What is affiliate marketing and how can it work for me?

Affiliate marketing is a method where an online merchant pays online website publishers (affiliates) a commission for leads, subscriptions, or sales generated from their referral.

Why Affiliate Marketing?

Affiliate marketing gives you all the benefits of traditional advertising with an added advantage - you pay affiliates for their "advertising" of your product or service after they have driven a desired action at your site, whether this means a sale or a lead generated. Unlike traditional advertising, affiliate marketing provides you with a pre-fixed cost per lead or sale.

How widespread is affiliate marketing?

In a recent survey from Internet Retailer's Top 500 merchants, more than 80 perscent were found to be operating an affiliate program.

Who are some well known companies using affiliate marketing to drive sales or leads to their sites?

In the secular market, Amazon.com, OfficeDepot, Staples, Dell, HP, OfficeMax, Sears, Best Buy, Wal-Mart, Williams-Sonoma and Blockbuster Entertainment are a few examples of the Top 20 online retailers who all use affiliate marketing to drive traffic and sales.

Are Christian companies using affiliate marketing to their advantage?

Some of the larger Christian retailers are currently using affiliate marketing programs to help them affordably reach their audience. Abbey Press, Family Christian Books, Christianbook.com, Alpha Omega Publishing, Crossings.com, Simply Youth Ministry, and the International Bible Society are all currently using an affiliate marketing program to drive a significant portion of their online marketing revenues.

What are some of the variables that contribute to a successful affiliate marketing program?

There are a number of variables but some of the more important ones include:
• How effective your site is at converting visitors to buyers or leads
• How much commission can you share with affiliates for driving a lead or sale your way
• What effort you are willing to dedicate to develop and maintain an affiliate program, either in-house or through an outsourced relationship
• The competitive environment of your product or service

The effectiveness of your site's conversion mechanism is one of the key components to your success. In the case of a retail site, if you can convert at a rate of 2 percent of your visitors to buyers or better, you are in good position to benefit from affiliate marketing. Lead generation sites need to convert in the 5 percent - 10 percent range for the best opportunity of success.

If you struggle with conversion, we can assist you with our internal resources or refer you to professionals who can help you with identifying and troubleshooting the glitches in your conversion process. Making changes like this aren't just good for your affiliate program, but will also generate improved results and ROI for all of your online marketing efforts.

Being generous with commissions paid to your affiliates is important as well. The Bible tells us that as Christians we should share what we are blessed with and support each other. If you choose to treat affiliates as a valuable sales channel and partners in business, your affiliates will go to bat for you and deliver results that will be profitable all around. Keep in mind that once you acquire a customer, you will have the chance to market additional products or services to them.

We'll work with you to help you understand the competitive environment and craft an offer that is profitable for you, as well as motivational to potential affiliates.

An effective affiliate marketing program is not, as some might believe, a "hands off" marketing method. It's important to have dedicated or outsourced personnel devoted full or part-time (based on size of your program goals) to develop and maintain relationships with affiliates. If you don't have the resources to do this internally, it's important to work with an outsourced manager who knows their business and can provide the needed services to make your program a success.

At USN, we can supply Outsourced Affiliate Management (OAM) services to a limited number of selected clients. We are selective of the clients we work with so that we can use our internal resources to maintain the quality of the program and also strive to increase the return on investment for our online merchants. Our outsourced affiliate management packages are all based on a sliding scale basis, whereas our clients are billed based on the results we provide.

Understanding the competitive environment is critical to the successful launch of an affiliate program. You have the best chance of gaining traction if your offer is a top performer and you know how it stacks up against your competition. There is more involved than just having the highest paying offer.

At the start of our relationship with all consulting and outsourced management clients they receive a thorough and comprehensive Competitive Analysis to assist them with gaining the knowledge to put forth a successful affiliate marketing program.

What can I expect from my affiliate program?

If all of the factors above line up to your advantage, your affiliate program will most likely become a positive ROI in 4 to 7 months depending on the initial investment and monthly cost of maintenance.

In most cases, affiliate marketing IS NOT is a "quick hitter" and will take some time to develop a successful channel. Once you hit critical mass in your program, the time and money spent to get there will be worth it.

Most of the major players in affiliate marketing report that affiliate marketing contributes 20 percent to 30 percent of their online revenues and client acquisition. This can vary from case to case depending on the focus and resources you dedicate to the Affiliate channel compared to others in your marketing mix.

How do I know when an affiliate has sent a sale or lead?

Our tracking and reporting process has 3 stages:
1. We provide the affiliate with a selection of links to your site that are all encoded with their unique affiliate ID. When clicked, these links result in that affiliate ID being stored on their computer in a "cookie."
2. We provide a very simple piece of code that is placed on the confirmation page in either your shopping cart or lead form. This piece of code checks for the presence of an affiliate ID in the user cookie, and reports to our system if it finds one with a transaction ID as well as the amount of the transaction (in sale situations.)
3. Our system then generates a commission payout according to the settings of your campaign and you can receive an e-mail notification, or login to a reporting page to see the results periodically.

Our solution works on over 95 percent of all shopping carts and lead gathering systems.

What are some "fringe benefits" to affiliate marketing?

If you are currently spending heavily on Pay Per Click advertising with sites like Google, Yahoo and MSN Ad Center, you may find that affiliates can take on some of this investment. Many of the best affiliates in the business are top-notch PPC advertisers who are well versed in getting top ROI out of their investments.

You can also work with your top affiliates to control more of the "real estate" on the search results pages that searchers see - giving you a better chance at landing that traffic.

Some affiliates are also avid reviewers and prolific content publishers. If they write positively about your product or service, that endorsement can greatly contribute to your sales. If they have a following on their site, they may have some substantial influence over shoppers.

How can I get started in Affiliate Marketing?

Getting started can seem pretty hectic and overwhelming, but it doesn't have to be. It helps to work with someone experienced to smooth the process for your company.

We're here to help; please contact us for information on how we can help your company to enter affiliate marketing with minimal hassle and a maximum chance of profitable results.