20 affiliate program management mistakes to avoid

Affiliate Summit West 2010

20 Affiliate Program ManagementMistakes to Avoid

Evgenii “Geno” PrussakovFounder, AM Navigator

Introduction

You must learn from the mistakes of others. You can't possibly live long enough to make them all yourself.

-- Sam Levenson

Introduction

An error doesn't become a mistake until you refuse to correct it.

-- Orlando A. Battista

Outline

1. Merchant errors (10)

2. Affiliate program manager mistakes (10)

3. Checklist

Errors Committed by Merchants

Errors Committed by Merchants1. “Leaky” website

Leaks - DefinitionLeaks – external links within your website that lead to sites

which do not credit your affiliates for the work they perform.

Leaks - TypesLeaks – external links within your website that lead to sites

which do not credit your affiliates for the work they perform.

Types of Leaks:

1. Telephone number / Live chat2. AdSense units3. Amazon widgets4. Links to “network” stores/sites5. Affiliate links & links to other merchants

Leaks – Example (type 1)Telephone Number

Leaks – Example (type 1)Live Chat

Leaks – Example (type 2)AdSense (Google ads)

Leaks – Example (type 3)Amazon widgets

Leaks – Example (type 4)Links to “network” stores/sites

Leaks – Example (type 5)Affiliate links & links to other merchants

Errors Committed by Merchants1. “Leaky” website

2. “Autopilot” approach

Errors Committed by Merchants1. “Leaky” website

2. “Autopilot” approach

Autopilot – “device for automatically steering ships, aircraft, and spacecraft.”

Errors Committed by Merchants1. “Leaky” website

2. “Autopilot” approach

Such systems of directing vehicles without assistance from human beings are excellent when used in the contexts they were created for.

Affiliate marketing is not one of them!

Errors Committed by Merchants1. “Leaky” website2. “Autopilot” approach

3. Unclear/absent program TOS

Errors Committed by Merchants1. “Leaky” website2. “Autopilot” approach

3. Unclear/absent program TOS

Errors Committed by Merchants1. “Leaky” website2. “Autopilot” approach

3. Unclear/absent program TOS

Merchant naïvete -- loss of defensive behaviors and adaptations needed to deal with “predators”

Errors Committed by Merchants1. “Leaky” website2. “Autopilot” approach3. Unclear/absent program TOS

4. Inexistent PPC policy

Errors Committed by Merchants1. “Leaky” website2. “Autopilot” approach3. Unclear/absent program TOS

4. Inexistent PPC policy

Errors Committed by Merchants1. “Leaky” website2. “Autopilot” approach3. Unclear/absent program TOS4. Inexistent PPC policy

5. Embarrassing commission rates

Errors Committed by Merchants1. “Leaky” website2. “Autopilot” approach3. Unclear/absent program TOS4. Inexistent PPC policy5. Embarrassing commission rates

6. Short cookie life

Short Cookie Life5 hours or under

•Sephora.com (4 hrs)•Toys R Us, Babies R Us•eToys.com•Miles Kimball Company•ShopNBC.com

12-24 hours

•Nordstrom.com (12 hrs)•Enterprise.com (23 hrs)•Chase.com (23 hrs)•Amazon (24 hrs)

3 Days

•Apple iTunes•Champs Sports•Dell•ESPN Shop•Foot Locker•Walmart

Errors Committed by Merchants1. “Leaky” website2. “Autopilot” approach3. Unclear/absent program TOS4. Inexistent PPC policy5. Embarrassing commission rates

6. Short cookie life

Cookie Retention Data

• 1 day – 85%

• 2 days – 75%

• 3 days – 70%

• 4 days – 63%

• 45 days ~ 50%

• 340 days ~ 20%

Source: "Web Analytics Analyzed" blog by Paul Strupp at blogs.sun.com

Errors Committed by Merchants1. “Leaky” website2. “Autopilot” approach3. Unclear/absent program TOS4. Inexistent PPC policy5. Embarrassing commission rates6. Short cookie life

7. Commission drops

Errors Committed by Merchants1. “Leaky” website2. “Autopilot” approach3. Unclear/absent program TOS4. Inexistent PPC policy5. Embarrassing commission rates6. Short cookie life

7. Commission dropsAs a valued [Merchant Name] affiliate partner, I wanted to let you know that we are currently working to make our program, and our partnerships, as successful as possible. In order to continue to support the success of our current partnership we are unable to continue to offer you a flat 4% commission on all goods. Starting at the end of February, our new offer will be lowered to 1.5% on all goods.

