When To Launch An Affiliate Program

by Greg Hoffman March 9th, 2011 

affilate-busker

There are at least one hundred questions you should ask yourself when considering whether or not to launch an affiliate program. The most important thing to remember is not to rush the process. Affiliate marketing is not a way to start your sales, it's a way to enhance your existing sales. Too many would be merchants have a shiny new idea and a half completed ecommerce site when they stumble onto the idea of building an affiliate program.

The first and foremost question affiliates ask is "Does the site convert?" This means; have you sold anything yet?

A general rule of thumb is to look at your sales over the last 6-12 months. Do you have consistent sales that are growing through your other internet marketing efforts? If the answer is yes, then you should be looking for more information about how affiliates can help you find new customers.

If the answer is no, then be patient. Research best practices for ecommerce sites. Test your landing pages. Work on search engine optimization. Spend some money testing paid search. Send out a few online press releases. Work on your brand anyway possible! If the product is wanted or needed, you should start seeing sales.

What conversion rate is good? Industry standards say 1% to 3% is normal per 100 clicks. Anything above 3% is good. Anything above 5% is great. If your conversion is in the double digits, you have a winner.

support-staff

Do you have the staff to support the program or do you need to outsource? A good programmer is a must. Besides website coding, they need to understand pixel integration, datafeeds, coupon creation, landing page testing and shopping cart optimization for maximum conversions. Next, you'll need a graphic designer unless the programmer can handle the job. Your banners need to have high resolution images, clear and concise descriptions of what you sell and a call to action. A good set of banners range in size from 88×31 logos to skyscraper ads at 160×600. Visit the IAB Ad Unit Guidelines page for more information.

Are you prepared to support affiliates and understand their needs? Will you be the affiliate program manager or will you delegate that task. It is critical that you find the right person for this job. Successful managers research best practices and test campaigns to see what works best with affiliates and customers. They are both pro-active and creative with their ongoing promotions. The manager needs to be ready to answer affiliate questions in a timely fashion, be open to their suggestions and appreciate what they do for your brand. Your best affiliates will give you brilliant ideas you've never considered. Affiliates take the risk and the time to promote your products and all they ask for in turn is to be fairly compensated and treated with respect. Get to know them on a personal level. This industry is built on trust and relationships.

Do your research on affiliate networks and where your competitors are in this space. If there is a gaggle of merchants in your niche on a particular network, you need to evaluate if this is good or bad. Do you have a better product with higher commission so you can lure some of those affiliates to your new, yet untested program? Or do you opt to another network where you might shine with a different set of affiliates?

Finally, create an affiliate account for research and competitive intelligence. Lurk in various programs on different networks for a while to see how it's done. Then you'll know when it's time to launch your affiliate program.

Greg Hoffman

Greg Hoffman, aka the Marketing Gorilla, is an affiliate management consultant with diverse clients in the major affiliate networks. His agency was recently voted OPM of the year for 2010. He hosts two podcasts, one highlighting interesting merchants, the other highlighting interesting affiliates.

Affiliate Marketing Blog

You May Also Like

10 Responses to “When To Launch An Affiliate Program”

  1. Greg, this is one great article! The only thing I'm not so sure about is the conversion "standard". Won't it differ greatly by niche, and also hugely depend on brand strength? ;)

    I appreciate what you're writing about conversion overall though. Too many merchants just jump to assumptions that when/if affiliate-referred traffic doesn't convert well, it is the affiliate to blame. Both sides must understand that conversion is always a mutual responsibility: affiliates are responsible for driving targeted traffic to the merchant, while merchants are responsible for serving that traffic well-optimized, highly-converting landing pages.

  2. Andy Symonds says:

    Great post Greg.

    I am currently looking into setting up an affilaite program for a client's project and you have added some extra points I can highlight in our next meeting :)

    Hopefully my extensive experience as the affiliate will make this client's affiliate program the best in their sector but like everything it will depend on their time, expertise and willingness to invest in trial and error!

  3. john says:

    I am a newbie, Will have a affilated website very soon, Whats the best way to get a merchant to hook up with, but i notice most merchants are looking at your traffic on your website, but if your new , youu dont have much traffic as a newvie, how or what is the best way to get a merchant to accept yoy as a newbie?

    • Greg Hoffman says:

      John, Before worrying about finding merchants to work with, build your content and your audience. Find one merchant that matches your target niche and work with that manager personally to help fine tune your traffic. Once you start receiving commissions, your network profile will increase and more merchants will accept you.

  4. Jackie Welsh says:

    Very good article, it is so true, everyone wants to jump right into
    trying to make money having a ecommerce site, but has no clue and the outsourcing resources to help them. Thats why a lot of people get discouraged and quit :( They believe the ones that are getting rich off there dreams saying yeah just do this, and a little of that and you will make thousands of dollars just like me :) NOT…what they refuse to tell you is that they started out making small amounts and then made some money then got the right resources and outsourcing out there then made the big money, its a process like anything else, and trust me, it does not happen overnite….

    Jackie Welsh

  5. [...] as launching on a network and flipping the auto-pilot switch. In the last article, we discussed when to launch an affiliate program. Now we need to discuss how to build a competitive program that is attractive to [...]