Affiliate programs have long been a popular way to drive conversions and visibility for online businesses. There are many small companies that rely heavily on affiliate programs for sales in every industry, from simple informational product companies such as Fat Loss for Idiots to Fortune 500 companies like Walmart, affiliate marketing is a big business with big ROI for merchants. After all, you don’t have to pay until a referred lead actually buys, and your affiliates do all the work.
However, as with everything, there is an up side and a down site, and this is most certainly true with affiliate campaigns. When you start accepting affiliates, your are, in a sense, handing them your brand and giving them some leeway on how they can promote it. You are trusting your affiliates to treat your brand with care and oftentimes, this trust is broken. There are really compelling reasons to run an affiliate program, but we’re going to discuss some of the downsides of affiliate marketing and what you can do to protect your reputation when utilizing affiliates.
The Affiliate Mindset
First, I feel it’s important to review the general mindset of an affiliate marketer so that you can understand how the people who promote your products think. Understand that successful affiliates treat what they do as a business, meaning that they often don’t care about your brand personally, they just want to increase revenue and decrease costs so that their business is profitable. Often, what works for affiliates online is not always in line with presenting your brand in the best light. For example, if an affiliate has built a large email list, they will be pushing your brand along with other brands and sometimes, those “other” brands are ones you might not want to be associated with. Moreover, if your program terms are worse then your competitors’ , there is a strong pull for affiliates to favor your competitors’ products. Often, the brand with the highest payout wins. This is not a negative thing from a macro view, as most everyone would be focused on increasing their business’ revenue! Just remember, your affiliates (in general) care about their ROI, not necessary your brand. Understanding this is the first step in setting up an affiliate program that is both beneficial to your brand as well as your affiliates.
Some Typical Issues
Listed below are some ways that affiliates can harm your online reputation.
- Affiliates can run PPC ads for keywords that are similar to the ones that you bid on, not only hurting your PPC ROI, but including brand mentions in their landing pages that aren’t the most flattering.
- Affiliates can sometimes undercut your own product prices by offering incentives to their users as a means to increase their conversion rates.
- They could include an affiliate link to your website in their own informational products that might be low quality.
- They can use spammy promotional methods to push your product.
- Using your products along with other re-bill offers that your leads don’t know they’re purchasing when they sign up for your service.
- Rate your product less favorably than your competitors’ products.
Now although these can lead to some serious reputation issues, all can be prevented through proper planning when launching your affiliate program.
The Solutions
Your affiliate agreement is your first line of defense
This agreement includes the specifics of what your affiliates can and cannot do to promote your products. Now, you don’t want to go crazy on the restrictions unless your want your program to be a flop, but best practice is to look at your competitors’ affiliate agreements to ensure that yours is competitive. Generally, you should prohibit affiliates from using your brand name in any online advertisements (PPC or Cost Per View) and keep them from bidding on keywords that include any variation of your brand name. You can include clauses about offering customer incentives and even include clauses about re-bills or reviews. Again, its important to look at what your competitors are doing and make sure that your agreement isn’t too stringent when compared with theirs.
Your termination clause
Include a clause that allows you to terminate the relationship with your affiliates at your own discretion. Obviously, the point is not to abuse this, but to simply give you the power to end your relationship if an affiliate is really harming your brand. Be very careful when going this route, and make sure your clause stipulates exactly what will happen with their commissions if they are terminated before their payout.
Active monitoring
Of course, you need to monitor your affiliates to make sure they are abiding by the rules of your program. Simply monitoring the first few pages of Google for your brand name and constantly reviewing your PPC competitors will help you quickly discover what affiliates are doing to promote your brand. Type in “<brand name> review” & “<brand name> deals” to get see what affiliates are saying. Always monitor the quality of leads that your certain affiliates are driving for clues as to what methods they’re using.
Be nice
The idea of this article is not to put you at war against your affiliates! Believe it or not, your affiliates are your customers too and it’s in your best interest to keep them happy. If an affiliate does something against your program’s terms, simply contact them and politely ask them to stop, and make sure you provide your affiliates with great support and sales materials from the beginning. If you work to keep the relationship positive, so will your affiliates.
Offer the best payouts/terms
It’s surprising that many companies don’t consider this. If you monitor your competitor’s affiliate programs, simply differentiating the terms of your program can lead to huge dividends. After all, if you have better affiliate terms than your competitors, who do you think is going to get preferential treatment and ratings? You are!
Believe me, the amount of your payout isn’t the only way you can differentiate your affiliate program! Are your competitors just providing a one-time bulk payout for affiliate sales? Then you should try having a small one time payout, but including monthly payouts for as long as the referred lead is a customer. Do competitors have high payouts but poor support? Then you can get affiliates to favor you by providing the best support possible. What does this mean? It means providing your affiliates with dozens of articles they can use and customize to promote your brand and providing them with plenty of banners or pre-made landing pages that have been tested and convert well. Even with lower payouts, affiliates will gravitate towards programs that offer superior support or convert better.
Affiliate marking is an amazing tool for both small and large businesses alike. The fact that large players (Amazon.com & Entrepreneur.com, for example) utilize affiliate programs demonstrates that a well planned affiliate program can be a high ROI promotional method. Just make sure to monitor your affiliates and work with them on creating a mutually beneficial relationship, as this will lead to more sales and an untarnished online reputation.