“There are risks and costs to a program of action. But they are far less than the long-range risks and costs of comfortable inaction.”
-John F. Kennedy
Being an affiliate manger is a tough job, no doubt about it. However, the benefits far outweigh the risks. To be a great affiliate manager you’ll face many challenges; however, challenges are mitigated and often eliminated with knowledge, preparation, and the right software. Let’s start by addressing some of the most common questions affiliate managers have.
Question #1: Is affiliate marketing right for my business?
Affiliate marketing is one of the most powerful and effective means of gaining new customers, regardless of your product or service. Affiliate marketing exposes your business to new customers and can get you out of a marketing rut. Additionally, when you initiate an affiliate marketing campaign, you’re in control. You determine the commission rate you pay and pay only when your affiliates make a sale. It’s a no-loss operation for you because you only pay when affiliates make sales.
Question #2: What are the start-up costs?
Starting an affiliate program gives you the choice of handling the operations yourself or having it managed by an affiliate network. The costs for either choice generally start around a few hundred dollars. To start an affiliate marketing program in-house, costs include:
Affiliate management software
Affiliate marketing support, including a website that answers affiliate questions and a means for them to contact you if any issues arise
Affiliate marketing materials including banner ads, copy, coupons, and promotional content
An affiliate marketing contract agreement
Tracking software to track cookies, click-throughs, payments, etc…
The ideal software solution…one all-encompassing program such as can be found at MemberSpeed.com rather than a piecemeal approach. If you choose to hire an affiliate network to handle your program, they generally charge a flat fee or a percentage of what you pay out each month.
Question #3: How much time will it take out of my workweek?
Most experts agree that it takes about an hour and a half each day to manage an affiliate program. They also recommend budgeting more time in the first few months of program implementation, approximately two to three hours a day. Even the most efficient affiliate managers spend about 45 minutes a day managing their affiliate program.
Professional affiliate managers generally spend an average of 40-80 hours a month dedicated to managing, tracking and promoting your affiliate program. This time varies depending on the level of automation and the efficiency of the software.
Question #4: Paying affiliates. What type of commission works best?
The right commission rate recruits money-motivated affiliates. According to a survey conducted by AffStat, 80% of affiliate programs use revenue sharing or cost per sale as compensation method, 19% use cost per action, and the remaining 1% use cost per click or some other method.
The general rule of thumb…set your default commission rate at a rate you can afford to pay, while leaving room for time-limited commission increase offers, promotions, and private offers. For example, if you can afford to pay 50% of your gross profit margin, pay 25% instead and tier it so that after affiliates reach their sales goal they earn 30%. Or you can bump it up to 50% during the holidays or during typically low sales times.
Question #5: How do I recruit affiliates?
Your customers may be your best affiliates. After all, they already appreciate and enjoy your products or services. Start with a simple link on your website. Here’s a few ways to find quality affiliates:
Social Networking: Online forums and other social networking sites can be excellent places to meet, greet and connect with like-minded individuals. They’re also a good resource for interested, motivated affiliates qualified to sell your products and services.
Link up: Find websites linking to your competitors and approach them about being an affiliate for you. Likewise, find affiliates using your favorite search engine and contact them about joining your program.
Affiliate networks/directories: Join an affiliate network or become listed on an affiliate directory. This ensures that affiliate marketers searching for new products and services to promote will find you.
Question #6: What is the best way to communicate with my affiliates?
Email is the general tool of choice, which makes an autoresponder a fantastic tool for basic emails like the welcome email, introducing promotions, coupons, sending links and banner ads, and answering frequently asked questions. It’s also generally advisable to have an email address, fax number, and telephone number available for when affiliates have questions unanswered by your frequently asked questions web page – or when they simply want to speak with you.
Question #7: How do I motivate affiliates?
Money motivates – no doubt about it. That being said, affiliates are also motivated by feeling they’re important to you. This means that when they ask for your time, you give it. Additionally, promotions, bonuses, prizes, contests, and commission increases all motivate and inspire affiliates. Constant communication, like sending a weekly or monthly e-zine, reminds affiliates you’re out there and investing in their success.
These questions present obvious challenges to managing an affiliate program. The key to success is both to hire great people and to automate as much of the affiliate program as humanly possible. We’ll take a look at how to do just that in our next article.so be sure to come back soon!
To Your Success!
Warm Regards,
Jeremy Gislason
Follow Jeremy on Twitter at:
http://twitter.com/SureFireWealth
