Getting Rich from Affiliate Programs (Step-By-Step Guide To Building A Profitable Niche Marketing Business - Part 13 of 27)

Affiliate programs (also called Referral Programs or Partnership Programs) are essentially commission-based sales schemes. You recommend a site to your users and pick up a percentage of any sales those users generate. You benefit from the commission and the site benefits from sales it wouldn’t otherwise have made. If you’ve ever gone to a website and seen links to Amazon, those were affiliate links.

You can run an affiliate program from a site you’ve already set up, or create a site specially to promote a product or service. As long as it brings in more cash than you spend on building it and buying traffic, you’re laughing.

Affiliate ads work two ways: you can join them to make money, or you can run one to attract users.

Joining An Affiliate Program

As with any marketing venture, you need to be careful in the selection of an affiliate program. The benefit of an affiliate program is that it gives you another way to make money from your users. Instead of selling them a product yourself, you send them to a partner and take a cut.

On the downside though, your affiliate ads will take the place of a different ad that you could have put in that same spot. You have to make sure that each advertising position on your site is bringing in the maximum revenue possible. If you’re not getting the most from your site, you’re tossing money away.

The key to success is to choose the right program, right from the beginning.

Now, a lot of commercial sites run affiliate programs. That’s because they know that they only have to pay a commission if a sale is actually made; it’s a proven way to generate revenue without risk. What that means for you is that when it comes to choosing an affiliate program, you’re going to have a huge range to choose from. What it all boils down to though is product and price.

While it might be tempting to go for the program that pays the highest commissions, the program won’t pay you a penny if your users won’t go there or won’t buy once they get there. You have to be certain that the service you’re promoting is of genuine interest to the kind of users you buy, whether you’re buying them from search engines or anywhere else.

Sure, you can work backwards: You find a high-paying affiliate program and create a small site to send users to it, but do you know where to buy users for a program like that? You’re going to have to research the field, check out the most popular sites, and negotiate banner campaigns and link exchanges.

That’s fine if you want to invest the time and the effort. But it’s much easier to find an affiliate program operating in a field you’re familiar with, and use that program to earn extra cash.

For example, suppose you had set up a dating site. You might make bit of money selling subscriptions, but you might make even more by joining Match.com’s affiliate program and selling them your users. Unless you’re planning to be the Internet’s biggest dating site, you’re not going to be able to compete directly and beat them, but you can join them—and earn money.

Or rather than sell your users directly to a ‘competitor’, you can look for services that complement your own. Visitors to your dating site, for example, might be interested in buying flowers, books on relationships or tickets on singles cruises. Instead of selling just one product—membership subscriptions—you’d be selling a whole range of different goods to the same people, and increasing the sources of your income.

Here are some tips to selecting an affiliate program that is lucrative and right for you:

• Don’t accept less than 25% commission. You can find affiliate programs with great payment structures and high percentages of the purchase price in just about every field.
• Look for comprehensive statistics pages that list the number of click-throughs, sales and earnings so you can see how you’re doing. The information should be broken down by month.
• Look for programs that offer a wide variety of promotional tools to put on your Web page, including text links, banners and graphics.
• Find out how often you will be paid and make sure that the payment schedule meets your expectations. Some programs pay monthly, others quarterly; which is best for you?
• Look for examples of marketing methods that successful affiliates are using to get the best results.
• Make sure that top level support is given. If they can’t answer your questions promptly and intelligently, you don’t want to work with them.

Setting up Your Own Affiliate Program

Joining an affiliate program is a neat way to make money from your users. But just as you can join someone else’s affiliate program, so you can set up your own program and invite webmasters to sign up.

What would that bring you? The same as you’re bringing your affiliate partners: deals. Every time someone sends you a user who gives you money, you give a portion of that money to your affiliate. It’s an easy way to generate traffic and earn cash.

And you don’t need to be a programming genius to set up an affiliate program. There are a whole bunch of companies out there that offer entire affiliate kits right off the shelf.

Ultimate Affiliate lets you run a fully featured affiliate program from your website. It integrates with virtually every payment method, awards down-line commissions, and can handle high-traffic websites. You can edit the sign-up form to match the "look and feel” of your site as well as delete some of the optional fields. The administration area allows you to edit affiliates and commissions, create printable reports of money due, export the data to a text file, view the traffic through your affiliate program, and much more. Your affiliates can log in at any time and see their traffic and commission statistics as well as change their information and get links and banner code.