Errors Committed by Merchants1. “Leaky” website2. “Autopilot” approach3. Unclear/absent program TOS4. Inexistent PPC policy5. Embarrassing commission rates6. Short cookie life

7. Commission dropsAs a valued [Merchant Name] affiliate partner, I wanted to let you know that we are currently working to make our program, and our partnerships, as successful as possible. In order to continue to support the success of our current partnership we are unable to continue to offer you a flat 4% commission on all goods. Starting at the end of February, our new offer will be lowered to 1.5% on all goods.

Commission Decrease

Commission Decrease

Errors Committed by Merchants1. “Leaky” website2. “Autopilot” approach3. Unclear/absent program TOS4. Inexistent PPC policy5. Embarrassing commission rates6. Short cookie life7. Commission drops

8. Unrealistic goals for commission increases

Errors Committed by Merchants1. “Leaky” website2. “Autopilot” approach3. Unclear/absent program TOS4. Inexistent PPC policy5. Embarrassing commission rates6. Short cookie life7. Commission drops

8. Unrealistic goals for commission increases

Swimmer (illustration)

Errors Committed by Merchants1. “Leaky” website2. “Autopilot” approach3. Unclear/absent program TOS4. Inexistent PPC policy5. Embarrassing commission rates6. Short cookie life7. Commission drops8. Unrealistic goals for commission increases

9. Tampering with tracking code

Errors Committed by Merchants1. “Leaky” website2. “Autopilot” approach3. Unclear/absent program TOS4. Inexistent PPC policy5. Embarrassing commission rates6. Short cookie life7. Commission drops8. Unrealistic goals for commission increases9. Tampering with tracking code

10. Late/inexistent notifications

Errors Committed by Merchants1. “Leaky” website2. “Autopilot” approach3. Unclear/absent program TOS4. Inexistent PPC policy5. Embarrassing commission rates6. Short cookie life7. Commission drops8. Unrealistic goals for commission increases9. Tampering with tracking code

10. Late/inexistent notificationsNotify affiliates at least one month in advance

Mistakes of Affiliate Managers

Mistakes of Affiliate Managers1. Believing they need to manage affiliates

Mistakes of Affiliate Managers1. Believing they need to manage affiliates

… when, in reality:

not affiliate managers

but affiliate program managers

Mistakes of Affiliate Managers1. Believing they need to manage affiliates

2. Assuming they are smarter than affiliates

Mistakes of Affiliate Managers1. Believing they need to manage affiliates

2. Assuming they are smarter than affiliates

Affiliate marketing is “the art of doing a merchant's marketing better than they can, and profiting from it.”

-- Chris Sanderson, AMWSO

Mistakes of Affiliate Managers1. Believing they need to manage affiliates2. Assuming they are smarter than affiliates

3. Assuming all affiliates are prone to fraud

Mistakes of Affiliate Managers1. Believing they need to manage affiliates2. Assuming they are smarter than affiliates

3. Assuming all affiliates are prone to fraud

ASSUME = + U + ME

Mistakes of Affiliate Managers1. Believing they need to manage affiliates2. Assuming they are smarter than affiliates

3. Assuming all affiliates are prone to fraudMerchant: I wanted to let you know that we strictly prohibit direct linking to our website from search engines. Please update any campaigns or otherwise we will not be able to continue working with you.

