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Performance Suggestions for Running Optimal Affiliate Programs

Strength In Numbers - Contribute to Program's Success
Certainly it is true that you would not have split the profits, if you could do it all yourself. Meaning if you put up your own little web site, market it and maintain customer relations all in the course of maintaining your business, shipping out product and managing the finances.

Well, with affiliate marketing, the internet introduced the notion of shared party advertising .. Okay so the internet did not introduce it. Rather, if you think of co-op advertising, the concept of shopping malls and even publishing, you realize the notion of pooled resources has been around quite some time.

Relying upon the strength of sites behemoth sites as an Amazon or Ebay, affiliates are able to tap into the enormous exposure of their resources at a risk much more reasonable then what is available to them via traditional advertising outlets.

Back to the example of Amazon which offers a very enticing affiliate program. Effectively, the affiliate web site can make money selling books without having to actually do the work. Rather, it is the responsibility of the webmaster to select which books to sell and incorporate them into her Web site.

Because affiliate programs are usually free, many web sites enlist a plethora, operating under the assumption that between the bulk of them eventually they will make a decent amount of money..
Yet, there is something to be said for spreading yourself too thin. Unfortunately, a gaggle of affiliates can wind up making your site look like one big advertisement. a statement which can detract other potential affiliates from enlisting.

Your main assets as a content-driven web site are your content, your traffic and your knowledge of that traffic That is why it is a much better strategy to use the information you have and pick affiliate programs that would best serve your visitors and best supplement your content. If the programs you choose match the content of your site, it should be fairly easy to lead your visitors to participate in them.

Enacting your own Partnership(s)
PAY FOR PERFORMANCE
Relationships enacted for the purpose of facilitating transactions originating from associated sites (also referred to as CPA marketing) can be divided into two groups:

  • Strategic partnerships: Relationships with key web sites that are viewed as being highly relevant to the goods and services your business | site offers.
  • Affiliate relationships: Relationships you build on a volume basis with smaller sites looking to create additional revenue through product offerings.

As strategic partnerships are sites you will need to personally recruit, you may want to begin by creating a list of sites with which you feel you would have good synergy. The two important things to keep in mind is that these sites have a large built-in audience and are relevant to the goods and services you are selling. Most likely, each site you select will require that you enter into a unique agreement pertaining to the types of transactions you can conduct in conjunction with their site.

In contrast, affiliate relationships are sites that come to you with a desire to participate in your affiliate program. A standard program to which affiliates can subscribe is necessary in order to expedite volumes of requests in a consistent manner: The following outlines the Items to include in a standard program agreement:

  • Payment amount: How much per transaction will you provide an affiliate? This could be on a percentage basis or represented as a flat fee.
  • Payment terms: When will you pay affiliates? Are there minimums? Some programs pay on a monthly basis others pay on a quarterly. Some have minimums affiliates need to meet, or the amount is pushed into the next payment period.
  • Chargebacks: Within your affiliate terms, it is essential that you include that matter of charge backs. As charge backs account for returns and other discrepancies, you will not wanting these charges reversed back to you, the merchant.
  • Promotions: It helps to offer incentives to your affiliates via which they may promote their goods and your services on their site. Promotions can take all kinds of forms including: banners, buttons, links and catalogs,.
  • Tracking: It is also suggested that all of your promotional vehicles have tracking associated with them to determine the guiding source of the transactions. It should follow the user from the origin site through the final transaction. A decisive element to the marketing campaign, tracking offers sellers a viable tool with which to gauge their productivity and outlays of costs.
Accounting: Affiliates will expect to receive regular accounting | financial statements outlining their activity levels. These reports should be made available either through an online interface or via mailings as the affiliate will most definitely want a complete statement indicating how the amount of their commission check was derived.

Unless you have the internal resources to establish an affiliate program, you may want to use a third-party facilitator to expedite an accounting program. Companies like Commission Junction and Linkshare have turnkey programs for merchants. Do know there tends to be a set-up fee to establish an affiliate program, along with a charge per transaction conducted through such systems. Yet, you will also be listed in their directory of affiliate programs where interested publishers can automatically sign up for your program.