Once the program is set up you'll only need to log in once a month to print out a list of the affiliates, their addresses, and the money owed. You can do this quarterly if you wish. You can export the payments owed to a text file in PayPal's "mass pay" format and then just upload it to your PayPal account to pay everyone automatically. Or, you can simply write your own checks. If you have to pay a lot of commissions, there is a check printing service called qchex.com. Upload the file and they’ll print and mail your checks for a fee of about 80 cents each.

Alternatively, Locked Area Pro is an advanced member's area management system offering very good security that’s easy to maintain. The system provides a huge list of useful features including automated sign-up, user account validation, optional random password generation and an administration approve/decline account feature. It also comes with an extremely powerful control panel with an online administration of users, backup, and full customization facilities from the browser. A statistics system is also in built in. What more could you want?

Cooking off the Spam

Any time you run a program where your affiliates rely on other signups to generate profits, you will eventually have a problem with spam. One of your affiliates will inevitably get it into their head to blitz the Web with unwanted garbage.

When this happens you need to be ready to take action—otherwise it will cost you! Your Internet company can boot you off your server and you can find yourself blacklisted. Not good for business. If you get an email from someone claiming they received spam with your URL, then take it as an early warning. I am not advising you to immediately terminate the affiliate’s account, but be sure to contact them to follow up on the complaint. Let your affiliate know you received a complaint and advise them to remove this person from their list.

If you only get one or two complaints, it’s probably not spam—the complainants might simply have signed up for an email list and forgotten all about it. You will know when one of your affiliates is spamming, because you will get anywhere from 10 to 100 complaints in the same day all regarding the same URL. The best thing to do in this case is to immediately terminate or disable the account of the affiliate URL that was spammed.

Managing and tracking your affiliate programs

The key to any business is to promote your products and services to people who need them. Your affiliate business is no different. In order to earn commissions you must put your products in front of the people who need them. The beauty of marketing affiliate programs is that it is anybody’s ball game. This is the one place you can burrow deep into your own niche and stick it to the so-called 'big wigs'.

You may create your own affiliate program or you may promote other popular affiliate programs that are related to your product or service. The best way to manage and track affiliate programs is by creating your own affiliate program website. This is where you can list all your affiliate programs.

Staying Organized

There are many affiliate networks that provide multiple affiliate programs and merchants. Keeping a track of all affiliate programs in a single network is easy. You would generally be given one username and password as well as a single interface that controls all the programs. However, if you have many of your own affiliate programs or you promote several stand-alone affiliate programs from your website, the task of staying organized becomes a bit more complex.

There are many software programs available on the Internet that organize and keep track of all data associated with affiliate programs. Some of these are My Affiliate Program 2000 and Affiliate Assistant 1.0. These programs maintain databases pertaining to information about all your affiliate programs. A typical database would consist of the following fields:

• Program Name
• Date joined or created
• Contact Name
• URL
• Email Address
• ID
• Password
• 1st Tier Percent
• 1st Tier Sale
• 2nd Tier Percent
• 2nd Tier Sale
• Total Income
• Additional comments

Once the program information has been entered, you can add information about individual sales made and checks received. The program then keeps track of sales to date, amount collected and receivables. Besides, some of the advanced software programs also provide analysis and comparison tools for all affiliate programs. If you take the time to input collected data about clicks, sales, and page views, impressions, emails sent etc. from your various campaigns and enter all of it into the program, it will show you:

• Click to Sale Ratios
• Impression to Sale Ratios
• Amount Earned Per Impression
• Amount Earned Per Click

Apart from these are a few other tips that might help you manage your affiliate programs.

