As a merchant, you have certain goals and priorities that are dictated by a pre-existing business model. These goals and priorities play a vital role in determining what counts towards affiliate marketing success. To that extent, your affiliate marketing approach should complement your pre-existing business model, and not dictate it.
When it comes to managing your affiliate program, then, it's important that you do so in a way that's in line with your over-arching business model. Some questions you should ask yourself, then, are:
- What is your retail philosophy?
- What are your priorities?
- Why did you choose affiliate marketing?
- What kind of affiliates are you looking to partner with?
Depending on how you answer these questions, chances are your philosophy of affiliate marketing fits into one of three general categories. Here's an overview of what those three different philosophies are.
Affiliate Philosophy 1: Hey Big Spender
You're a big spenders when you focus on working with so-called super affiliates. You want to maximize results fast, and focus on creating buzz around your affiliate program to do so. This might include elaborate booth set-ups at industry conferences such as Affiliate Summit, and sponsoring parties at these events.
If this is you, then you're prepared to spend significant funds to get top affiliates into your program, and might do so by offering affiliates high commissions, gifts, and other incentives.
| Pros | Can deliver quick, impressive results. | Conferences activities can create brand recognition and subsequently attract new affiliates. | Saves time by ignoring smaller affiliates. |
| Cons | High costs to maintain relationships. | Your program depends on just a few affiliates. | Expensive and risky to compete with other affiliate program for the same super-affiliates. |
Affiliate Philosophy 2: Relationship Focus
This is your approach when you have the long-term optimization of your program in mind. You'll focus on ensuring that affiliates have the tools and resources they need to promote your products effectively, and become better affiliates over time.
Through your program, you will also reach out to affiliates to offer support and tips, as well as a variety of marketing tools, such as banners and widgets.
Part of a relationship-focus is also a measured approach, where trial periods are used to evaluate affiliate performance, and high performers are rewarded with better commissions. This requires more advance affiliate tracking software and account management, but such software also helps maintain the faith that affiliates have in the program.
| Pros | Relationship building makes it easier to penetrate the affiliate community. | Better intelligence on which promotions work and why. | More program stability because of a wider affiliate-base. |
| Cons | Results can be gradual. | Managing affiliate relationships can be time consuming. | Some affiliates may leave just as they become effective. |
Affiliate Philosophy 3: A Necessary Evil
This is when you see affiliate marketing as just another sales tactic (rather than a marketing strategy), and you decide to launch a program because your competitors have done so -- hence, a necessary evil. You're not going to invest much in the relationship with your affiliates, and you consider them little more than freelance salespeople.
The result is that your program will have a simpler commission structures for all affiliates, and your affiliate tracking software will be basic.
| Pros | Lower overhead. | Require little to no time to manage. |
| Cons | Difficult to build a presence in the community. | Hard to attract super-affiliates. |
The Gist of Affiliate Management
Affiliate marketing can be a very cost effective way to drive online sales. The only catch is there are a lot of different products and services that can be sold online.
The nature of the online market that you compete in is going to influence much of your business model and, consequently, your online marketing philosophy.
The way you structure your affiliate program, then, should reflect that philosophy. If it doesn't, you're probably going to experience inefficiencies at the organizational level because you'll constantly be struggling to fit a square peg into a round hole.
- Affiliate Management: Six Steps to Success
- Affiliate Management Philosophy
- Discussing Transparency in Tracking Software at the Affiliate Summit—Part III
- Relationship Based Affiliate Marketing
- Choosing an Affiliate Marketing Partner
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Just wanted add my two cents about my favorite management philosophy. I absolutely fall under #2 (relationship focus). In the long run, I believe that you continue to get better results with less work, as you continue to train affiliates under you. This is also a great way to build residual income after you are done promoting a product but some affiliates under you continue to do so…
Interesting post. In the “Relationship Focus” philosophy, you mention as a con that some affiliates may leave just as they become effective. Why do you think this is the case? I would expect that the trust and commitment of a relationship-driven approach would actually reduce attrition.
@Jeff, perhaps I should’ve been more clear that this is a rare risk — i.e. there’s the odd affiliate that you might train from scratch and then move on to other niches. But for the most part, our own experience has been that “trust and commitment of a relationship-driven approach [does] reduce attrition.”
This is why at Share Results, we take this approach ourselves. Many of the affiliates that started out with us have remained very loyal. Even if they begin promoting in other niches, they continue to promote programs with us, as well. So the relationship approach does tend to be an all around win.
Great site. A lot of useful information here. I’m sending it to some friends!
I try affiliate marketing to some extent. And I love affiliate managers who are intimate and try their best to help out affiliates. I have two of those managers. Its a win win situation for bother the manager and the affiliate to build strong/close relation. I’m a witness to that.