In addition to your affiliate programs, both Commission Junction and Linkshare can handle partner payments for the strategic relationships you create. You can create specific profiles for these partners complete with their payment terms embedded.

Once your affiliate program is established, you should immediately start listing it through available affiliate site directories such as: AffiliatesDirectory.com and AffiliateFind which both list affiliate programs on the Net.

Tips for Affiliates To Increase Levels of Productivity
The whole premise of Affiliate programs is the reliance upon the merchant's strength to draw traffic to their primary site. In turn, the wider the audience, the greater the potential for viewers to tap into an affiliates site and subsequent offerings.

However, the majority of sites focus on singular sales versus multiple sales amassed by having cultivated loyal consumers. Hence, too many inadvertently and ineffectually spend their time pursuing new customers rather than focusing their efforts on satisfying their existing clients.

Without a good sales process and target marketing, sales continual to be mid-range, at best. Though you can stand back and deviate to the merchant to lure traffic, without doing your part to bring in viewers, you may never develop a core audience. That is why it is very important that a good part of your energies be used to follow up with your loyal customers who have previously made purchases.
While first time sales will generate, at best, a 30 purchase rate, the average is between 1 to 2 percent. In user-friendly terms, that is one sale per hundred visitors.

When repeat sales begin to occur, and statistics do show that customers who have bought once will respond much better to forthcoming offers, the ratio changes to reflect an increased purchasing rate of between 20 and 30 percent. To compare, the figure has now inflated to 20 customers per hundred compared to one per hundred.

The lesson to be learned is that if someone buys you once, they are more likely to buy from you again and again. So make sure you treat your customers with respect and you assuredly build up your list of customers. This is the most crucial aspect of your business. Though affiliate programs give you a host of tools and promotional incentives that you may, in turn, offer your customers, it is critical that you go one step beyond and cultivate the relationships once they have been initiated.

Becoming an affiliate for other Web sites' products and service is a great idea if you take the right steps. The following are things to look for, and ways to plan out what you are about to do.

  1. Sell One Thing and Sell it Well
    As the Web is a virtually free publishing medium that allows people to offer anything quickly and easily, for the most part, web flea markets do not work.

    Though users have free access to this mass distribution system commonly referred to as the Internet, they do not have unlimited time. Therefore, a web site obliterated by tons of information and hordes of merchandise will cut into people's surfing time and, ultimately, disengage their level of interest.

    Too many web sites, by selling everything from A to Z, want to prove they can be all things to all people. However, seldom has this approach proven successful from a business perspective. Better to offer qualitative information | merchandise as opposed to quantitative. Narrow your site's focus, invest your energies in enhancing your methodologies and follow-up skills.

  2. Establish a Presence | Set Realistic Market Bearing Price Margins
    Remember to lead with an entry product that is not too expensive, and follow up with the more expensive items later. After you have built up your site's trust and name recognition components, you will then be in a better position to sell pricier goods and services.

    Compare competitive sites to learn the prices they are charging for similar products and price yours accordingly. Sure it is good to offer the utmost in quality, however, It will severely cut into your numbers, if you completely price it of the market.

    May be more prudent to initially establish your ability to sell to the masses, in volume quantities, as opposed to the elite in fewer numbers.

  3. Don't just Display a Banner Ad and hope for the Best
    Many affiliate programs put up banner ads; the visitor simply clicks on the banner ad and goes to the company's Web Site to make the buying decision. Statistics show that only 1-2 percent of people will actually click on banner ads. So that being said, suppose you attract 1,000 visitors/ month to your site, that will merely result in a possible 10 to 20 persons expressing an interest in the banner ad. Hence, even if you manage to convert 30 of these clicks to sales, you will end up making only one or two sales per month.

    Truth to be told, internet enterprise is essentially a game of numbers. Should you have a site with phenomenal traffic, things may be different. Yet, even in such situations, on account of the fact volume businesses often prove difficult to profit from; it is highly advised that, in addition to putting up a banner ad, you utilize additional marketing strategies.

  4. Keep 'em interested with Content, Consistency & Currency
    On behalf of the fact they entertain, as well as inform, advertorials have proven to be highly effective sales and marketing tools. So if you liken your site to an advertorial, whereas your purpose is still to sell product but you are also illuminating your reader in the process, in the long run, you may find it yields better results.

