First off, I want to specify that this guide is directed at people who want to start a cost-per-sale program for physical products – Shareasale/CJ/Linkshare kind of stuff. CPA affiliate programs can do very well, but they’re an entirely different ballgame. With physical products/CPS programs, your biggest worries are usually pretty mundane stuff like trademark bidders or people sending lots of junky clicks and driving down your EPC. With CPA networks, you’ll often find that it’s more fraud than legit traffic, especially in the beginning – and that’s before you even begin to take into account people who are non-compliant and/or questionable. Think of the worst thing you’ve ever done to promote an affiliate program, then multiply that by 100, perhaps more if you’re dealing with an offer that doesn’t require a credit card or extensive personal details (like dating). It’s really unbelievable sometimes.
So anyway, back to the point. CPS programs. When I first talk to a potential client about starting an affiliate program, my biggest concern is that they have realistic expectations. A lot of people have been fed a line about how affiliate programs are essentially "free" promotion, how you only pay when you get sales, how thousands of people will promote your stuff, etc. As a result, I find that a large percentage of people have crazy expectations about how they’l turn on the program and immediately get thousands upon thousands of new customers without any initial investment other than the network setup fees.
I usually find that it helps to explain HOW the overall process works. First, the program goes live. Some affiliates are contacted, and others start to discover the program in Shareasale. For a very tiny percentage of these people (most likely <1%) will immediately add a banner or link to their site. Unfortunately, the people who do this tend to drive very few sales unless you get lucky and they have a high-traffic, relevant website AND they give you a good spot/don’t rotate your banner with other banners.
If you allow coupon sites, you’ll see your links start to pop up on those types of sites within a week or two. If your site has a lot of traffic or a recognizable brand name, you’ll see coupon sales pretty quickly – whether you have coupons or not. Those affiliates get the bulk of their traffic from trademark searches, so they rarely generate a large number of "new" sales. Personally, I disallow coupon sites UNLESS the merchant specifically says they don’t want to.
If you didn’t restrict trademark bidding, you’ll see some trademark bidders popping up pretty quickly, especially if there’s good search volume on the company name. I typically ban these peope, too. If someone is typing the company name into google, they were already on their way to the site and the affiliate really didn’t do anything to contribute.
The best affiliates generally take a little while to get going. They’re the ones who are:
-Writing articles about your products
-Doing blog posts to feature specific items
-Building sites/sections of sites to feature your products
This doesn’t happen overnight, as we all know. Clients often fail to realize that, so it’s important to spell it out. It helps to point out that Shareasale even has a rule that new merchants don’t have to pay their full minimum monthly commission for the first 6 months of the program (I think it’s 6, might be a little more). That’s because IT TAKES TIME TO BUILD UP CONSISTENT SALES
Good signs in a client include:
-Client understands how affiliates work – I’ve seriously had people tell me things like "cancel any affiliate who doesn’t make a sale within 30 days", "cancel any affiliate who doesn’t do at least $500 in sales/month", "interview affiliate to see what their experience is like and whether they’ve worked with brands like ours", etc. A surprising number of clients act like they’re hiring an employee…yet they expect to pay only when sales come in. If these beliefs can’t be corrected ASAP, ABORT MISSION. You will be miserable
-The business is not brand new. It’s not that you shouldn’t start an affiliate program right away – but brand new businesses often need too much from their affiliate program in the beginning. Very often, you’ll find they have out of the box shopping cart solutions, no optimization to the conversion process, no revenue, etc. It makes your job a lot harder, and if your site doesn’t convert when you launch to affiliates, it can hurt your reputation with people who could have been good partners.
-The business has multiple streams of traffic and income. They’re not relying on the affiliate program to sustain the business. That’s just too much to expect out of a brand new program.
-Client gets back to you quickly with things you need (FTP access, a login to the cart, etc).
-Client is willing to invest in the business. Ask about the other marketing efforts that have been made, and see if you can determine the client’s attitude about all of it. You want someone who understands that it takes a little money to make money, and who isn’t bitter the moment something fails (because there will always be failures).
Once you’ve qualified your client, you also need to qualify their program:
Are they willing to do what it takes to make the program attractive to affiliates?
