If you’re thinking about starting an affiliate program, there are a few things you need to know first.
From a marketing standpoint, having an affiliate programs sound pretty enticing…
Who wouldn’t want to have hundreds, if not thousands, of affiliate marketers promoting your product all over the Internet?
The notion is pretty hard to pass up… imagine the reach you’ll have with all these affiliates. You’ll be rich!
Well, sorry to say, it’s not that simple.
I wish it were.
In fact, the truth is that not every company should have an affiliate program.
Here are the three top questions you need to ask yourself before starting an affiliate program:
- Do you have a high converting Website?
Obviously, it’s in everyone’s best interest that you have a high converting site ─ especially yours! The better your site converts visitors to sales, the more affiliates will make and in turn, the more you will make.For example, if an affiliate sends you 100 visitors, your current conversion rate is 1.5%, your product sells for $50.00, and you are paying a 10% commission that means your affiliates would make $7.50 per 100 visitors. However if your site was converting at 2.5% they would be making $12.50 for the very same 100 visitors.How do you increase your conversion rate? You can increase the conversion on your site through multivariable testing, aka MVT, which is a subject of an upcoming post I’m writing. Stay tuned!
- Do you have the margin?
Some companies run on very slim margins. This can make it difficult to have enough left over to pay the affiliates a fair and enticing commission.One aspect that is often overlooked is that you will also need to make enough to pay someone to manage the affiliate program like an outsourced program management company. Not only that, but you have to pay to put it into an affiliate network and will also likely encounter nominal monthly minimum costs.
- How is your current online marketing efforts performing?
While some hope otherwise, it’s safe to say your affiliate program won’t outperform your other online marketing efforts in terms of revenue.Therefore, don’t expect it to lay waste to your pay per click or search engine optimization efforts. It’s not uncommon to see PPC drive about 60% of the online revenue, SEO 30%, and Affiliate channel drive around 20%.
In order to have a successful affiliate program you first need to have a high converting website, be able to afford paying affiliates an attractive commission, and already have online marketing that is performing well.
Otherwise, you will be spinning your wheels and you will likely repel affiliates.
Before jumping in with both feet first, take a minute to be sure your company is really ready to have an affiliate program. You’ll be glad you did.
To learn more about Net Media Group’s proven affiliate program management give us a call at (801) 365-0057 today!
