Affiliate Marketing: Does Structure Matter?

Writing by Nick Stamoulis on Friday, 13 of April , 2007 at 9:13 am

Affiliate marketing has been around almost as long as the Web itself. Well, since the World Wide Web, anyway. Essentially, your affiliates are your sales people. They bring you business. You should treat them well.

From what I’ve seen, the best affiliate programs do three things:

• Compensate performance generously
• Reward recruiters
• Provide marketing collateral for the affiliates

You have to make affiliate efforts worth your affiliates’ time. What that means is compensation must be commensurate with the amount of time and energy your affiliates put into promoting you. That will be different from product to product, service to service, and between products and services. Generally, though, you want to compensate your affiliates with generous commissions. Some affiliate programs pay as much as 75%, but I think 50% for most products is reasonable and 30% for most services. What it all boils down to is the value each customer is worth to your business and that means, in most cases, more than just dollars and cents. You have to also look at future value of expected business transactions.

Another aspect of a quality affiliate program is the level of recruitment you encourage. You want your affiliates to bring you more affiliates. To encourage that you should have a two-tier pay out system. The second tier shouldn’t be much. A meager 5% over ride on the efforts of affiliates your direct line recruits can go a long way. But you should provide some reward to encourage growth of your organization.

Finally, you should create banners, link codes, and other marketing materials for your affiliates. This does two things. It makes it easy for your affiliates to promote you since they will spend their time on promotion rather than creation of the materials necessary to promote you. Secondly, you maintain control over your message, which is important because you don’t want your affiliates out there representing you in ways that might prove counterproductive.

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