Affiliate Marketing. Is it one of the strongest, most ROI-driven channels in your online marketing mix, or is it an untamed, out-of-control, hodgepodge of confusion? If you aren’t aware of the following 7 sins, it’s likely the later for you.
Sin 1: The Wrong Network or Software
Most affiliate programs need to be operated on an established, name brand affiliate network. Many merchants fall into the trap of simply enabling the “affiliate tracking software” which comes pre-installed with many web hosting packages. This may seem like a cost effective route, but it’s more often than not a recipe for disaster. Unless your company is a household brand name, hosting your own affiliate software is likely a poor choice for you. Check your ego when you ask yourself this question…Are you really that big in the consumer mindscape?
No? Time to choose an affiliate network (or networks) to partner with. The strategy for every merchant is different; some will benefit from a multi-network approach while others will not. When you work with a network, the first thing you must evaluate is the crowding versus opportunity of your vertical within that network. You run a dating site, and your first choice network has 53 dating programs already running? Maybe you should consider a different network.
Working with an established network brings a host of advantages to your affiliate program: an established brand name, affiliate trust in your brand, regular and predictable commission payment cycles, fraud controls, verified tracking systems, and so on.
Again, the strategy for each merchant is different. The above are some of the basic questions you must ask yourself before taking that all-important first step.
Sin 2: Auto-Approval
Okay, you have your affiliate program up and running. Now, check that box to auto-approve all affiliate applications…STOP! Why would you even consider such a thing? Yes, manually reviewing and processing affiliate applications takes time out of your already-busy schedule every day. Not doing so is potentially putting you on the fast-track to cyber-death.
The CEO of a well known sporting goods retailer (who shall remain anonymous) once got an email from a close friend. This friend had sent him a link to a pro-Aryan race site where his ads were prominently displayed (the Aryan race…closely associated with Hitler and the Nazi agenda). The content of the email boiled down to “I bet you didn’t know you were on this site”. The friend was right. The CEO came down hard on his marketing team, demanding more control be taken, and more attention be paid to the types of sites his brand was represented on. Did the marketing team seek out this placement on purpose? No. They were an unfortunate victim of allowing auto-approval in their affiliate program. True story.
Don’t make this mistake. Your brand is priceless. Control it. Protect it. Be selective with it.
Sin 3: The Wrong Strategy
Your affiliate program is live, you’re manually approving affiliates…now what? Implement your strategy! Affiliate marketing is just like any other channel of online marketing in that you must approach it with a clear set of goals, and a roadmap for reaching those goals. You will not get what you want out of your affiliate program if you do not first decide how you are going to get there.
Are you too focused on one type of affiliate? Do you have any diversity in the types of partners who are driving sales for you? Do 90% of your sales come from the same five affiliates (hint: the answer here should be no)? Are you adopting a loss-leader mentality [exclusively]? What about those affiliate Terms and Conditions….Are they too restrictive? Too loose? Have you even written them?
These are all important questions with no single or simple answer. The answers depend on your site, your margins, your competition, and your goals. Failing to ask and answer those questions will result in nearly-guaranteed failure.
Sin 4: The Wrong Management
Who is managing your affiliate program? The head of your marketing department who has multiple other responsibilities? An introvert, uncomfortable picking up the phone or striking up conversation with new faces while attending a conference? Maybe just a rookie to the industry? None of those types are necessarily the wrong choice. However, you can vastly increase your odds of success by hiring a proven veteran who comes with their own years-thick rolodex of successful relationships. Affiliate program management is massive set of constantly moving pieces and shifting priorities. Whoever you have steering the ship, ensure they know what they are doing before they start.
Sin 5: Nexus Law Reactions
The Nexus laws being passed in a growing number of states present real concerns for merchants who operate affiliate programs. Ignoring them is a bad idea. Not taking the time to fully understand them is an equally bad idea. Taking a knee-jerk reaction which negatively affects your affiliates and affiliate program in response to a Nexus law is the worst possible idea.
Nexus laws demand your time, attention, and respect. They also demand strategy for your affiliate program. Don’t burn a bridge by taking a blanket approach. Read the laws and understand both their written word, and their intent. It is 100% possible and realistic to successfully, safely, and confidently work with affiliates from Nexus states, while remaining in full compliance with the varying laws.
Sin 6: Ignorance is Bliss
Remember the unfortunate ad placement example for the sporting goods retailer? This alone should be proof that ignorance is NOT bliss. Let’s take a less extreme case though, just to get past that “It won’t happen to me” trap.
Have you ever had an affiliate suddenly appear out of nowhere to dominate your program with their staggering sales volume? Do you know where those sales are coming from? Sure, this is often 100% legitimate and the result of the hard work of the affiliate combined with your successful and strategic program management. But what about those…other….times.
If you cannot easily and accurately identify where your sales are originating from within your affiliate program, you have a problem. What if your PPC policy has been violated (intentionally or unintentionally, it doesn’t matter)? What if your lead gen form was used within a forced registration for a new online gaming site? What if those orders simply came from Canadian traffic and you can’t ship there? If you don’t know where the sales came from, how can you determine if they are valid sales or not? Do you want to pay commission on sales that you couldn’t fulfill? I didn’t think so. Honestly, most affiliates out there don’t want you to either. Affiliates are your partners, should be treated as such, and want to be treated as such. Working together to drive the right kinds of sales for your business is the route to a successful, long-term, affiliate program.
Sin 7: That Line from “Field of Dreams”
Everyone knows it, but here it is: “If you build it, they will come”. In the movie, they’re talking about the former greats of baseball getting together for a pick-up game in a corn field. In affiliate marketing, we’re talkin
g about the assumption many merchants make by thinking that simply having an affiliate program in existence is enough to drive affiliate-generated revenue. This couldn’t be further from the truth. Again, check your ego at the door and understand that regardless of what your brand is, how well known you are, and how big consumer desire is for your product or service, building an affiliate program does not automatically equal success.
How many affiliate programs exist today? 10,000? 100,000? My official guess is A LOT. What makes your affiliate program more worthy of the attention of affiliates, who have the option to work with nearly any brand they want? Oh wait; you have a great brand name, and a great payout? So do many of your competitors.
Actively manage your program. Strategize. Partner with your affiliate partners. Ask the tough questions, and answer them honestly. And just when you think you have it all in place and running like a well-oiled machine, keep evaluating and growing.
The only way to find success through your affiliate program is to give it the time and attention that it both requires and deserves. When managed correctly, an affiliate program can become a huge portion of your overall sales, and should also be a hugely positive ROI-generating marketing channel. Don’t break any of the deadly sins, and you’ll be okay.