    Also good to keep in mind anything that signals a deviation to a potential buyer can interrupt their purshcase to buy. Thus, if continuity is lacking between your site and the merchants, this may set-up feeling of discomfort and hesitation. Best to continually modify | update your site (as stale information also usually raises red flags), maintain consistency, and strive to emulate the page to which will be linking. If it changes, it sends an indication to the customer they are in a different retail space.

  5. Target | It is not just a store it is a state of mind
    If you try to sell to everyone, you end up selling to no one. Time and time again, this has proven to be true.
    Simply put, target your market and make sure they are a) Interested in what you are selling and 2) Can afford what you have to offer.
    .
  6. Take Your Blinders Off
    Not all products are created equal. Hence, as obvious as it may seem, review what others are selling on the merchant and affiliated sites. According to any respectable business acumen, the company with which you keep is your ultimate responsibility.

    As this implies, should you eventually learn others with whom you are cohabitating with on the internet are living up to the claims they are making, then you may be lumped in with them for failing to take previous notice. Where business is concerned, ignorance is not bliss but rather can result in a costly a mistake.

Choose Wisely: Carefully Read the Terms of Agreement
When considering whether to join a particular affiliate program, you may want to review the fine points of the document you must sign prior to officially becoming a member..
When you read closely, hidden somewhere within the agreement under Affiliate Agreement or Terms of Consideration, you will find the answers to the following questions:

How is "revenue" defined
Most affiliate programs operate in a commission-based manner. Hence, they pay a certain percentage of the revenue generated by visitors to your site. Word of caution, however, the meaning of "revenue" can vary wildly depending on which site's affiliate program you're looking at.

The majority of affiliate programs calculate commissions on the gross value of a sale, that is, the amount of money the site is due to receive in payment for the goods or services being ordered. Most often, this excludes credit-card or other payment processing surcharges, and delivery, packing, gift-wrapping and handling charges.

Some affiliate programs employ a much narrower definition of "revenue". For example, some only calculate commissions on the "profit margin" of a sale. In this scenario, it is very easy for merchants to find ways to trim away the "profits". So, unless there is a very enticing reason to join, you are best not to enlist in this kind of affiliate arrangement.

Also it is important that you be on the lookout for the inclusion of such odd clauses as :

Returns and Charge backs
Perhaps understandable from a business perspective, you need to be aware of the fact that affiliate programs only pay for processed sales in which the customer has decided to keep the goods.
Should a customer opt to return the product, the commission is likely to be cancelled, and you may even be billed for the outstanding commission if you have not yet amassed affiliate credit with the company.

Charge backs occur when a customer disputes a credit card charge with their credit card provider, and has the money refunded to their account. You need to keep a close watch on what percentage of orders get charged back or refunded, and be on the lookout for suspicious patterns of behavior.

For instance, if the orders that get charged back are always the highest ticket orders, it's possible that the affiliate program manager is feeding you false chargeback statistics in order to minimize the commission payable to you.

Excessive charge backs and returns can also be an indicator of other problems. For example, if most customers are choosing to cancel a service during an initial 30-day money-back guarantee period, it's likely that the service is being misrepresented or is otherwise of very poor quality, and is not what customers had been led to expect.

What is commissionable?
You need to be clear what you will earn commission on, and - more important yet - what products or services are excluded from an affiliate program. Some merchants only offer commission on "selected" products or services, so should a visitor to your site buy something not included in this category, you will not get credit for the sale.

Some affiliate programs take this one step further and only pay a commission for the specific item to which you are linked or, even, pay only if the visitor fills in the payment details immediately without clicking on any other link.

While other affiliate programs pay a commission on a time-sensitive basis. Meaning that they will honor payment on all products purchased during a particular site visit, or on the total number of items sold during a specified time period i.e. 30 days.

Note: Any affiliate program which continues to reward affiliates for purchases made by visitors after their initial session must typically rely upon cookies to track these post-time period purchases.

The role of cookies
Many sites make use of a tracking technology known as "cookies" to keep track of a visitor's progress across the site. A "cookie" is a small piece of data that is stored automatically by a web browser. Inside the cookie, the site will have encoded a certain amount of information about the customer, such as a unique tracking code or address details.

