Some tips on running an affiliate program (The sniper vs. the shot gun).

When you run an affiliate program whether through a 3rd party affiliate marketplace, or with a self branded program, you will undoubtedly run into the problem of trying to figure out which sites to allow into your program. Putting active affiliate recruiting aside, there are two common approach methods to accepting affiliates. First, the shot gun approach (Let every or almost every applicant into your program) and second, the Sniper approach (Let only high quality, select affiliates into your program).

Initially many website owners will go with the shot gun approach because they can get a lot of affiliates promoting their business, and the idea, if you get enough traffic someone will eventually buy something, generally works. It’s easy, doesn’t require a huge commitment of time, and theoretically runs itself.

The sniper approach, which I prefer, allows you to closely monitor and cater to each individual affiliate, and when affiliates are given good support and all of the tools they need to succeed, the results can be amazing. This type of program requires constant attention and thorough investigation of affiliates that want into your program.

Despite all of the hype of how much an affiliate program can do for an e-business, they fail the majority of the time. Affiliate programs are very difficult to make successful no matter what approach is taken.

Why the shotgun method often ends miserably:
When you let everyone into your program, you are going to be at some point letting people into your program that want to rip you off. Especially in click or lead based affiliate programs, it is extremely easy for an affiliate to click on their own banner, or fill out a form themselves. This may not seem like a huge problem, but once you start getting 50 affiliates making fake transactions, the ability to control the situation becomes impossible. What started out as an easier approach to affiliate marketing, just became much more expensive and far more time consuming. When programs enter this state where lots of affiliates are scamming the owner, they will most likely destroy themselves. The affiliate owner can’t find value in keeping the program going because they aren’t getting a positive return on their affiliate spending, and eventually they scrap the program. These programs can be successful, but fraud to any degree must be dealt with swiftly.

Why the sniper approach also often ends miserably:
While the sniper approach usually has the best long-term outlook, it is very difficult to get off the ground, and keep in the air. Finding high quality sites to join and promote your program, is very difficult. For every ten decent sites that join your program, only one or two will ever send you anything, and probably only one of fifty will ever be a really good affiliate. You will also need to actively seek out potential affiliates for your program, as passive promotion will rarely produce good results. Find related but non-competing sites and market your program to them.

Whatever approach you take to your affiliate program, treat it like another product, and market it like another product. “If you build it, they will come”, doesn’t apply anymore to an affiliate program than to a website.

My rules for protecting your program:

  1. Don’t start an affiliate program if you don’t have time to manage it. If you can’t allocate at least an hour a day to running your affiliate program, you shouldn’t even start it in the first place. With the exception of outsourcing your affiliate program, it will cost you more than you will get back from it.
  2. Use a 3rd party affiliate management platform. Affiliates generally have a lot more trust in a 3rd party managed program. The most trusted, but most expensive, program is commission junction, while shareasale, clickbank, and linkshare are a few other popular platforms. 3rd party platforms help maintain honesty between affiliates and program owners, and provide an existing base of affiliates for your program. Unless you have a very strong brand, a program on a 3rd party platform will be beneficial.
  3. Don’t be afraid to reject an application. You pay to have an affiliate program, you pay people to put up your links, you are the only entity that takes any risk in setting up a program. You have every right to deny, deny, deny. If the site looks spammy, if they aren’t related to your industry, if you just get a bad vibe, deny them.
  4. Automatically decline all mega-mall, and shopping directory sites. No offense to any of these site owners, but these affiliates are almost always the ones who commit affiliate fraud. Anyone that has been marketing online for a while, knows that unless a site is offering something vastly unique and special, the site is essentially worthless.
  5. Deny unrelated affiliate websites. If you affiliate program is a pay per sale program for car parts, it’s unlikely that a website offering jewelry is going to provide any valuable visitors to you. Even if they get 50,000 visitors per day, those visitors are most likely not looking for car parts and therefore are not valuable to you. Adding affiliates that have little chance of ever sending relevant traffic will only junk up your program, and make it harder to manage.
  6. Closely monitor transactions from new affiliates. Affiliates that are gaming your program will usually send a few real transaction through and then slowly send fake ones. Once you have a program for a while it gets easy to spot a bad affiliate. If your best affiliates send ten transactions a month, and a new one sends ten in the first day, there’s a good chance they’re up to something. Also, monitor things like exactly what website the transaction originated from, the IP address of the transaction, etc.
  7. Go out of your way to support very good affiliates. A few really good affiliates can single handedly make an online business successful. If you start seeing a few affiliates performing ahead of the pack, contact them and see what you can do to help them out. Raise their commission if necessarily (Do this before they ask for it), and just do everything you can to help them out. In the end, they will reward you for it.
  8. Track everything. This goes without saying, if you aren’t tracking your conversions, then you don’t know if your marketing is worth it.

You should also not be overly protective. You do still want people to be interested in your program. Your goal is to prevent the bad ones from ever joining, and help the good ones promote your program.

Bad affiliates poison an affiliate program for good affiliates, so keeping them out is in the best interest of you and your good affiliates. When you can put more time into helping your good affiliates, the results can be great, and both you and your affiliates benefit from each-other.

Some good affiliate marketing blogs:

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  1. […] very solid post on setting up affiliate programs, from The Ecommerce […]

  2. richard 19 Feb, 2009

    thanks for sharing. i am now trying to develop my own affiliate program.

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