Mistakes of Affiliate Managers1. Believing they need to manage affiliates2. Assuming they are smarter than affiliates

3. Assuming all affiliates are prone to fraudMerchant: I wanted to let you know that we strictly prohibit direct linking to our website from search engines. Please update any campaigns or otherwise we will not be able to continue working with you.

Affiliate: We are not doing any direct linking to [your site].What makes you think we are?

Mistakes of Affiliate Managers1. Believing they need to manage affiliates2. Assuming they are smarter than affiliates

3. Assuming all affiliates are prone to fraudMerchant: I wanted to let you know that we strictly prohibit direct linking to our website from search engines. Please update any campaigns or otherwise we will not be able to continue working with you.

Affiliate: We are not doing any direct linking to [your site].What makes you think we are?

Merchant: Great! We didn’t. We just saw your sales pick up and wanted to ensure you knew our keyword policy.

Mistakes of Affiliate Managers1. Believing they need to manage affiliates2. Assuming they are smarter than affiliates3. Assuming all affiliates are prone to fraud

4. Treating affiliates a employees

Mistakes of Affiliate Managers1. Believing they need to manage affiliates2. Assuming they are smarter than affiliates3. Assuming all affiliates are prone to fraud

4. Treating affiliates a employeesMotivating affiliates by threat =

Mistakes of Affiliate Managers1. Believing they need to manage affiliates2. Assuming they are smarter than affiliates3. Assuming all affiliates are prone to fraud

4. Treating affiliates a employees

Motivating affiliates by threat = "dead-end strategy"

Even in traditional management “threats are generally counterproductive” and “always demotivating”

“We can motivate people to their highest levels of potential by presenting them with opportunities to succeed instead of telling them what to do”

-- Alexander HaimStreetwise Motivating & Rewarding Employees

Mistakes of Affiliate Managers1. Believing they need to manage affiliates2. Assuming they are smarter than affiliates3. Assuming all affiliates are prone to fraud

4. Treating affiliates a employeesAs you may know from previous experience, [Merchant Name] works each month to a set budget. While in the past, if they surpass that budget, we have been forced to remove partners. This is never ideal and we want to prevent this from happening as much as possible. As of right now, we are on track to surpass our February budget. To prevent this, we are asking you to take a 1% commission cut through the rest of the month.

We ask that you opt into the lower-commission offer immediately, or we will have to remove you from the program. This is only a short-term adjustment, so we thank you, in advance, for your cooperation and understanding.

Mistakes of Affiliate Managers1. Believing they need to manage affiliates2. Assuming they are smarter than affiliates3. Assuming all affiliates are prone to fraud4. Treating affiliates a employees

5. Treating all affiliates the same way

Mistakes of Affiliate Managers1. Believing they need to manage affiliates2. Assuming they are smarter than affiliates3. Assuming all affiliates are prone to fraud4. Treating affiliates a employees

5. Treating all affiliates the same wayContingency Approach

There is “no one universal solution… but the correct solution will depend on the unique needs of the situation”

-- Montana, P.J., Charnov, B.H.Management

Mistakes of Affiliate Managers1. Believing they need to manage affiliates2. Assuming they are smarter than affiliates3. Assuming all affiliates are prone to fraud4. Treating affiliates a employees

5. Treating all affiliates the same wayContingency Approach

Main situational variables: 1) affiliate maturity

2) task at hand

Contingency Approach (grid)

Mistakes of Affiliate Managers1. Believing they need to manage affiliates2. Assuming they are smarter than affiliates3. Assuming all affiliates are prone to fraud4. Treating affiliates a employees5. Treating all affiliates the same way

6. Believing money is the best incentive

Mistakes of Affiliate Managers1. Believing they need to manage affiliates2. Assuming they are smarter than affiliates3. Assuming all affiliates are prone to fraud4. Treating affiliates a employees5. Treating all affiliates the same way

