Affiliate programs – Affiliate software
In my previous post, I tried to described who our partners or affiliates are, and I hope I was able to briefly explain how they operate. In this post I will attempt to shine some light on the technological aspects before we eventually cover marketing (that will be in the next post, which I promise will be long and full of surprises.)
A little about the system
In order to interact with our partners in an organized fashion, we must acquire or develop our own technological platform. It’s not as scary it sounds and it shouldn’t be too expensive either. A technological platform is a system that allows our partner (the affiliate) to carry out certain operations. It also serves as a crucial information pipeline between the partner and the Commercial entity. It is both a portal for information, and a functional backbone whose use I will describe shortly. So, what do we really need and why do we need it? Oh… just a quick note, each and every company that wants to have his/her own affiliate program MUST map all the needs and then and just then choose the right affiliate system (mapping the needs of the organization is most important , you don’t want to find your self with a system that doesn’t support your needs.
1. Monitoring traffic – Partners need to receive detailed information as soon as it becomes available about the volume of traffic they are getting from their site (usually these partners have a Webmaster who can provide their own reports, but these reports are generally only used as reference at the end of the month for financial reasons.) There are also those who do not use software to monitor traffic, so we need to show them how to use this information (we must be transparent as possible). This is important! I am only talking about specific traffic to their site, not all of their traffic. We must make these reports clear and readable and make sure they contain within them all the traffic data, such as: click rates, number of clicks, and conversions, etc. This is a richer report that will enable our partners to optimize and improve the way they promote us. It is important to mention that in most affiliate programs, the tracking is done by the tracker url (parameter in the url), but there are also other methods available.
2. Regular updates – The platform enables the transfer of information and updates from the commercial entity to the affiliate – for example: affiliates in a cosmetics company receive regular updates every time they login to view their traffic data. These companies are using this medium in order to update their partners. (Just like in a daily briefing where relevant information is delivered about company products, changes in prices, etc.) this ongoing channel of information serves as our “marketing stage” we can communicate what we need to our partners.
3. Gallery - Most online affiliate programs are filled with great marketing know-how, These affiliates use many different marketing tools in order to promote us, so we have to “equip” their marketing arsenal, with tools such as: banners of various sizes or styles, marketing material for mailings, information on operations and programs, articles, CD’s for offline distribution, etc. Our smart partners, those who “wear” the marketing hats, know that they can sell or promote our products better using our materials, therefore we should strive to create a varied gallery.
4. Tools – The primary tools vary from company to company and from industry to industry. There is a wide variety, from RSS ‘s to widgets, to calculators, and more. You can equip the partner/affiliate with these tools to help him/her while at the same time helping yourself.
5. Language support – International markets should be supported by offering different languages, localization is very important, speak the language of your customers.
6. Payment - Support for different means of payment such as PayPal, Neteller, e-passport, credit cards, bank transfers, checks, etc.
7. Finance module - Our partners are here for the money (they promote us and we are rewarded for it). Those with sites who want to promote their products aren’t in it for patriotic reasons, they are in it to make money. Therefore, we need to allow them access to financial data. There are of course many different variables that appear from company to company and product to product, but the bottom line is that this financial information creates a business dialogue. The financial dialog with our partners should be clear and accurate because it represents the money or salary of the partner/affiliate. At the end of each month, when the numbers are crunched, it’s imperative that the data makes sense (most companies today conduct their accounting processes through automation, since it is a very complex process with many partners. Sometimes the conditions are not parallel. One partner gets X while the other gets Y, therefore we have to be smart about how we track and manage these activitivities). This complex system must support all types of transactions. I’ll try to detail some of the most common methods of compensation in order to explain the principle:
CPA – Cost Per Acquisition – A fixed payment for the purchase of a customer. (Cost per acquisition/action)
Commission / Revenue share (%) - Percentage distribution of income
Bounty or Flat Rate – Fixed fee for a specified period of time (week, month etc.)
Hybrid deal – a combination of CPA and Commission/Revenue share
Scale CPA – Pay-per-action. For example, you sell 5 products and get $10 on each sale, you sell 10 products and get $15 per sale, etc.
Scale Rev Share – For example, you sell 5 products and get 10% on each sale, you sell 10 products and get 15% per sale, etc
There are many other methods for transactions involving more variety and creativity. Our system must be able to support all of it and display the accounting data automatically without being dragged into a Sisyphean task Those of us who have conducted affiliate programs know the feeling at the end of the month and how hectic and crazy it can get – so a good system is a must!
From personal experience, there are many systems that are offered for sale, such as off-the-shelf products that can be used almost instantly. Usually, two year licenses are necessary, specifically for ones that actually allow: access to the system, management, maintenance, and support services in the event of a problem or malfunction. Features and functionalities vary from one system to another, Here are some examples:
There are many more examples, however my personal opinion is that a company needs to define and map all the business needs before taking a system, the integration of a system that doesn’t fit would kill your business and cause your affiliates to lose trust in your system – the platform should fit like a glove! sometimes you would find that it is essential to develop a product in-house (it’s not always the case). The development can be expensive sometimes and it will require your company to have a development team/product manager to manage the process.
Next week I’ll try to dig a bit deeper and try to explain how we find partners. How do they find us? Also, I’ll cover how proper marketing with the right partners can make your product a success.