-Good cookie length
-Pay for banners
-Pay for datafeed and possibly also GoldenCAN
-Generous commission structure compared to similar programs
-Good number of varied products OR a small number of high commission products. Lots of products = appealing to bloggers/datafeed people, and high commission products make it easier for people to justify a lot of work (like SEO) to drive traffic.
-An attractive and functional website with good product photos
-No obvious leaks (huge phone number at top, AdSense on page, etc.)
Think about whether you’d promote it if you were in the affiliate’s position. If it’s not a good program, you’re going to work twice as hard to get half the results. That’s not in anyone’s best interest.
When you’re ready to quote, I generally recommend quoting higher than you think you need to go. Until you’ve done a program or two, you really have no idea how much work is involved in getting the first sales going.
As far as networks are concerned, I highly recommend Shareasale for almost any situation with physical products. This is why:
-Low setup fees compared to LS/CJ/etc
-Low monthly fees compared to LS/CJ/etc
-Greater control – you get a report showing you every sale with IP, transaction ID, referring URL, etc. You can reverse sales on your own as needed (but your reversal rate IS published, so you have to consider that, too).
-Affiliate instruction – check their blog; they have regular webinars to teach affiliates how to use the interface. This is AWESOME for newbies and it prevents you from having to explain as much to affiliates.
-Cheap recruiting. They have a new program that lets you send out recruitment messages for $200 and you get $5 back for each affiliate who accepts your offer. Talk to CJ and you’ll quickly realize this is a bargain.
-Easy deep linking for affiliates. They have a "Create a custom link" tool that lets people quickly and easily deep link wherever they choose on your site with no extra effort. I’m not sure why other networks don’t offer this.
-Good support – they don’t charge you extra to talk to someone on their staff.
So anyway, back to the quote. You’ll need to let clients know Shareasale‘s fees and let them know they will need to submit a credit card to cover the setup + ongoing commissions and fees (SAS charges a small % of each sale). This is all separate from your fees, and they should be clear on that fact.
For setup fees, I generally recommend $3-5k for a new program, but it really depends on your level of experience and what the client can bear. For a very large, well-funded company (especially one with a lot of red tape to slow you down), I may go a bit higher. If they want extra things or they want to opt out of some things, I may alter it a bit based on that.
For monthly fees, I generally come in a bit less than an outsourced program management company. Most of those companies start around $2-3k/month + performance fees, and they can go up quite a bit from there. As a single consultant, it’s best to go a bit lower on your base rate since you probably won’t offer the same kind of availability and support staff. You can charge more if you have a list of affiliates to promote the program to – Evan Weber’s company, for example, promotes the heck out of their programs. The guy is all over the place shoving his offers in front of affiliates, running contests, etc. If you want to specialize in OPM (outsourced program management), take notes. You don’t have to do all that, but it definitely impresses potential clients.
Personally, I structure my monthly fees with a base monthly fee and a performance bonus (usually 1-5% of total affiliate revenue).
Here’s a rough outline of what you’ll want to include with setup and monthly payments…
–Shareasale technical setup and testing (which is really just placing a pixel and test order, but this makes it sound more impressive)
-Creation of program documentation (setting up T&C or working with their lawyers to do so, creating some simple copy about the program, writing program acceptance message, perhaps an early newsletter for your very first affiliates, etc.)
-Banners – I recommend at least 5-19, but it doesn’t hurt to get even more, especially if there are a lot of sales and product types.
-Contacting potential affiliates – This sounds like a small line item, but it’s by far the most time-consuming part of any new program. I like to dress it up with phrases like "combing thousands of relevant industry sites to find the top potential affiliates for your program", etc. If you don’t play it up, clients will dramatically underestimate what you’re doing for all that money they’re paying you.
-Educating new affiliates (yes, you will get people asking you how to make their link, to look at their site and tell you if it’s good, etc.)
-Datafeed setup – some carts can easily make a feed, some people will have a developer generate it, and some people will need datafeed services like GoDatafeed.com
-Datafeed distribution – PopShops and GoldenCAN are the big ones, but there are others – https://www.amnavigator.com/blog/2012…ct-data-feeds/ If the client has enough products to make datafeeds worthwhile, figure out what they’re willing to pay and include setup fees accordingly. For PopShops, all you really have to do is contact them and tell them you have a feed and they’ll add you (but they’re a big slow). GoldenCAN is a recurring monthly fee, and affiliates get grumpy if you take it away after adding your program there – so make sure the client understands that before they signup for 1-2 months and kill it off.
