By Linda Woods
Friday, November 14, 2003; 4:00pm EST
One of the common misconceptions about the internet is that this new fangled technology makes doing business somehow mysterious, complex or even risky. While there are certainly lots of technical issues to grasp and implement effectively, I?m happy to report that the basic tenets of proven business tactics are still alive and well.
During the dot-com ?boom? years, there were many failures, primarily due to poor business models, not bad technology. Simple principles like ?but low, sell high? or ?the customer is always right? were ignored in a frenzy of wildly inflated valuations and pre-IPO ecstasy. This has scared some folks away from investing in internet businesses, and online companies have been more conservative over the past 2 years, resulting in a shake-out of the most idiotic ideas and businesses that were based solely on OPM (other peoples money).
But lo and behold, the good news is...the internet isn't going away. And, online spending is growing exponentially quarter after quarter. Long time brick and mortar companies with online sales channels are thriving and experiencing phenomenal growth. So, with all that in mind, what does that mean for affiliate marketing?
It means... it's here to stay. Why? Because affiliate marketing is basically a very old, very well established sales channel based on one of the best known and most successful business models there is: the outside sales force. Yes, affiliates are very much like the troops of cosmetic wielding Mary Kay consultants in pink or the ubiquitous suburbia nirvana called Tupperware parties.
You see, the affiliate marketing industry got off to a little bit of a wrong start in my humble opinion. We all thought that the technology was what made it cool. We were wrong. What makes it cool (and lucrative) is that if done right - it is a powerful sales force that the big direct marketers like Tupperware, MaryKay, Avon, Amway have known for a very long time. If you have a good product, an outstanding compensation plan, a well thought out award/incentive system, a community of personal relationships with customers and offer excellent sales materials, your business will explode with an army of individuals brimming with enthusiasm about your company.
What happened in the affiliate marketing niche is that companies looked at the technology providers that do the tracking of ads served, to somehow run our programs for us. That just isn't what they do. That'd be like asking the guys in the fulfillment center warehouse at MaryKay to knock on your neighbors doors with cleansing cream in hand. Nope - that's not how it works.
What works is every online merchant must emulate this tried-and-true traditional sales model to really grow their business, focusing on recruitment, compensation, incentives, loyality and service, not what tracking software to use. They?re all good, and have their pros and cons. (I?ll discuss this in a future article)
An offline company that wanted to expand it's sales reach by hiring an outside sales force wouldn't think of hiring people without interviewing them and assessing their capabilities. The company also wouldn't think of sending that person off to sell the product without great sales collateral and constant motivational support. Conversely, a good salesperson wouldn't even consider expending energy selling a product that didn't pay good commissions, on time and offered good customer support and a product they could believe in.
So, what's an online company to do? First of all, stop trying to attract every affiliate on the face of the planet. Be selective. Do your homework. Look for the good ones, look for the sites that have something complementary to your product offerings. Make your commission offer exciting, fair and extremely reliable. Think up great motivational offers. Mary Kay saleswomen work their fannies off for free pink or burgundy Buicks and Cadillacs. This also works wonders in the online gambling world as well, with top affiliates driving away with Ferraris!
And, it's not only money that motivates them in the direct sales model. There are weekly motivational meetings with simple recognition given for success. This can be done easily and inexpensively with tele-seminars, regular newsletters and bonuses handed out to top producers. Or, by giving your affiliates top notch custom made web pages with your products datafed onto their site, like an Amway catalog with the salesperson's name, phone number and affiliate ID dynamically generated on it.
Treat your affiliates like valued salespeople and they will be loyal and productive. But this can't be done with thousands of faceless ID numbers on a statistics report. You have entice them with generous commissions on relevant product offers, communicate regularly and personally with them, reward them for performance, and know what their business strategy is and enhance it with good marketing materials and support. This approach will develop over time a valuable, effective and loyal sales channel that costs less than any other means available to develop.
If you're thinking "Yeah, but I can' t do that, I have 5000 affiliates and not even one whole staff person focused on it." Then, you need to rethink your affiliate marketing strategy. If you don't assign human resources to this powerful force, you won't see the results. Period. If you expect to join a network, get 2000 affiliates overnight and then watch the sales explode, you are sadly mistaken. It takes constant and creative effort to nurture this kind of sales channel. Try focusing on less than 100 that are really devoted to your program and work with them personally to build their traffic and sales. If you can?t afford a full time, experienced and well paid Affiliate Manager, there are companies (like mine) who do Outsourced Program Management for a fee usually less than what full time employees cost.
So, technology is not the most important thing here, human resources and creativity are. Yes, there are compelling reasons to closely evaluate what your tracking software or network is capable of doing, and you must make sure you are using the best, most cutting-edge tracking interface you can afford. But, it is much more important to follow the traditional business principles taught to us by giant successful direct sales companies like Mary Kay Cosmetics, in order to create a truly successful, vital affiliate program sales channel.
Source of Article Linda Woods started her own consulting business in May 2000, after a 10 month stint with Commission Junction, in the Marketing Department in charge of Affiliate Acquisition and Educational Training. Prior to that she was the Marketing Director for WebStuf, a web design firm, where she specialized in helping smaller companies develop their marketing strategies, including affiliate marketing channels. She has taught E-Commerce classes at University of California at Santa Barbara and writes and speaks extensively on internet marketing strategies. Linda is also available for private consulting contracts of all sizes. You can visit her web site at http://www. partnercentric. com/.