by Michael Ni
Affiliate marketing is continuing to grow, with Forrester finding affiliate programs to be the third largest marketing budget behind PPC and email in the U.S. The analyst firm predicted that the affiliate channel will reach approximately £3 billion by 2016 and increase at a compound yearly growth rate of 17% from 2011 through 2016. Jupiter Research also found that consumers that shop via affiliate links spend £4.63 more than the average consumer, and online shopping through affiliate referrals are 43 percent more likely to convert. With the strong outlook on affiliate marketing, it’s time to step up your game and strategy to drive you affiliates to promote your products.
There isn’t a single merchant in the world selling through affiliate programs without idle affiliates. These are affiliates that are not active, meaning that they don’t generate any sales or, worst case, they don’t even refer traffic to the merchant—resulting in no exposure for the merchant’s products.
Before labelling an affiliate as ‘inactive,’ you should take into consideration its sales history (if any) – the frequency or amount of sales it was generating at one point, as well as the type of product or services sold through them. In the software vertical, for example, an affiliate promoting consumer software can become inactive quicker than an affiliate promoting enterprise products.
Why do some affiliates become inactive?
In order to activate an idle software affiliate, it is best to address the issues they’re having. The most frequent reasons for why affiliates periodically don’t perform are as follows:
• They are missing the tools to promote your products. For example, for coupon affiliates, you must provide them with coupons.
• An affiliate joins the merchant’s program, but it takes a while until it actually starts promoting the products online.
• A search engine algorithm update impacts their traffic or SEO efforts – Google Panda is the most popular.
• An affiliate finds another product to promote with better conditions – higher commission, special promotions, a product that is easier to sell.
• A lack of targeted traffic on the affiliate’s website.
How can I activate affiliates?
The key to reaping the benefits of a successful affiliate program is to keep your affiliates active. Below are six approaches to reactivating idle affiliates:
A proactive approach: keeping your affiliates close to you from the beginning. Even if it may mean a lot of time is spent speaking with them, it’s worth it. By engaging with your affiliates you will be able to know what happened directly from them and help them better engage their traffic with your products. Send them a personal welcome message once they join your affiliate program and keep the communication open with them periodically. Newsletters are a good option to communicate with a large number of affiliates, but for your top affiliate, a constant personal email approach is recommended.
Incentivise affiliates for each little step taken into promoting your products. You may offer a flat commission percentage to begin with, adding increments of 5% to the commission for:
• Sending an email back to you with a URL where they promote your product on your website.
• Giving you feedback about your products after they test them.
• Featuring your products on the page that gets the most relevant traffic.
• Recommending your products on the homepage, etc. A good example for this is how VSO Software does it.
Run sales contests within your affiliate programs but set realistic goals. To get those latent affiliates to start selling. You have a one in a million chance to get things moving for inactive affiliates by setting a goal of “10,000 sales to reach within a week.” Instead take a look at your sales numbers among affiliates and set the goal to reach somewhere in the middle for inactive affiliates. Don’t forget to send at least a reminder for the contest to your latent affiliates. UK-based distributor Daisy Wholesale incentivised resellers by offering a luxury weekend retreat if they could sell the most Vodafone connections.
Cash bonuses and special affiliate conditions work best – a recent survey we have running inside our affiliate network shows that 45% of affiliates think that the most appealing prize in a contest is money. And we can extend that even further if you are talking about inactive affiliates – they need the cash to keep things rolling, for example, to further invest in PPC. The second most appealing prize is to get special conditions from the merchant: increased commissions, exclusive products, etc. This applies to the more experienced affiliates. Avaya offered a bonus of £1800 to resellers who join its reseller network and successfully complete its training programme.
Generate exclusive discount coupons for them to use. Coupons are a great way to accelerate sales, especially in the software vertical, where there is no physical or delivery cost involved. Some latent affiliates can be motivated by sending them time-limited discount coupons. Try to also include the affiliate’s website or name on the coupon. For example, Cisco changed its channel program by attracting potential partners to join the network with a 25 percent discount on a new product.
Offer affiliates the chance to test your products themselves. There are lots of content affiliate websites today who use reviews as a primary way of promoting products to their audiences. Sending them a fully functional version of your product can help accelerate the reviewing process, resulting in the product’s listing on their websites.
We’ve seen some merchants attempt to use negative motivation to reactivate affiliates – sending ultimatum-type emails or decreasing the affiliate commission to be lower than the default. In 99% of cases, this does not work. Positive reinforcement and incentives have been tactics long used to motivate, like a parent getting their child to eat greens with the promise of dessert. It’s time to show your affiliates you care.
Michael Ni is the CMO/SVP, marketing and products at Avangate.