Referral programs - what if the referred sites aren't quality?

[Sarah Prater]

So, I am trying to figure out which affiliates should be given an additional 1% of commission to test out the theory that affiliates will perform for small incentives and see if I can increase sales.

I am toying with the idea of offering this extra 1% in the form of a referral program to select publishers - instead of tagging it on to the sales program. However, what if the referrals the pub gives aren't quality sites. I don't want to pay for referred sites that I don't approve!

Is it just as simple as setting Terms and Conditions to explain that we will only pay for qualified (approved) referrals? Or are referral program affiliates used to getting paid for every referral?

[Linda Buquet]

"Is it just as simple as setting Terms and Conditions to explain that we will only pay for qualified (approved) referrals? Or are referral program affiliates used to getting paid for every referral?"

Confused by some of your statements... you arent paying per lead or referral you are paying per sale right???

Not sure if 1% is enough to generate more sales. May be a better way to do it. Answer my Q above and I will try to give you some ideas.

[Sarah Prater]

Linda -

Sorry for the confusion. Looking back I am a little confused of where I was going too!

Let me start over...

There are some affiliates who recruit people to start a website business. One has asked whether they could refer the new business owners to me and have them join the affiliate program. They want to earn a percentage of every sale that the people they refer make.

I mentioned this to my sup and she says - why would we pay someone for referrals when we already get people applying to the program...?

I answer - because they are an additional referral that we may not have gotten.

"But, what if they don't sell?" she asks

Then neither the referred or referring publisher will get paid, I say.

I don't think we should do it, she says....

I say ok - and leave it alone. But I'm still wondering....how many more sales might we get? How can I determine what publishers would be best at delivering quality referrals?

Ok - so I am on a completely different track than the first post - making more sense now, though...I think. And I've lost the direct question...I've just told you about an exchange, really.

So - to the point....

What type of affiliate are most successful in referral programs?
What are some key indicators for whether an affiliate will deilver unique leads that wouldn't find us otherwise?

Thanks,

Sarah

[Linda Buquet]

"What type of affiliate are most successful in referral programs?
What are some key indicators for whether an affiliate will deilver unique leads that wouldn't find us otherwise?"

So to answer that one direct question... it's really hard to tell. Affiliate marketing is a numbers game and on average only around 5% of affiliates will produce for each merchant.

But the KEY is you don't know when an inactive affililiate could start becoming active. They could join, be busy and never promote your program and then 3 months later they build a whole new site devoted to promoting your products.

Obviously affiliates targeted to your market are best. But an affiliate could join your program with a blue widget site and you would not necessarily know they own 50 other sites and 3 of those are a perfect match for your products, they just need time to get around to adding your links.

[Sarah Prater]

I understand the 5% rule -

but I have been doing this review process - somewhat off and on, where I give an affiliate three months to show impressions or sales after they join.

The first month I review their site and give specific suggestions on links to use - where to post them. Then in the second month if they have posted links I tell them how well the links are doing and suggest replacement links or change the landing page the link goes to.

If nothing happens by the third month - they have no links or impressions and haven't responded to any mails - I expire them.

I have fudged on this rule a bit if the publisher has a very content-rich site that meshes with our product line of speakers, sound cards and MP3 Players very well.

So, do you think this whole process is a bad idea, then?

You probably will disagree with my recent decision to "clean house" as well. I basically gave all publshers a three month warning that they needed to get links up and generate traffic or sales. Then when promised - I went through and kicked out massive numbers of publishers who had never generated any traffic or sales - since they started (for some that was years, for others it was 6 months) No one who had not had their three-month review time was expired.

I get the feeling from your previous comment that I should abandon this practice and focus on how to hook affiliates - eventhose that have been inactive for years to start prmoting and selling again.

What are some ideas resources you might know of for how to reel 'em back in?

[Linda Buquet]

Hi Sarah,

Read these blogs for some great insight and ideas -

Ultimate Affiliate Activation Email from zZounds Affiliate Manager
http://affiliate-blogs.5staraffiliat...ivation-email/

Booting Inactive Affiliates? Affiliate Activation Campaigns Gone Bad
http://affiliate-blogs.5staraffiliat...ion-campaigns/

Top 7 Reasons Your Affiliates Could be Inactive - Don’t Expire Them
http://affiliate-blogs.5staraffiliat...ates-inactive/