• Always ensure that your website is up and running. On a Daily basis type your URL into your browser's address bar, refresh the page and find out. The danger in not knowing that your site is down comes when you are running a pay per click advertising campaign. The click costs add up whether your site is functional or not. If your site is down, you are paying for advertising, but no one is buying.
• Check your statistics daily, maybe even twice a day. This will give you a better idea of your income trends and also highlight affiliate programs that bring your business. Visit the statistics interface for each network and individual affiliate partner and input your total revenues into any accounting software. Using such software frequently will also keep you informed as to whether certain checks have become overdue.
• Be prompt in answering any queries from affiliate partners or customers, especially when these are about your products or services. This probably means that the customer trusts your site and is thinking of buying your product.
• One of the main aspects of any affiliate program is residual income. You've got to make the most of each and every customer you receive. The best way to do this is by promoting affiliate programs that offer residual commission.
• This allows you to repeatedly get paid for work you do once. For example, if a visitor arrives at your site and purchases auto responder services, newsletter subscriptions, ISP/hosting services, you will collect a portion of the monthly fees for as long as they remain a paying customer. Membership sites are a good way to collect residual commissions and are steadily growing in popularity. There are many affiliate programs that offer residual commission.
• A well placed recommendation placed at the end of an outgoing email can bring in extra sales. Target your audience, what are their specific needs? If you can offer them a product they need/want, often times the end result will be a sale.
• Finally, track all your affiliate links. The best way to accomplish this is by setting up tracking software for your affiliate links. There are a number of scripts that will do the job. Most tracking programs typically allow you to setup tracking links for any product you promote, telling you how many hits each product has received, and where the hits are coming from. A more detailed view of tracking and analysis is given in the section below.
• It is not enough to have a few banners and classified ads. You must provide as much help as possible for your associates if you want them to be successful. You should have tested and proven endorsements, testimonials, sig files, ezine ads, and other unique tools and techniques. You must also make yourself available, either through email or the phone, to help your affiliates implement these tools and to answer any questions they may have.
• Whether you run your own or participate in an affiliate program, you must be able to determine what methods work best in a particular medium. For instance, which ezine ads work best and in what ezine; which banner ads produce the greatest clickthroughs and from which sites or banner exchanges; and where on your website is the most effective spot to include a testimonial.
• Some affiliate programs, have implemented unique payment procedures to get affiliates their commission checks on a timely basis. Some of these procedures include: online electronic payment services, direct bank deposits and checks by fax. If you can solidify your payment procedures from the start, you will save yourself an administrative headache and more importantly, keep your affiliates happy and working to promote your program.

Evaluating your website’s performance

Website statistics and affiliate sales figures are essential for evaluating the effectiveness of your affiliate programs. Before you start recording and analyzing data, it's worthwhile to know what statistics you're trying to calculate - and why. Following are some of the key questions that need to be answered periodically to ensure the success of affiliate programs.

§ What percentage of the website visitors become customers through affiliate programs?
§ What percentages of sales are new or renewals?
§ What is the average revenue per visitor?
§ What is the average revenue per sale?

The most important figure you need to keep track of is the visitor to customer conversion. It tells you exactly how well you convince your visitors to buy your affiliate products. Average conversion ratios for affiliate programs range between .5 and 1.5 percent. Anything above 1.5% is really good. This figure, however, indicates the total conversion for all the affiliate programs. If you promote more than one affiliate program you need to also calculate the conversion rate for each of the programs.

Knowing how conversion rates compare between programs is useful when deciding how to direct your promotional efforts. For example, if you discover that Program 'A' converts at 1% and Program 'B' converts at 2%, it might be time to spend more time and effort to promote Program 'A'. Most tracking software would give you detailed information about each of the affiliate programs promoted on your website.

All affiliate programs that have a low conversion rate should be dropped. While this may seem like a lot of work to go through to track your site's performance, it really is a worthwhile endeavor. Once your tracking mechanism is set, and you've done the inputs a few times, you'll be surprised at how simple it becomes. In fact, you may find that eventually you look forward to 'adding things up' at the end of the month to get a clear picture of where your affiliate business stands.

How to attract affiliates

One of the biggest fears new Affiliate managers have is in finding new affiliates. This fear is a stumbling block that stops many site owners from getting started with affiliate marketing. Interestingly, with a proper marketing strategy, getting affiliates may not be very difficult. Given below are some tips that may help in attracting new affiliates.

Find complimentary sites - "Complementary" sites are a sites that sell products or services that compliment your offerings. If you sell "gardening tools", a site that sells books on "gardening tips" would be a perfect affiliate. If you sell software, try looking for sites that sell computers or computer parts. Finding sites that already attract your target market, and can benefit from recommending your product or service to their visitors, is the goal.
Find content sites – There are many sites that do not sell any kind of product or service but are mainly content-oriented sites. Such sites promote an idea, concept, study or belief. Content sites that are used as a resource for your target market are ideal affiliates.
Finally, there are several sites on the Internet dedicated to listing affiliate Programs. Get your program listed in these directories.

