Just like everything else in life, finding a place to start is often the hardest part! In this section, we will outline five key considerations and decisions that need careful planning in order to get your program off to the best possible start.
You will need to consider the following five strategies before you start an Affiliate Program:
- A Creative Inventory
- A Recruitment Strategy
- A Compliance Strategy
- An Affiliate Manager
- A Budget Consideration
Part 4: An Affiliate Manager
As with any endeavor, likely the most important decision made revolves around what personnel will be charged with recruiting for, managing, and growing your Affiliate Program. This chapter will revolve around 3 key strategies:
- Running a program in-house
- Hiring an agency our outside firm
- Utilizing your Affiliate Network or technology partner’s services team.
This decision is highly personal and will involve a lot of elements specific to your situation, such as budget and time. However, to get you started, I am going to lay out the pros and cons of each different approach.
Running a Program In-House
This involves hiring, or using existing resources within your company to run your program. In my opinion, this is the preferred method of management IF your company has the resources available.
Nobody knows your brand like you do! You know who your customers are, what data points are important, and what your goals are with regards to program growth. An outsourced firm can be successful in executing strategies for you, but when it comes to doing exactly what your company feels is right in each situation – an in-house manager is my preferred choice.
AFFILIATES LIKE IT:
Affiliates love being able to talk to the brand directly. They want to deliver value directly to you, brainstorm ideas with you and get answers from the you – from the brand.
It could hurt your program if you don’t have someone in-house that you feel will be a long term employee. When the individual leaves, they take with them a large portion of the knowledge necessary to run the program. It’s important to motivate your affiliate manager properly. Make sure that your compensation plan adequately matches the opportunities out there.
HOURS AND TIME COMMITMENT:
Affiliate management is a full time job, not one that can be piled on to an existing marketing position or lower level employee.
The mistake I see most often is the placement of a marketing individual into the position of Affiliate Manager. While this may seem, on the surface, to be the right approach – remember that Affiliate Marketing has several technical pieces that are necessary to be successful. An individual must be able to understand technology, if not fully able to utilize each piece. For example, PHP code, APIs, Datafeeds are all technical areas and critical to understand. Finding a good mix between Marketing and Technology is essential.
Finding a good mix between Marketing and Technology is essential.
Management by an Outsourced Program Manager or Agency
This involves hiring an outside agency, and tasking them with the management and growth of your Affiliate Program.
Often times, OPMs have a great deal of experience dealing with individual Affiliates and can steer you in the right direction with regards to who to work with and what it takes to maximize that relationship. That can be a huge timesaver and accelerate the growth of your program.
While it may be difficult to find the right in-house person with the above mentioned necessary marketing and technical skills, most OPMS will have a team in place to handle those details.
Often, this can be a less expensive route to go as you don’t need to worry about in-house concerns such as salaries, bonuses, 401k plans, health insurance, etc…
If you don’t have someone in-house that can do Affiliate Management full-time, utilizing an OPM should be your #1 choice. They will be able to focus solely on the growth of your program. Your odds of success will greatly go up as compared to having someone in your company doing the job part-time or in combination with another role at the company.
FOCUS ON MANAGEMENT NOT GROWTH:
OPMs can tend to fall into the day-to-day management tasks such as doing approvals, newsletters, etc… and fail at their #1 job which is growing your program. Make sure to specifically task your OPM with clear cut goals for growth and recruitment. If they cannot match up to your recruitment expectations, make sure to have that conversation with them early in the game.
If you don’t have someone in-house that can do Affiliate Management full-time, utilizing an OPM should be your #1 choice.
Management by a Network or Technology Partner
In my opinion, this is the worst of the 3 choices. It involves giving full control of the Affiliate Program, including the decisions as to who is a valuable partner – to the same person in charge of tracking and payment of commission. This constitutes a significant conflict of interest, in my opinion, which is shared amongst many in the industry. As pointed out in the following recommended read, it is like having the same real-estate broker represent both the buyer and the seller in a single transaction.
Why Network-Based Affiliate Management Is a Conflict of Interest
I’ve recently led several panels at industry conferences where I posed the question of whether there is an inherent conflict of interest with network-based affiliate program management. The result is usually a healthy dose of cognitive dissonance from those who…
Using this method, you put all of your eggs in one basket – while that has its own negatives, it can be a positive if you truly want to outsource the entire channel to another company and charge them with the goals that you have.
Network management is often completed by lower level employees with comparably little experience to an OPM, and can often be in charge of a great number of programs at the same time.
CONFLICT OF INTEREST:
Networks are paid on the performance of the program, and will often put those Affiliates into your program because it maximizes the revenue gained – without addressing concerns of value, brand protection, and other key elements.
Mario Corella saysApril 8, 2015 at 12:07 pm
I believe I’m starting to get the idea on what I been doing wrong. I thought get a website have written blogs on it,get traffic, have a bunch of Merchants on it. advertise on Facebook, Google , Twitter, and so on. Make lots of money, set everything on auto pilot, and enjoy life. Far from it, six months into it. I have seen very poor results. Of coarse trying to do it all by myself with minimum help.
Mario Corella saysApril 8, 2015 at 12:27 pm
I guess the Budget Consideration is no longer available. After reading the other four. I get the point.
Thank You Brian.. These four lessons are very helpful. I hope that I can put all four lessons to good use. I guess my wife is wright I don’t know what I’m doing. I’m not giving up.
I’d like you to know that I been a BEARS Fan for 35 years. Just being funny!
Thanks Again I appreciate everything I have read and made a copy of it, so that .I can go back and refresh.