-Optional – creation of an affiliate resource site and autoresponder. Every merchant is different, but some like to have a place to send their customers who ask about an affiliate program…and these people frequently need to be educated. For something like this, I will often build a simple site or have their developers build out a section of the site to host help articles or an aWeber signup to receive articles over time. If they have no specific preference, it’s better to host and maintain all of this yourself and promote it as part of your services. If you own the site and the data, you’re building an asset you can use in the future with your other programs (just make sure everybody is on the same page)
Monthly Duties –
-Datafeed updates (Shareasale has a manual upload process)
-Affiliate newsletters and tutorials
-Monthly reversals before the 20th (their sale lock date for the previous month’s sales) – check their returns, etc. and reverse orders accordingly. Some merchants skip this in the interest of keeping their reversal rate low.
-Fraud and noncompliance detection
-If you attend conferences, you can play up the fact that they’ll have a "presence" at shows and you meet a lot of affiliates in person. Some clients involve a lot of meetings at shows, while most will be very minimal in their demands. Some clients will actually pay for your attendance, depending on what they ask of you at the shows. If you’re genuinely an active part of the affiliate community, that adds HUGE value.
-If you’re active in forums and you promote your program tastefully, that’s another thing to really promote as a bonus to the client.
-Some clients may ask you to join their customer service ticketing system and handle all inquiries relating to the affiliate program. If that’s something they want, be sure to build it into the price since it takes time to log in every day or two to check for new tickets, then answer them.
Other things worth considering when you’re forming an agreement to set up an affiliate program:
-It’s good to have a guarantee. Some people are really twitchy when they see few or no sales in the first month or two. I’ve had far too many clients bail at the 2-4 month mark, just as they were starting to get momentum. A 6-19 month agreement is a good idea. A long contract freaks some people out, but if you explain it well and keep them informed all throughout, most GOOD clients will understand. You don’t just "flip a switch" and turn on free sales.
-I like to include a promotional budget in MY fees in a lot of cases. Clients can be tight once you get going, so if you want to do small contests or sales bonuses, it’s usually best to do it out of your own pocket.
-Education is key. You can get a LOT of newbies building little niche-specific sites if you show them how. Build this into your quotes and follow through. Sometimes, you can arrange to create tutorials for gurus/instructional sites to get greater reach, too. Forum posts are also good for that, so long as you’re not being a nuisance to the community
-Get some money in advance and set clear milestones/payment dates for the future. Always a good idea
Anyway, this is a crazy long post and I’m sure I missed some things – so feel free to ask questions or add stuff from your own experience managing affiliate programs.
From:stefanie Date: 02-18-19
In your opinion does it look like the major platforms like LS, SAS, etc will try to commoditize the OPM’s like Google has tried to do with "Adwords mngmnt" and passing out silly coupons as a lead gen later to contact your customers?
Also, if you were willing to build and staff an OPM, do you see it as a service in the beginning, middle, or end of its lifecycle?
Have you seen any demand for local aff programs to be set up? I thought about this a couple years ago, but tracking tech did not seem there. I believe hasoffers has something with QR’s now but havent seen anyone be the pioneer yet. Have you seen anything in this area?
From:jatos Date: 02-18-19
From:David Date: 02-18-19
Yeah, Stef’s posts blow my mind. I didnt know what an OPM was and I see opportunity there. And at the same time have zero insight other than a google search which is nothing like she could could offer in terms of insight. I see some "MAJOR" industry experts have stopped offering training in the last couple years on this. Want to know if she can offer some free insights on if its the reason of killing comp or unprofitability.
From:jatos Date: 02-18-19
CJ and LS are both big on all kinds of upsells that they claim you need for "guidance", and yes, they basically amount to someone saying, "run more coupon codes, make bigger commissions, increase your cookie length". Basically, the employees I’ve dealt with at the bigger networks are much like *most* AMs at CPA networks – they have 5-19 solid talking points that are almost universally true, and they just repeat them over and over. It’s extremely rare to find an employee that will have any real insight into your company, and for that reason, I don’t really see them ever replacing a dedicated or outsourced program manager. Also, they’re CRAZY expensive for what they do. You really can’t just put a program up on a CPS network and expect the network’s employees to handle it for you.