Classifying Affiliates for better management

The hardest part of administrating an Affiliate Program is deciding what your affiliates need to help make the sale. But, by carefully categorizing your affiliates, you can easily determine what their needs are and how to accurately meet them. The plan given below helps in categorizing affiliates in order to manage your affiliate program better.

The first step is to pick at least three types of affiliates. Take a look at your affiliates and try to determine one outstanding characteristic that can easily be compared across the board and choose at least three types of the characteristic. Here are some examples:

Level of Sales - You may find that your affiliates are so completely different that it's hard to find something to classify them by. Try classifying them by the level of sales they've reached with you. You'll most likely find that you have a few forerunners that lead the pack with a number of sales, quite a few affiliates that have sporadically made a sale or two and some that have yet to make a sale. This will help you classify them based on sales.
Products - If you sell a wide variety of products for specific interests/needs you may be able to classify your affiliates by product. For instance, a financial site could classify types like Personal Finance, Small Business Finance, and Corporate Finance.
Industry - If you market commodities like office supplies, health and beauty products, house-wares and so on, you may find that your affiliates come from a wide variety of industries. You can most likely classify your affiliates according to their industry.

The Second Step is to determine the needs of each type. Each of your affiliate types will have different needs; some of their needs will overlap, but you should find a distinct difference in many of their needs. If you find that all of them have the same needs, go back to step one and re-think your types.

Here are some basic things to look for:

• Linking Methods - Different types of affiliates will need different linking methods. Let's use the example above where we had different groups based on sales. Your low sales group may be satisfied with a banner or two to place on their site. Your medium sales type may be interested in an article or two for added content on their site. Your high sales group will probably pass up banners for articles, guestbooks, email ads and signature files.
• Capturing visitors is what you want. In order to do so -- you have to know what they want. Visit your affiliates' sites to see what visitors are looking at and looking for. Ask yourself, "How does my product relate to what I am seeing?"
• Different types of affiliates may expect different commissions. You'll have some Affiliates that have joined your program "on the side" and others that plan on earning a substantial income from the program. Determine what effort they are putting into advertising, how much other programs in your industry are paying, and the amount of time they devote to your program.

The Third Step involves the process of creating and compiling linking methods for each group of affiliates. Based on the needs you identified in Step two, create and compile linking methods for each type. Here are a few linking methods to think about.

• Banners - Though they aren't as effective as other linking methods, banners are still widely used and expected. Make banners in a variety of sizes to fit tops of pages, bottoms, toolbars, sidebars and other miscellaneous areas.
• Articles - These are great for affiliates that need content for their websites and newsletters. Be sure that your articles are articles and not ads.
• Email Ads - Your active affiliates may be interested in placing ads in e-zines or their own newsletters. Try writing a few ads in different lengths.
• Signature Files - Dedicated affiliates may even add your tag to their signature line. Give them a few witty lines to choose from.
• Guestbooks: - Let your affiliates help you build your Opt-In email lists with guestbooks. Offer them a commission for each email address they send you, or each resulting sale from the subscribers they send you.
• Product Images - Give your affiliates images that show and link directly to specific products. They'll be able to choose an image specific to their site, or choose several images to display.
• Review each affiliate Type and match them up with your new linking methods. You may have some linking methods that overlap Types -- this is okay. Just be sure you are concentrating on the affiliates' needs.

The Fourth Step is to decide commission levels. Your first decision will be to determine whether you want to pay a flat rate or percentage of each sale. Based on the needs you identified above for each of the affiliate types, decide on a commission amount for each Type. If you have a two-tier program, consider the possibility of different second tier rates as well.

The Fifth Step is to devise promotions for affiliate groups. Once you have your affiliates properly categorized and your system under control, consider developing promotions for your affiliate groups. Give them special incentives to sell more during a certain time frame, move seasonal products, or increase business during your slow months. Offer them additional commissions, or even bonuses for reaching a specific amount of sales.

