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Old 07-29-2002, 11:11 AM   #1
ube
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Default [Merchant needs advice] Who Makes Who?

This post has been pre-approved by Steve:

I have posted on another forum and consulted a couple of webmasters, my
question is How does a new company with a new affiliate program get and
maintain producing affiliates?
I have been told many different things and would like some honest
productive advice that doesn't include giving all my profit away.
Some have said that when I can provide a better track record they would
love to help. This seems to be a no brainer, if I had a great program with a
great track record I would not need to ask these questions.
Lot's have offered to sell there services and I have even paid for some
that seemed to be a good idea, again to no avail.
I would like to see some quality suggestions to merchants from affiliates
on how we can gain your trust and help you promote our company.

Thank you,
Craig Uberroth

Last edited by Steve_S; 07-29-2002 at 11:14 AM.
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Old 07-29-2002, 11:37 AM   #2
Steve_S
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Default

Good luck Some thoughts in no particular order.

Let's start with your site:

1. Publish a FAQ and include prominent links to this page. Include return policy, contact data, refunds, exspected delivry date, and more

2. Your order page at cart/cp/cgi-bin/cp-app.cgi is not secure (https) plus you haven't told me what forms of payment you accept before I arrive at this page.

3. Trust/Confidence and quality "partners" takes time and you don't need thousands of them to run a money making CPA program.

4. Your home page needs a few tweaks. Go for the "close" on this page with an order/add to cart link on this page. Talk features and benifits. Don't be bashfull about the "close/sale" on this page and try and create either a "Sale" item and or discount package of some sort on this page.

HTH
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Old 07-29-2002, 11:40 AM   #3
Czar

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It's hard to give you advice without knowing exactly what you've done already and what sort of margins you have to work with.

Your Geek/Marketplace post indicates that you are managing a sales-based program at ShareASale that pays a 10% commission. The most obvious next step would be to replicate that program at FineClicks and ClickXchange and - if at all possible - to boost the commission slightly. I understand that can be demanding on a marketing budget, but 10% on a specialty product is not hugely appealing in a network filled with digital products that offer affiliates commission rates above that range.

A second logical step is to promote the program through the many affiliate program directories that exist online. The 5% second-tier bonus will help to convince many editors that listing your program is to their benefit.

Beyond that, buying placements on the leading pay-per-click search engines that promote your products, the affiliate program itself - or both. These buys frequently prove profitable investments for merchants.

Anyway, that should be enough to get you going. You may find further options within this forum's archives, where similar questions have been posed by startup affiliate managers on several previous occasions.

HTH
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Old 07-29-2002, 07:01 PM   #4
Edwin
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> I have been told many different things and would like some honest productive advice that doesn't include giving all my profit away.

Here's the really hard question you have to answer: does your product have enough "profit" in it to support a COMPETITIVE affiliate program?

Everyone in this thread has offered you suggestions to help you improve your chances, but I'm suggesting that you should go back to the fundamentals.

Speaking generally, I have seen literally HUNDREDS of affiliate programs where it's clear that the numbers simply won't work i.e. their value-proposition is never going to be attractive enough to attract effective affiliates.

By "effective", I mean "affiliates that can actually close useful numbers of sales". You see, the affiliate market works pretty much on the 95/5 rule: 95% of all sales are made by about 5% of all affiliates. This means that you could have several hundred affiliates working for you, yet still only be generating an aggregate handful of orders a month.

To work out what the value proposition is in the case of your product, you need to start from the metrics that you have available to you (that's the easy part!) and then plug in a series of assumptions so that you have a range of possible values, bounded by "optimistic" and "pessimistic" scenarios on the high and low ends.

I can fill in some of the equation, but some of the numbers only you will know...

Your product costs $19.95 and you're offering a 10% commission on each sale. That means that each sale is worth $1.99 to an affiliate.

Now, let's say that 5% of visitors to your site go on to purchase the product (you have to mentally swap this 5% for the real number, which I assume that you can deduce from your traffic logs and sales records)

That means that each site visitor is worth $0.99 to you, or $0.10 to an affiliate.

So you've got a few baseline numbers to play with. Now let's add some more.

You make a series of banners, buttons and text ads available to affiliates. These get from a low of 0.2% to a high of 2% click-through rate (here we really have to estimate until you can sign up sufficient affiliates to replace these numbers by the "real" figures)

So for every 1,000 exposures of your advertising material, from 2 to 20 people will go on to visit your site.

This means that for an affiliate, the possible revenue per 1,000 exposures of your banner is $0.20 to $2.

These values stem from a lot of assumptions. As I said at the beginning, only you are in a position to substitute more accurate figures, but my estimate is probably ballpark. It could be a little worse in reality or it could be a little better, but fundamentally affiliates are probably not going to be making $5+ CPM on your product.

So you then have to think about whether "effective" affiliates are going to get excited at the chance of earning from $0.20 to $2 CPM - the answer may be yes, or it may be no (personally, I think it's going to be closer to no than yes, but ultimately it does depend on how persuasive you can get)

If you really want to improve your chances of signing up effective affiliates, then I would try to track down medium to high-traffic sites with audiences that are likely to be interested in your product, and offer them a baseline GUARANTEED MINIMUM CPM on a certain number of impressions.

For example, if you find a computer furniture site and you think that they'd be compatible with your target market, you could offer them a guaranteed minimum CPM of $1.50 on 200,000 ad exposures (large sites aren't going to be interested in sums much under a couple of hundreds dollars IMO since the setup time and hassle isn't worth it). In other words, they run your ad at least 200,000 times (hopefully in a combination of ways i.e. testing various banners, buttons etc.) and in return you promise they will receive no less than $300, no matter how well or badly the ad performs. Of course, it goes almost without saying that they will receive the actual commission if it earns them over $300!

So by spreading a thousand dollars or so across a few very targeted sites, you should be able to generate at least SOME sales (and hopefully, enough to make the whole exercise profitable!) but more importantly, you'll have been able to answer the "viability" question categorically:

- If, at the end of the test, even the carefully selected super-targeted sites couldn't generate a viable CPM equivalent from the very best creative material you could offer them, then your affiliate program will NOT WORK

- If, at the end of the test, your carefully selected partners managed to generate an attractive CPM equivalent, you can then use the metrics you gathered as proof to help you convince other targeted affiliates that your program WILL WORK

At the end of the day, it's as clear-cut as that: either you have a viable value proposition, or you don't - but not knowing is the worst situation of all!

Good luck with the program.

Last edited by Edwin; 07-29-2002 at 07:02 PM.
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