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.