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How To Set Up an Affiliate Marketing Program

Posted February 9, 2008 , By webmann

Affiliate marketing increases sales. That’s the bottom line isn’t it? That’s the real reason to consider adding an affiliate marketing program to your marketing plan – more sales and more profits. So what is needed to set up an affiliate program?

Step 1. Who will run the program? The first step is to decide if you want to handle the program yourself, if you want to hire an affiliate manager or if joining an affiliate network will be best. Each has their pros and cons.

Step 2. Software. If you decide to handle the management of your affiliate program there will be a need to purchase software. There is an abundance of software products available and a quick Google search will generate tons of results.

Step 3. If the way to go is to hire an affiliate manager, here are some of the tasks they will manage:

Affiliate managers can be paid by the hour when outsourced. It is important to determine ahead of time how much time an affiliate manager will devote to your program this will help when including them in a budget. Remember when profits increase the budget is likely to change.

Step 4. Affiliate networks. An affiliate network is a mediator that connects people that want to sell products or services. An affiliate network or ASP, Affiliate Solution Provider, manages the program, tracks the sales, delivers
affiliate marketing tools and basically eliminates the need to purchase software and hire an affiliate manager. ComissionJunction, ClickBank
and LinkShare are just a few of the many notable ASPs available.

Step 5. Commissions. How to pay affiliates and for how long to pay them is strongly determined by your type of business.

Affiliate commissions generally range anywhere from 2% to 50% and much of that is determined by the price of the product or services and the profit margin on them. If a book sells for $14.95 and the profits are $10.00 then a 50% commission generates a final profit of $2.52 for you. Not much but it is a sale that wouldn’t have been made without the affiliate.

So what happens if that customer comes back and makes another purchase? Is another commission paid to the affiliate or do you earn all of the profit? This is a decision that you have to make. How long does an affiliate earn a commission on a customer that they’ve sent?

Step 6. This is where cookies come into play. No not the hot from the oven chocolate chip kind, the kind that record and track a customer. Those small text files that tag a customer sent from an affiliate. You can set a cookie to last for 30 days, which means that every purchase that customer makes for 30 days generates a commission for the affiliate. 60 days means that every purchase made during the first 60-day period generates a commission for the affiliate. However, if the person makes a purchase 65 days after their initial purchase or visit to the website no commission is generated.

Cookies generally last for 30, 60 or 90 days or for life. A lifetime cookie means that any purchase made by that customer at any time whether it is 10 days from now or 10 years from now, generates a commission to the affiliate.

In the event of a returned product, then decide is whether or not to pay a commission. Generally, businesses only pay a commission on confirmed sales. That means if a product is returned, no commission is paid. All of these details, returned products, commission percentages and cookie life need to be spelled out in your affiliate agreement.

Step 7. Marketing tools. The more tools that are given to affiliates the better they’ll be able to do their jobs. In today’s market, banners are still the most common tool given affiliates however banners are less and less effective. In fact, recent studies have shown that people actually avert their eyes when they see a banner ad.

What is generally more affective is to provide a coded link to your affiliate. This link tells your program that the customer that clicked on it came from them. Text links and links used in web copy generate significantly more click-throughs than a simple banner ad. Here are some more tools to provide your affiliates:

Step 8. Recruit affiliates. Here’s the big question. How and where to find quality affiliates?

Step 9. Motivate and Communicate. Make it worth your affiliate’s while. You need good products, services and a high conversion rate or they’re wasting their time sending customers to you. There’s nothing more frustrating for an affiliate than sending you 100 customers and not having any of them make a purchase. Make sure your sales page converts!

You also need to make sure that you’re paying your affiliates well. A commission of 2% on a high end product is fine, however if the product only costs $10 then it’s hardly worth the affiliates time.

Make sure to give them as many tools as you can to make pre-selling products or services easy. This means all of the things that we talked about earlier, banner ads are fine but text links, ad copy, coupons, promotions and even email templates or sales letters are great.

Communicate with your affiliates on a regular basis through a weekly or monthly newsletter. Be sure to offer contests, special promotions, coupons and the like to motivate them and make their jobs easier and more fun.

Related posts:

  1. Benefits of Hiring an Affiliate Manager
  2. Make Money Online Successfully Recruiting Affiliates
  3. Creating Back End Offers On Affiliate Sales
  4. Which Software Program Is Best For Your Affiliate Program?
  5. What Commission Rate Should YOU Be Offering Your Affiliates?

Topics: affiliate programs, affiliate marketing, make money online |

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