Successful Affiliate Marketing for Merchants

Ask Shawn

Ask Shawn Collins any question about affiliate marketing.

He'll answer your affiliate marketing question in the AffiliateTip.com blog.

Newsletter

Subscribe to the Affiliate Manager News

Name:
E-mail Address:

Solution Provider vs. In-house

Affiliate Marketing Articles by Shawn Collins

It's the age-old dilemma in affiliate marketing – what's the best tact for my company… signing on with an affiliate solution provider, or running an in-house affiliate program? There is no black and white answer to this question. What it all comes down to is which is the best alternative for your company.

There are many factors that should be considered when determining whether to work with one of the 'Big Four' affiliate solution providers (Be Free, Commission Junction, LinkShare, and Performics), utilizing software (AssocTRAC, MyAffiliateProgram), or building a program from scratch.

As I discussed in detail in Chapter 9 of "Successful Affiliate Marketing for Merchants," there are some key elements that you must dissect to conclude the best avenue for your company. These items are: cost, tracking, affiliate recruiting, support, and exclusivity.

Recently, after nearly two years of running the ClubMom affiliate program with Be Free, I decided to examine the alternatives.

The Choice

When I decided to explore my options, I did a number of things. I grabbed a copy of the "Report on Affiliate Management Software" by Dr. Ralph F. Wilson. This report contains detailed feedback from merchants on the various technology alternatives for an affiliate program.

I also lurked around the various affiliate marketing message boards to get a feel for what affiliates had to say about each company, and spoke with affiliate managers that were using each of the solution providers and software programs to get their candid assessments.

And then I created a matrix of the features, prices, etc. for each of my choices. The following is a case study covering my findings, which led me to leave Be Free in favor of My Affiliate Program.

The Price of Success

I run a pay per lead program, so with Be Free I was paying a fee to them for each commission I paid out to an affiliate. This fee was a percentage of the commissions issued for a given month, or a flat fee, whichever was higher.

If I had a lean month, I would be docked the flat service fee, and in the good months, the service fee was rather large (five digits). Also, there was a cost for the initial set-up, commission check processing, e-mailing in excess of a certain volume to affiliates, etc.

The long and short of it is that I am now paying an average monthly fee that comes to one third the cost I paid out to Be Free, and the new program is running with a dedicated database server and Web server. One of the byproducts of the dedicated servers is shorter, branded links.

ClubMom link with Be Free:

http://service.bfast.com/bfast/click?bfmid=26370742&siteid=27415909&bfpage=automatic_rotation

ClubMom link with My Affiliate Program:

http://www.clubmomlinks.com/b.asp?id=1003

While the ClubMom program was with Be Free, we utilized their check processing service, so it was a concern of mine how I would handle this with My Affiliate Program, since they didn't offer this service.

The solution here turned out to be painless, as My Affiliate Program will format the accounting data for QuickBooks, PayPal, and other check writing software and accounting services. I ended up bringing the affiliate payroll over to Paychex, since they were running the ClubMom employee payroll.

On the Right Track

The tracking and reporting at Be Free fulfilled my needs, though the mandatory training for their software, and the learning curve for their software were onerous. Also, the fact that their software had to be installed on the client's PC made it difficult to manage the program remotely, or even if I wanted to access something on another computer in my office.

In contrast, the My Affiliate Program interface is Web-based, so a user can login from any computer (with an Internet connection), and it's very intuitive for the first time user.

One of my biggest tracking concerns about leaving Be Free was whether My Affiliate Program had the ability to track sub-ids like Be Free's FlexTrack. This was a deal breaker, because many of my top performers need it to work with us. I was glad to find that My Affiliate Program has a similar system called Super Track.

A popular feature with affiliates is the universal login and consolidated statistics offered by the solution providers, but this didn't turn out to be a significant enough concern for the affiliates (I conducted an informal poll) I targeted for my relaunched program.

A Few Good Affiliates

One of the selling points of the affiliate solution providers is affiliate acquisition. To that end, the solution providers are able to deliver a decent volume of affiliates to any given program.

As Oscar Wilde once said, "Moderation is a fatal thing. Nothing succeeds like excess." Back in December 1999 at the Affiliate Solutions NYC '99 conference, keynote speaker Tim Choate of FreeShop boasted about his network of more than 100,000 affiliates.

That was then, this is now. While solution providers can send an occasional diamond in the rough, the truth of the matter is that with those big numbers of affiliate acquisition come big numbers of inactive, non-targeted affiliates.

So with both Be Free and My Affiliate Program, I actively targeted and recruited the bulk of my super affiliates. There are many tools out there, such as the search engines, the Internet Success Spider, and lists of Super Affiliates to aid efforts in finding your super affiliates.

To their credit, Be Free instituted their Performance Partner Program in 2000, where they help merchants and Super Affiliates to hook up with one another.

While My Affiliate Program does not have a network of affiliates like Be Free to tap into, they do maintain AffiliateCash, which is an affiliate program directory that lists only My Affiliate Program users. Also, their software package includes complimentary submission to over 40 of the top affiliate program directories through the Affiliate Announce service.

One prominent recruitment device at My Affiliate Program, not currently available through Be Free, is the option to run a two-tier program.  

It's a Tech Thing

The technical support between Be Free and My Affiliate Program is something of an apples versus oranges comparison. On one hand, when Be Free makes a change, it's a change to their software, and it impacts their whole list of clients, while My Affiliate Program clients are able to have implemented changes that only impact their affiliate program.

Differences aside, it has been monumentally easier to get my technical needs met by My Affiliate Program. With Be Free, I came to expect that when I made a technical request or suggestion that I would receive the pat response that they will "consider it for a future product release."

Meanwhile, My Affiliate Program has been quick to act on any requests – in the case that it was something they could complete in a short period of time, it would generally be done inside of 24 hours.

If I make a more involved tech request, they inform me that it would take X number of hours to perform the custom programming, and if I was agreeable, they would complete the request at a rate of $195/hour.

The Exclusivity Issue

As I mentioned earlier, I run a pay per lead program, and I'm always looking for ways to improve my numbers and expand my reach. Invariably, there are some sites that are fully willing to work on a performance basis, but they just do not want to work through a solution provider.

This was the case with two groups that I wanted to work with, but couldn't, due to the Be Free exclusivity clause: CPA networks and some super affiliates. In the end, this was a factor in my decision to walk away. One of the first things I did upon launching the new affiliate program was to re-contact those CPA networks and super affiliates, and we're quite happy together, thank you.

Which is the best alternative for your company? That's for you to answer. I'm glad I made the change, but one thing stayed consistent – the management of my affiliate program is a very hands-on endeavor.

Whether you go with a solution provider, software, or you decide to roll your own, your program will never thrive without proactive, innovative, educated affiliate management.

Copyright 2001 - 2008 -- AffiliateManager.net from Shawn Collins Consulting, Inc. - Advertise on AffiliateManager.net - DMCA

Affiliate Marketing Benchmarks -- Affiliate Tips - Affiliate Conference

This site is a companion to the book, "Successful Affiliate Marketing for Merchants," which features all of the essential components of an affiliate program in intricate detail.