Are you ready for affiliate marketing?


Do you have a business running and want more customers? Affiliates might be a good answer, as long as you take certain precautions. Here I will describe 3 lessons and important notes from the merchant/startup perspective.

But first things first..

Affiliate marketing, like the name indicates, comes from a relationship between your business and those that affiliate to it. Think of it as people you are hiring to drive potential buyers to your shop using their own marketing efforts. The catch is..normally you will only pay them once they come and register (lead), or even only if you actually sell them something (sale). Sounds good? keep reading.

To make this interesting/trackable for affiliates it is normal to give them certain promotions (promocodes/voucher codes) that they can offer to their customer base. Think GroupOn, Wowchers, Myvouchercodes, Living Social, Wahanda, etc...

The Top 3 Lessons to get ready

  • Direct sales cannibalization - If current customers become aware of a promotion throught an affiliate they will either:
    • Become angry because new customers are getting better treatment than loyal customers.
    • Go to the affiliate website and try getting the voucher for themselves.

Lesson 1:

Provide a similar promotion to your current customers that you are giving to your affiliates. Or make sure this promotion is only valid for new customers.

  • Direct linking/brand bidding - In case you don't specify an affiliate will use anything at his disposal to drive sales/leads. Normally the best performing paid marketing campaigns are based on brand keywords so unless stated otherwise an experienced affiliate might start bidding on your brand and linking to yoursite directly using their affiliate id, eroding customers that were already aware of your brand.

Lesson 2

Make sure you disallow direct linking and brand bidding with misspells/plurals (unless you have a good reason to allow it). In case they use paid search make sure adding your brand as a negative is a requirement.

  • Profit Margin - Sometimes small businesses aren't completely aware of 1) their profit margins per service/product pr 2) their customer's life time value. This makes merchant's giveaway too good to be true promotions (assuming the customer will return once the affiliate scheme ends and pay for itself), giveaway more promocodes/vouchers that they can handle.

Lesson 3

Know your business before you engage in discounts and promotions. Never assume a customer's return is guaranteed (unless you have a subscription model). Do affiliates marketing during periods of time and evaluate its impact.

Also worthy of note:

  • Subaffiliate networks - Partners in affiliate networks might eventually see arbitraging opportunities between two affiliate networks. In case they register in a subaffiliate network with a worst deal than they have with you, this might cause some confusion to the advertisers/publishers in the future and jeopardize your growth strategy.

  • Email/Spyware/adware/browser plugins/extensions - SPAM is always annoying and can harm brands/businesses. Make sure that you specify regulation about SPAM and how can your affiliate links/brand can/can't be used by your partners.

  • Cookie stuffing / Content interaction - Fraudulent publishers might try to insert cookies in your computer. This might be done in the background or throught content interaction. This practice is ilegal since it might identify them as a source of lead/sale incorrectly replacing any previous affiliates/sources.

Read more about Affiliate Marketing regulation on the Internet Advertising Bureau's Policy Page.

Biggest affiliates/affiliates networks

After reading up on the points above you should be more aware of the things that you need to be careful with. You might now want to start exploring which are the affiliates or affiliate networks with the best partners/customers for your business. Be aware that you will get different deals depending on your size, brand, product/services and industry. It's normal to pay a setup fee and minimum monthly fee, but there are affiliates and networks that try lower the entry barrier by having £0 setup fee, but 12/24 months contract with minimum spends.

Affiliates:

  • GroupOn - Local Deals, Goods and Getaways.
  • Living Social - Deals on the best things to do locally, including restaurants, spas, travel, and others.
  • MyVoucherCodes - UK focused Website and mobile app for vouchers, deals, discounts and offers.
  • VoucherCodes - Generic UK focused deals.
  • WowCher - Local services, shopping and travel.
  • Wahanda - Salons and Spas.

Networks:

You might also want to read:

  1. Internet Advertising Bureau Affiliate Marketing Policy
  2. Which one is the most popular daily deals site?
  3. Cookie Stuffing