Merchants Do NOT Start an Affiliate Program Til You Do This

[Linda Buquet]

Please don't start an affiliate program IF your site is brand new and especially IF the product or business model is new.

It's not fair for affiliates to be your guinea pigs, since they are paid on straight commission and won't make a dime if your site is not optimized for conversions. Affiliates can't help your ailing sales either if conversions are sub par, because the responsibility of closing sales is on you.

I do free phone consultations for merchants all the time. 99.99% of the merchants I talk to don't qualify to be 5 Star programs and many are interested in management which I no longer do, so I end up just giving free advice, which is fine because I like helping people.

One of the common calls I get is from retailers saying "we are almost ready to launch our site so want to get an affiliate program started right away."

I tell them not to even think about starting an affiliate program at this stage. They ALWAYS object and say how great the new site will be or how hot the product is and insist they are ready to start an affiliate program immediately. Below, I'll try to share some of the advice I give in this type of situation. (By phone it works like a charm, however I'm sure I'll lose a lot in translation to the written word.)

Regardless how wonderful your product or new site is - the proof is in the eye of the consumer. Will they buy? How many will buy? Testing, tweaking and improving your conversion rates needs to be done BEFORE you even consider launching an affiliate program. It's taken Amazon years to get where they are, but even today they are still testing and tweaking to try to improve conversions. So you can't trust that a new site right out of the gate is going to convert, until you get a big enough sample of consumers hitting the site and see how many actually make a purchase.

Your pricing, your site design, your marketing copy, friendliness of your shopping cart and lots of other things affect conversions - and you, the site owner, are the only one that can tweak any of those things. So affiliates shouldn't pay the price for your lack of foresight on this issue. It isn't fair to them and it will cost you precious time and lost revenue opportunities.

One of the best ways for retailers to test, tweak and optimize conversions is for you to become your own 'pseudo-affiliate'. I'll explain more below.

1st of all, one of the reasons I have to go into this much detail and STRESS this to wanna-be merchants is because most are excited and insist they are ready to launch an affiliate program right away. Most of them also suffer from the illusion that starting an affiliate program is going to be a cheap, fast, easy way to start making sales from day one. Wrong!

IF you devote the time and money to build an affiliate program and IF you do it right, affiliate marketing CAN be your highest ROI sales channel over time. But it's not fast or easy - IF you do it right.

One of the hardest parts is recruiting good affiliates and that takes time. The last thing you want to do is go through 4 months of trying to build up an affiliate program and THEN find out your conversions aren't up to par, because you will lose your affiliates if they can't make any sales. So you need to test and optimize 1st. The best way to start the process???

"DO PPC & CONVERSION TESTING & PRETEND YOU ARE YOUR OWN AFFILIATE."

PPC is the fastest way to gets lots of targeted traffic. As you do your PPC and conversion testing - PRETEND you are your own affiliate. Set up an affiliate account for yourself on paper. So lets say you spend $1,000 on PPC and only make 3 sales. Lets say you planned to pay affiliates $20 per sale - pay yourself on paper. So you just made $60.

Ask yourself this... If you just spent 1000 on PPC & only made $60…
Would YOU want to be an affiliate for your company???

No you wouldn't! Now that's not to say all affiliates are going to do PPC, but again PPC is a way to get a lot of targeted traffic fast, so you can find out what your conversion rates are. Since you are the merchant - YOU ARE IN CONTROL to make the changes that could improve conversions. TRUST ME as you watch those PPC dollars go out the door with little or no return, you are going to be testing and tweaking to see what you can do to increase sales!

So that's part of what I tell retailers over the phone that want to prematurely launch. I go into more detail than that because I'm evaluating their needs and trying to tailor the info to their specific situation. I think the info I give comes across much better if you hear me explain it, rather than just read it. (Maybe someday I'll start doing podcasts and save my carpal from having to do these long posts.) ;-)

[Julia]

Just wanted to say that this is a really helpful post Linda, if only all new merchants could read it!

I think that many new merchants don't realize that affiliate programs serve to compliment their existing marketing strategies, instead of being their sole online marketing solution.

Another point that you touch upon is how long it takes for an affiliate program to see significant results - definitely not overnight!

[Smaxor]

I agree with 100% Linda. Nothing sucked as an affiliate more then a non-performing program.

Rather then just being concerned with how affiliates feel if you're an advertiser really consider your reputation in the eyes of affiliates. Certain sites & brands out there affiliates know work well. Guess what they talk and they also talk about the offers that don't. As an advertiser I think you really have one shot with most affiliates. Stop and imagine this for a second. You roll out your offer on an affiliate network and then the affiliate manager talks a couple of their larger pubs to test your offer out. They do your conversion ratio is awful and they bail never to touch your offer again. They also tell their closest 10 big AMarketing friends the offer doesn't convert either. ....

Make sure you test and run your offer to begin with in email and ppc at the very least. Make sure it converts before you put it out in the wild.

[Coach]

Very valuable information Linda!
Thanks for your insight.

Cheers,

[Linda Buquet]

You're very welcome Coach!