Don't I Know You?

Affiliates can be your best friends--that is, if you treat them right.

An affiliate program is truly performance marketing. Sit back and let other companies market your products or services. Then pay them a commission on sales they generate--no cash upfront, and no paying for marketing that doesn't work. But before you sign up a bunch of affiliates to drive sales through your Web site, create a strategy. After all, your affiliates should complement your marketing efforts, not compete with them.

The first rule is simple: Don't fish in the same pond. Affiliates provide value by reaching untapped markets. For example, a company with an e-zine may make a good affiliate because its subscribers are hungry for resources. So introducing your offer through a "trusted" company can grab the attention of prospects you might not have otherwise reached.

What marketing efforts should be off-limits to affiliates? That's easy--any channel you are using, such as search engines, content sites or e-mail lists. The typical affiliate commission fee of 10 to 50 percent per lead or per sale is a nice profit in your pocket. So don't compete with affiliates for the same sales. Put marketing restrictions into your affiliate agreement and notify partners immediately. Hey, it's your program. You set the rules. Feel free to let your affiliates run the majority of your Internet marketing if you prefer. The savvy ones know how to work the Net for maximum sales.

Once you have protected your prospecting pool, maximize your affiliate program by working with the best and leaving the rest. "Most marketers know that 80 percent of their revenues come from 20 percent of their customer base," says Allan Gardyne, CEO of AssociatePrograms.com, an online directory of affiliate programs. "However, 2 to 5 percent of affiliates will make nearly all of your affiliate sales." Because it can be time-consuming to manage a larger affiliate network, consider selecting only a few companies initially. Interview them. Affiliates are an extension of your sales force and represent your brand on the Net, so choose partners carefully.

Of course, you may think "What about Amazon.com?" True, Amazon.com has more than 600,000 affiliates, and there's no doubt they have helped drive sales and the online brand. But businesses with limited time should focus on strong strategic partners. A few key affiliates can be all it takes to boost your bottom line.

Finally, consider extra revenue. Think about your customers' needs: What other products or services would interest your site visitors? Join those affiliate programs. If you offer a monthly wine e-zine, for example, consider partnering with a winery for a piece of the online action. For more ideas, visit AssociatePrograms.com.

Affiliate programs can increase your sales with no upfront cost to you. Plus, joining an affiliate program can create an additional revenue source. It just takes a little time to plan your strategy and select the partners that will have the greatest impact on your business.

Speaker and freelance writer Catherine Sedaowns an internet marketing agency and is author of Search Engine Advertising.

Affiliate Marketing Strategies

Get more wins--and more sales--from your affiliate program by stacking your roster with internet-marketing pros.

Want to pay a marketing team only for results? Then get an affiliate program in place, and invite internet-savvy marketers to promote your business for no upfront cost. To launch a successful program, plan your strategy based on these questions:

1. What do you want your affiliates to do? First, decide if you'll pay affiliates per click, lead or sale. Then, discuss their role in your overall marketing strategy. Experienced affiliates will use e-mail, search engines, content sites and possibly offline opportunities to promote your business. Do you want this sales force to dominate all marketing channels for you, or will you set restrictions to prevent same-channel competition?

2. Is your compensation offer competitive? To find out, check out competing offers on resource sites such as AffiliatesDirectory.com. You can also sign up as a network affiliate to review offers in that community.

3. How will you help affiliates make more money? Yup, that's right--put your affiliates first, because by igniting their success, you'll be fueling yours. Create various ads and persuasive copy blocks they can use. And consider writing a newsletter with new-offer announcements, marketing tips and performance contests to help them perform even better

You'll also need an affiliate management solution, which includes tracking link assignment and performance reporting. You can save money by using an e-commerce solution that includes a basic affiliate management tool; the higher-end versions of 1ShoppingCart.com and Yahoo! Small Business Merchant Solutionsare examples. Keep in mind that if you buy or lease tools, then you usually need to find and woo your own affiliates.

Although you'll need to pay to join networks such as My Affiliate Program, Commission Junctionand LinkShare, you'll immediately tap into thousands of eager affiliates and robust tools to help you optimize your program.

Speaker and freelance writer Catherine Sedaowns an internet marketing agency and is author of Search Engine Advertising.

Affiliate Marketing

Definition: A way for a company to sell its products by signing up individuals or companies ("affiliates") who market the company's products for a commission 

There are two ways to approach affiliate marketing: You can offer an affiliate program to others or you can sign up to be another business's affiliate. As the business driving an affiliate program, you'll pay your affiliates a commission fee for every lead or sale they drive to your website. Your main goal should be to find affiliates who'll reach untapped markets. For example, a company with an e-zine may make a good affiliate because its subscribers are hungry for resources. So introducing your offer through a "trusted" company can grab the attention of prospects you might not have otherwise reached.

You should also make sure you aren't competing with your own affiliates for eyeballs. Any marketing channels you're using, such as search engines, content sites or e-mail lists, should be off limits to your affiliates. Put marketing restrictions into your affiliate agreement and notify partners immediately. It's your program--you set the rules. Or, if you prefer, you can let your affiliates run the majority of your internet marketing.

Once you've protected your prospecting pool, maximize your affiliate program by working with the best and leaving the rest. As the old 80/20 adage implies, most of your revenue will come from a very small percentage of your affiliates. Because it can be time-consuming to manage a larger affiliate network, consider selecting only a few companies initially, and interview them before signing them on. Affiliates are an extension of your sales force and represent your online brand, so choose partners carefully.

 And what about joining another company's affiliate program? It's all about extra revenue. Think about your customers' needs: What other products or services would interest your site visitors? Join those affiliate programs. Affiliate programs can increase your sales with no upfront cost to you. It just takes a little time to plan your strategy and select the partners that will have the greatest impact on your business.