Choosing an Affiliate Program

By Kevin Sinclair, CPA
Friday, November 7, 2003; 2:30pm EST

What should you consider when choosing an affiliate program? You need to think about two key things: what business are you in and what can the affiliate program provide to your customers.

No matter what business you are in, the largest investment you make will be customer acquisition. If you have your own product, and have acquired a base of satisfied customers, then single product affiliate programs could work very well for you.

However, if your business is acquiring customers for other businesses, that is, purely affiliate programs, then a better choice for you could be affiliate programs with multiple products or services. This will help you to capitalize on your investment in customer acquisition.

The key to choosing successfully is to ensure that the affiliate program offers products that meet the needs of your potential customers. Coupled with this is the need for the products to be high quality and for the supplier to provide excellent customer service. Remember, your credibility is on the line every time you refer someone to buy through your affiliate relationship.

Some of the other factors I consider when evaluating affiliate programs include:

• Is the affiliate program a reputable business? You can check out a business you are considering a relationship with in variety of ways. Talk to the Better Business Bureau in your local area or a similar body. In addition, I find web sites that monitor affiliate programs to be worth looking at. The best I have found is Associate Programs http://www.AssociatePrograms.com. Allan Gardyne pulls no punches and tells it as it is.

• Does the program enable you to share in the lifetime value of the customer? Great programs will give you commissions on all future purchases of the customers you introduce. This is where the real profits are. These types of programs, in effect, allow you to partner with the supplier.

• Does the program reward you for introducing other affiliates? This type of program is commonly referred to as a two-tier program. Often your customer may become an affiliate also and you will be rewarded for this.

• Is the supplier interested in your success as an affiliate? The top affiliate programs engage in a process of coaching or information sharing to help you succeed. Affiliates are provided with regular newsletters outlining what is working for successful affiliates and providing updates and details on new products.

• Is the commission reasonable? Commission rates on commodity products such as books and CDs are low. This is because there is very little margin in the products due to competition. Look for products that have a commission rate of 15% or more that are not commodities - that way you will be better able to recoup your customer acquisition investment.

• Are statistics provided? The higher the level of statistics provided, the better off you are. This will enable you to measure the success of your marketing efforts and to determine the best places to invest your marketing dollars. Insufficient statistics is a sign that the affiliate program is not sufficiently interested in your success.

• Are new products being developed regularly? To get the full value from lifetime commissions, new products need to be introduced on a regular basis. Without this, lifetime commissions can be worthless. Also, look for consistent high quality in new products introduced.

• How frequently are commissions paid? The more frequently commissions are paid, the better off you are. Good quality affiliate programs will pay you monthly. In some situations, commissions are not paid until a certain level is reached. If the program you are considering has this requirement, check how many sales need to be made before the level is reached.

• Have you read the affiliate agreement? This is a key area that you should look at. Some affiliate agreements are totally in favour of the supplier. Others are more balanced. Some agreements restrict your ability to promote similar products from other suppliers. Most agreements have anti-spam provisions. Look for agreements that are fair and that do not stack everything against you as the affiliate.

While there are other factors that can be considered when choosing an affiliate program, following the suggestions above will help you to make superior business choices that will lead to long-term success.

Source of Article
Article by Kevin Sinclair, CPA, of Be Successful! Business & Personal Success Resources (http://www.ksinclair.com/). He is the author of 2 free ebooks: "Success Secrets" & "How To Choose A Home Based Business". Kevin is also the publisher of "Be Successful News" - a free ezine dedicated to your online business success - to subscribe, visit http://www.ksinclair.com/pbs_news.htm.