6. Believing money is the best incentive…things that make people satisfied and motivated … are different in kind from the things that make them dissatisfied. …even if managed brilliantly [environmental factors] don’t motivate anybody to work much harder or smarter. People are motivated, instead, by interesting work, challenge and increasing responsibility. These intrinsic factors answer people’s deep-seated need for growth and achievement. [bold font mine]

-- Frederick Herzberg

Mistakes of Affiliate Managers1. Believing they need to manage affiliates2. Assuming they are smarter than affiliates3. Assuming all affiliates are prone to fraud4. Treating affiliates a employees5. Treating all affiliates the same way

6. Believing money is the best incentive“Compensation and incentive packages” are not motivating enough for people.

A manager “can charge a person’s battery, and then recharge it, and recharge it again,” but “it is only when one has a generator of one’s own that we can talk about motivation.” [bold font mine]

-- Frederick HerzbergOne More Time. How Do You Motivate Employees

Harvard Business Review, Jan. 2003

Mistakes of Affiliate Managers1. Believing they need to manage affiliates2. Assuming they are smarter than affiliates3. Assuming all affiliates are prone to fraud4. Treating affiliates a employees5. Treating all affiliates the same way6. Believing money is the best incentive

7. Losing personality

Mistakes of Affiliate Managers1. Believing they need to manage affiliates2. Assuming they are smarter than affiliates3. Assuming all affiliates are prone to fraud4. Treating affiliates a employees5. Treating all affiliates the same way6. Believing money is the best incentive

7. Losing personality

Mistakes of Affiliate Managers1. Believing they need to manage affiliates2. Assuming they are smarter than affiliates3. Assuming all affiliates are prone to fraud4. Treating affiliates a employees5. Treating all affiliates the same way6. Believing money is the best incentive7. Losing personality

8. Lack of communication

Mistakes of Affiliate Managers1. Believing they need to manage affiliates2. Assuming they are smarter than affiliates3. Assuming all affiliates are prone to fraud4. Treating affiliates a employees5. Treating all affiliates the same way6. Believing money is the best incentive7. Losing personality

8. Lack of communicationCommunicate regularly and on different levels

Channels of Communication

1. Email (42%: 38% mass e-mail, 4% personal msgs)2. Blog (17%) 3. Network internal email (17%)

Source: AffStat 2009

Frequency of Communication

1. Monthly (42%)2. Weekly (39%)3. Quarterly (11%)

Source: AffStat 2009

Mistakes of Affiliate Managers1. Believing they need to manage affiliates2. Assuming they are smarter than affiliates3. Assuming all affiliates are prone to fraud4. Treating affiliates a employees5. Treating all affiliates the same way6. Believing money is the best incentive7. Losing personality8. Lack of communication

9. Ignoring affiliate suggestions

Mistakes of Affiliate Managers1. Believing they need to manage affiliates2. Assuming they are smarter than affiliates3. Assuming all affiliates are prone to fraud4. Treating affiliates a employees5. Treating all affiliates the same way6. Believing money is the best incentive7. Losing personality8. Lack of communication

9. Ignoring affiliate suggestionsListening is not enough. Hear them and respond.

3 Rs to Remember

1. Reachable

2. Responsive

3. Real

Mistakes of Affiliate Managers1. Believing they need to manage affiliates2. Assuming they are smarter than affiliates3. Assuming all affiliates are prone to fraud4. Treating affiliates a employees5. Treating all affiliates the same way6. Believing money is the best incentive7. Losing personality8. Lack of communication9. Ignoring affiliate suggestions

10. Failing to admit mistakes

Mistakes of Affiliate Managers1. Believing they need to manage affiliates2. Assuming they are smarter than affiliates3. Assuming all affiliates are prone to fraud4. Treating affiliates a employees5. Treating all affiliates the same way6. Believing money is the best incentive7. Losing personality8. Lack of communication9. Ignoring affiliate suggestions

10. Failing to admit mistakes

Checklist

Top 20 Mistakes to Avoid:

Pick it up at www.amnavigator.com/ASW10.htm

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Thank You!

geno@amnavigator.comamnavigator.com/blog

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