate steady revenue online. The 2010 AffStat Report from AffiliateBenchmarks.com is great place to learn more about affiliate marketing, but first, keep these tips in mind…

Treat All of Your Affiliate Relationships Like Gold

The first rule for being successful with affiliates involves maintaining positive relationships. Keep in mind that affiliates are your bread and butter. They take on all of the risks of advertising and only receive compensation after you make a sale. Also, some affiliates earn more money every month than your entire business does, so it’s important to listen to what they have to say.

Also, treat small affiliates with the same respect that you give big affiliates. These small affiliates may grow into big affiliates, or they may have powerful word of mouth references and may even be big affiliates who are just testing the waters with your program. Being greedy in this area does not pay off. You will attract many more affiliates by offering them competitive compensation plans and non-predatory terms. Trust me – you won’t get away with cookies that expire in 90 minutes.

Hire a Competent Affiliate Manager

The manager is responsible for finding new affiliates and taking care of current affiliates. This person acts as the main contact between your brand and all current and potential affiliates. He or she needs to be respectful, helpful and always available to speak. Hire someone who understands your boundaries but is also able to make his or her own decisions. Do not push your manager with a commission-only plan. You do not want the type of manager who sends out hundreds of spam e-mails and gives your brand a bad name.

If you require your manager to travel, keep him or her connected. There are plenty of wireless internet providers to choose from that offer coverage across the nation. Also, whether traveling or not, your manager needs to take your business as seriously as you do, so build a solid relationship with him or her. Share your expectations, and ask the manager to share campaign ideas with you before committing to one.

Get the Technical Details Right

Iron out all the kinks in your affiliate program before it goes live. Make sure tracking works properly, affiliate details are saved correctly, and that your security is top-notch. You do not want to accidentally earn a reputation as dishonest or incompetent. Consider outsourcing your affiliate program to experienced companies.

An affiliate program has to be promoted once it has been set up. Many companies exist to help online businesses get noticed, such as SiteSell.com. Have a look through affiliate program directories to see how many programs are related to your niche.

Do you recall that 2010 AffStat report mentioned earlier? One question asked was, “How do you most often find out about an affiliate program and then join?” The results are as follows:

• 18.3% answered “affiliate directory.”
• 18% said via Google.
• 16.2% was due to an affiliate manager contacting them.
• 11.3% was via conferences.
• 6.4% was through an affiliate manager who was active on a message board.
• 6.2% claimed they joined because of “Network Offerings.”
• 5.7% said personal research.
• Another 5.7% said affiliate manager blogs.
• 4.6% learned about and joined a program through ads in print publications.
• 3.9% said through an affiliate manager on Twitter.
• 1.3% said via affiliate forums.
• Another 1.3% said by word of mouth.
• The remaining 1% responded “Other.”

Transparency is a Must

Unethical affiliate programs have unfortunately made it more difficult for all the honest programs out there. Disreputable things that other programs have done include faulty click tracking, predatory terms and conditions, delayed payments, and sudden changes in terms and conditions. Use an affiliate system that lets affiliates see all their impressions, clicks, conversions and earnings. The more information you give them in the backend, the more they will trust you.

One example of a transparency horror story involves affiliate manager and poker site owner Robert Eon Marshall, who was sentenced to 10 years in prison and a one million dollar fine after scamming 41 people, most of them retirees. His affiliate company used links to funnel a percentage of online casino players’ losses back to him in exchange for referrals. These links made less than 10% of what he estimated, and Marshall needed a way to hold his investors’ interest. Marshall engaged in, and pleaded guilty to, mail fraud and falsifying accounts, showing grossly exaggerated returns to investors.

Communication is Key

Always be open with your affiliates. If a problem comes up, they will appreciate your candor and honesty. Affiliates know if you are withholding information or being less than honest. You don’t have to give them every personal detail of your business, but it does help if you explain why certain changes must be made. Think of your affiliates as customers or clients in this regard. Keep them happy and your sales will benefit immensely. Ask affiliates for their input and then respond to them directly. This works well both before you launch the program and after it goes live.