The problem with this approach is that cookies can be refused, discarded and eaten. Savvier web surfers, worried about their online privacy, have learned to refuse the acceptance of cookies from the web sites they visit. Also, cookies can expire and gets overwritten by new ones. These situations are mentioned because if visitors do not accept cookies or they become obsolete, then there is no way of tracking their future purchases. So should you be participating in a program in which you are due to receive income over an extended period of time, you may find this tactic to not be very lucrative.

Unrealistic trial periods
If an affiliate program relies on cookies on an ongoing basis to track conversions from an extended free trial (e.g. 30 days free use of an email service or host provider), there is a good chance the cookie will be deleted or overwritten before the free trial participants become converted paying users. Should the cookie be gone, or the user opts to sign up from a computer other than the one on which the cookie was stored on, you are liable to miss out on a commission.

However, on the more positive front, some affiliate programs will associate free trial accounts with your personalized affiliate code, therefore successfully tracking and crediting all conversions.

Commission thresholds, roll-overs and deductions
Most affiliate programs operate on a monthly or quarterly basis. That is to say, at the end of each month or quarter, they will calculate the commission payable to each affiliate based on the amount of business the affiliate has generated during the period, and issue a check in that amount.

Three elements of an affiliate program that have the potential to effect your eventual chance of receiving proper payment:

The commission threshold is the minimum amount an affiliate has to earn in order to get paid during a specified period. Many affiliate programs set this threshold at a relatively approachable level. However, be cautious of affiliate programs that have an excessively high commission threshold, or have a commission threshold disproportionate to the average commission generated by a single transaction.

The roll-over (or carry-over) criteria define how a particular affiliate program will handle payments to affiliates that have not reached the minimum commission level required for a check to be issued. Most affiliate programs will roll over the payments into the next monthly or quarterly pay period, and will continue to roll over payments until an affiliate either reaches the required minimum amount or disbands.

However, some affiliate programs will not roll over earnings at all, or will stop rolling over earnings at the end of a predefined period (for example, earnings are not carried over from one calendar year to the next). In this case, you have just lost whatever below-the-minimum level cash you earned. Hence, enrollment in any affiliate program which has no form of roll-over payment plan is strongly discouraged.
Also, wise to pay attention to mentions made of deductions which will occur. Programs may make deductions for a variety of reasons, i.e. charge a fee to issue your check (also called a processing fee) or charge an "administrative fee" on all commissions being rolled over per each pay period.. As all affiliate programs may vary in the deductions they make, it is suggested that you review the terms per each and use your sense as you compare and contrast the fine print.

Terms of payment
While most affiliate programs pay promptly, usually a few days after the end of the month or quarter; others may take up to 90 days, a time frame which may expose you to such risks as bankruptcy or server clashes. Sometimes in weighing the term of competing affiliates; it may prove prudent to go with the one that though, may pay less, will pay-out sooner.

New clients and existing clients
Review the jargon stipulating pay based upon whether the visitor is a first time or a repeat customer. Some affiliate programs will only pay you for the sale to a first-time client. So should your site send repeated customers, you, in turn, will not be compensated. This leads to the paradox that the more successful the site gets, the less desirable the affiliate program becomes. This occurs on account of the probability that, though, the volume of clients you refer may increase the figures will encompass growing numbers of repeat customers.

Exclusivity
Though the merchant site may have several affiliates who fall under the same category as your site, i.e. insurance carrier, they, in turn, may want to impose hefty and unreasonable exclusivity requirements upon you. As stated in their agreements, some affiliate programs may forbid you to work with competing companies for specified time periods, may be months even years.

NOTE: Not all exclusivity clauses are automatically bad... On the flip side, it can and often does benefit the affiliate who, on a page-by-page basis, can sign onto an exclusivity agreement. This will ban other competing entities ads from appearing on the same web page as yours.

No Back Door Short Cuts
Look out for affiliate programs which state in writing that you will penalized should you attempt to purchase products yourself via your affiliate link in order to get the commission kicked back to you. In the bleakest of scenarios, you could lose all of the commissions promised to you just for placing a single order. So rather than make that mistake, always take the 'front door' approach.

   
 
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