DFWSEM.org Presentation from AffGoo.com

4:42 pm   -   June 28th, 2006

This is the detailed presentation I gave to the Dallas Fort Worth Search Engine Marketing Association on June 26th.

The 10 Most Important Criteria You Must Meet to Attract Top Affiliates
10 Criteria Website Owners Must Look for in an Affiliate Program

By Durk Price

Durk Price is a professional affiliate manager with 12 years of online experience as well as over seven years of creating, launching and managing affiliate programs. He has launched and managed affiliate programs for large retailers like LimitedToo.com, BeautyTrends.com, WeShipBabyGifts.com, Stanford Social Innovation Review Magazine and others. His primary focus is managing affiliate programs for retail companies. To learn more about his services of putting top-level affiliates together with top quality merchants, visit http://www.affgoo.com. You may also email Durk at [email protected].

1. Ability to sell the product nationally or internationally. Localized products do not sell well in affiliate programs. Affiliates come from everywhere. Limiting the affiliate to a local market does not work. This also means many kinds of retail product distribution models limited by territories do not work.

2. Have a brand name or sell brand name products. Having brand names does make it easier to sell online. Having a branded category name is even easier. Does that mean you have to have a brand name to be successful… no.

3. Offer a competitively priced retail product. You don’t have to be the cheapest for sure. But if your competition is less expensive and you don’t have a value proposition to support your pricing model, you will have trouble getting affiliate sign ups.

4. Have a website that is attractive and compelling. So often overlooked as a determining factor, in many ways it is a major factor in the affiliate’s decision on whether to add your site links to his site. While he wants to make money, if he sees poor quality design work he is unlikely to add you. He knows if it’s ugly to him, it will be ugly to the visitors he refers to the site.

“There’s just too much competition out there and shoppers aren’t going to stick around long when they’re confronted with poor design, broken links, slow loading pages, a lame shopping cart, etc. While all of the points you mention are important factors, I think it all boils down to the products and the conversion – and good conversion is born from good design and product presentation on the site. Anyway, good article and I like the name of the site too.” David Zelken- ShareASale

5. You must know your website “numbers”.

• Number of visitors
• Number of sales
• Conversion rate of visitors to buyers
• Total online sales
• Average sale amount
• Lifetime value of the customer (you only pay the affiliate once)
• Target customer acquisition cost
• Customer acquisition cost from current online marketing efforts

6. Know what your competitors are doing. Like Homer Simpson says: “Doh”. There is competition in every category and every affiliate software application. Don’t ignore it, learn from it. Find out what the other guys are doing. Have someone sign up for their affiliate programs and check it out.

7. Know which of your competitors have affiliate programs. Find out what they are paying out, how long the program has been running and etc. Check the message boards and forums to see if they have any problems or if they are well thought of. And if none of them have affiliate programs… don’t run out and think you’ve found the promised land… maybe there is a reason your competitors don’t have an affiliate program.

8. Know what competitors are paying out to their affiliates. Simple research can tell you what they are paying out. Most affiliate programs have marketing information readily available, do the research and know what you are up against.

9. Know what you are willing to pay for someone (an affiliate) to sell your product. The competition is telling you something, your own numbers are telling something, now you must decide what your affiliate program payout should be.

“Just as you said, the commission amount is not at the top of the list for most affiliates. I talk to a lot of advertisers everyday that think they have a great product to offer and they always want to know what commission amount they need to slap up on the marquee in order to get affiliates to pick them up. That’s the easy part and it can be determined with a little bit of research.” David Zelken- ShareASale

10. Able to offer an aggressive affiliate payout. Brand names many times prescribe low payouts to affiliates. This makes getting affiliate buy-in difficult. I launched a national brand company with a really low payout after suggesting a much more aggressive customer acquisition number. The program started out well and then fell off dramatically after 60 days as affiliates tested the program and didn’t make enough money to justify their ad spends. They were gone. I was able to keep them by raising the commission, but almost lost them entirely because the program was not priced right coming out of the gate.

Affiliate Technology*

A. Commission Junction

• $2,250 setup fee
• $3,000 prepaid commission
• Monthly: 30% of affiliate payout or $500 whichever is greater
• 1.5M affiliates

B. ShareASale

• $350 setup fee
• $100 prepaid commission
• Monthly: 20% of the affiliate payout or $25 whichever is greater
• 200,000 affiliates

C. AvantLink (New)

• Datafeed conversion to search engine friendly RSS feed which affiliates can customize- very smart technology and great customer and affiliate support
• $500 setup fee
• $500 escrow commission
• Monthly: 3% commission
• 500 high value affiliates

D. DirectTrack

• $995 setup fee
• $100 a month for bandwidth
• No commission payout to DirectTrack
• No affiliate marketing provided

*Prices do not include setting up the program with internal or external resources.

Affiliate programs are marathons not sprints. Plan for the long-term, learn in the short term.

I have one client who has been adding 250-400 customers a month to its customer list during the 6 years I have been managing their affiliate program, adding over 20,000 “buyers”. They now sell more through their email efforts each month than through the affiliate program.

They understood the Lifetime Value of the Customer right from the beginning.