A few avoidable errors

• Many affiliate marketers make a huge mistake of posting their ads on forums. Forums can be used to promote your affiliate programs and your website but in a proper manner. Posting banners is very similar to spamming and may easily upset forum administrators.
• Always do your research before promoting your affiliate program to a potential customer. Do not offer affiliate programs to visitors who are not at all interested in the products associated with the program. This is a futile endeavor.
• If you promote affiliate programs offered by other merchants, ensure that you develop your own advertising copy. Many websites commit a common mistake of using the same advertising copy as used by the merchant themselves.
• Avoid Copyright infringement in all cases. Always use original content or ask permission to use graphic images or text found on other websites.
• Do not submit your programs to free websites. These may be free but your programs would hardly ever be noticed, especially by Search Engines. Moreover, your own ranking would get lowered if you submit your affiliate programs to such websites.
• Avoid using caps on your web page or email ad. Using caps is symbolic to shouting, which never goes well with potential customers. A few words may be written in capital text to give them additional emphasis. However, such practice should be limited.
• Always respond to all queries sent by visitors as soon as possible. A slight delay in your response could easily result in loss of a potential client.
• Do not use pop-up ads along with your webpage. Most surfers are likely to close their browser if they come across pop-ups.
• Do not host your website on a free server or use free email accounts. This gives a negative impression to visitors. Using free hosts and email accounts looks cheesy and loses sales.
• Many websites do not have an opt-in list. Create an opt-in and opt-out list for your visitors. Without these, there is no way of tracking potential customers. Visitors should be allowed to opt-in at any time as well as opt-out at any time.
• Most sites have a poor tracking mechanism. It is essential that you track all business activities. Accurate record keeping is crucial. There are many software tools, discussed earlier in this chapter, than can automate your record keeping process with minimal error.
• A 'mall' site is best used as a central hub to send visitors to your other domains. As a main or only site, unfocused mall sites don't get traffic from the engines, and they don't convert well to sales. Highly focused theme sites attract traffic and sales.
• Offline advertising may not be effective. A lot of money and effort should not be wasted on offline advertising. Most people rarely check websites that are advertised in local magazines or newspapers.
• Avoid focus on animated banner ads. These simply use up bandwidth, thus making web pages load slower.
• While advertising do not degrade other competitors. It is recommended that you highlight your products’ uniqueness and superiority but never mortify other products.
• Banners or text links that expire are guaranteed to eventually send your visitor to a broken link or show a broken graphic on your page. Time sensitive advertising is best used only in email advertising campaigns.
• Never put affiliate links on your homepage. This is similar to asking your visitors to leave immediately. Give them a chance to browse, sign up for your newsletter and decide that they'd like to come back to your place before introducing them to your affiliates.
• Technology changes with amazing speed. To keep up with this rapidly evolving industry, you must invest time and money in research. The investment is a tax write-off, and will pay you back many times over in additional revenue.
• Finally, persist with your plan. It might take you time to get established even if you have a solid marketing plan. Persistence is the single most important factor in determining success online or off.

LinkShare – Affiliate program that can bring you great results

LinkShare hosts a password-protected website that offers affiliates a choice of hundreds of merchant programs. On the site, affiliates can join new programs, get links to put on their sites, and then see reports about how their links are performing and how much they have earned.
When a visitor from an affiliate's site clicks on a link and goes to a merchant's site, LinkShare keeps track of all of the transactions that the visitor makes. If that visitor buys something on the merchant's site, you get a commission. In some cases, affiliates are compensated even if the visitor doesn't buy anything, just for having driven traffic to the merchant's site.

LinkShare also provides affiliates with customer service, notifies affiliates about new programs and new opportunities, and offers resources for affiliates to learn about how to get the most out of their programs.

Affiliate management in-built with your payment gateway – ClickBank

ClickBank (http://www.clickbank.com) has a built-in affiliate program. It offers all features of a good affiliate program. There is no need to install any expensive scripts on your website. You can start signing up affiliates right away as soon as you open your account.

The beauty of ClickBank is that it integrates the affiliate management program with an in-built payment gateway. ClickBank is one of the most popular and easiest services to use for payment processing online. Sign-up is quick and you get approved and running in one day.

The ClickBank Control Panel is easy to use. You can get familiar with the whole system in no time. It costs $49 to open a ClickBank account. This is pretty cheap when compared with other payment processing systems. Once you open an account, all your transaction money gets deposited into your account. You are paid the full balance every two weeks.

I’m a member of probably about dozen different affiliate programs, and have literally hundreds of webmasters signed up in the programs I run myself. If you’re serious about earning serious money on the Web, then you’re going to be spending a lot of time checking out affiliate programs and tracking your responses. It’s one of the easiest and most reliable ways to make cash with a website.

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