I think the OPM stuff is still in its infancy, and very few firms do it well. I think the key to building a really good one is going to be in 2 things:
1. Building a database of affiliates
2. Offering quality free education to affiliates who opt into your instruction – I can’t say enough for how much this helps to get people active.
The problem is that VERY few OPMs are actual affiliates, and most of them couldn’t offer much instruction beyond the very basics. They don’t know the tricks, they don’t know different tools and trends, etc. They know the kind of fluff you pick up at conference sessions rather than the stuff you pick up from actually doing it. Granted, there are a couple exceptions – but there’s huge opportunity to go into this market and make a ton of money if you know what you’re talking about and you can learn how to "interface" with clients at a slightly more professional level than the average affiliate.
Also – a lot of OPMs aren’t very proactive at all. There’s very little competition, so people tend to get very comfortable working with physical products/CPS programs. They don’t have nearly as many fraud and quality issues as CPA programs, so once you build your affiliate base, you can pretty much sit back and do very little work IF you choose. It makes it easy for someone to steal your client, but it’s not like many people are out there trying.
As far as local affiliate programs are concerned, I definitely think that’s a tougher market and a MUCH bigger headache at this point in time – not to mention lower volume in most cases. I know of some people doing well as affiliates for local businesses (in fact, I’m going to out a site in an upcoming post and talk about their local lead gen income) – but there are a lot of obstacles to actually setting up local affiliate programs. As you said, the tracking is probably the biggest. QRs would work…but people really don’t use them much. I frequently consult with an agency that works directly with thousands of restaurants. They do offer QR codes, but the owner has told me repeatedly that people just don’t use them much at all – and I would believe it, based on what I’ve seen. I’ve known of local businesses that offered mobile and/or printable coupons with IDs on them depending on whose site generated them, but then you have to trust the local business, which can be iffy.
There’s a lot of opportunity there if someone wants to blaze the trail, but that’s an entirely different thing than just managing someone’s program
From:stefanie Date: 02-19-19
Thanks I think the training courses have failed for a few reasons…
-Most of them sucked
-Most of them were put out by lazy gurus (like Anik Singal’s course) and they didn’t put in the effort needed to keep the courses up-to-date
-Most of them failed to give people a reason to either subscribe or keep buying (tools, content updates, refresher courses, etc)
-The market for new AMs who need an actual training course is not as big as the markets for a lot of other affiliate training courses (which deters a lot of guru types from investing much in their courses)
The biggest reason, though, might just be that affiliates seem to have a strange aversion to consulting-related info products. David and I have talked about this a lot lately, because we were a little surprised when the consulting mastermind at ASW (and recordings) didn’t sell as many spots as we expected. We’re not entirely sure why, either, because consulting income is actually a lot easier and more stable than affiliate income in a lot of cases. No, you’re not going to make a million dollars in a month like you could with some affiliate offers, but how many affiliates EVER get to that point anyway?
One of the weird little secrets I’ve noticed with the affiliate industry is that almost everyone I know who really makes a lot of money and who’s been doing this for long also does some consulting work (or they own an offer/authority site/e-commerce site – or some combination). Very few people are actually JUST affiliates if they stay in this for very long.
The strangest part is that with a typical AM product/course, the success rate is not very high at all. Most of that’s due to people being lazy, but even if you’re working hard at it, it can take a while to succeed – and some people never will. With the recent consulting mastermind, we found that a sizable percentage of people (at least 1/3) were already talking to potential clients within a couple weeks. I suspect that OPM courses would have similarly high success rates IF they were decent courses. I part of the problem is just that a lot of people prefer the potential for millions over the much more certain (but still WELL above average) income. There are also a lot of affiliates who would make great OPMs, but they want to be much more profitable in AM before they branch out.
So…lots of reasons the courses might not be doing well. I don’t see any less opportunity, though. In fact, I think there’s a big upcoming opportunity with in-house programs under outsourced program managers, too…but it’s going to take a good programmer to build out a platform for it. For now, working with a CJ/LS/SAS type network is still much easier and more effective in most cases.
From:stefanie Date: 02-19-19
All easily discovered with a site:https://www.amclassroom.com/ search on Google
From:stefanie Date: 02-19-19
From:tracy shaffer Date: 02-19-19
From:jatos Date: 02-19-19
From:Corey Date: 02-25-19