E Learning Curve
If you scan the developments in the business world that have taken place in the last fifty years or so, you will find that business Organisations have had to reinvent themselves and write new rules of games. Everything about the business is changing rapidly. Introduction of IT has brought in, undreamt of changes in markets, […]
Planograms – Meaning, its Need and Types of Product Placements
How do you think buildings are constructed? With the help of architectural drawings. An architectural drawing creates a rough print of the building on paper which gives an idea about the floor plans, location of rooms, lobby and so on. In retail a planogram replaces architectural drawings. Once a retailer opens a store, he needs […]
Driving Business Leadership through Customer Service
Though every Business or Organization wishes to be the market leader in its chosen niche segment, it doesn’t happen that easily. There can be very few leaders who dominate the market for a long time. True there are companies that are successful for a little while and they disappear overnight. But then there are Organizations […]
Role of Event Management in Corporate Communication
Event Managers or Corporate Communicators The question as to whether the corporate communications team in organizations has to take on the additional responsibility of organizing events has to be answered in the wider context of the organizations size and the budget that it allocates for this purpose. Though many multinationals spend lavishly on event management […]
Importance of Market Research to Organizations in an Age of Unpredictability
Market Research in the Age of Unpredictability We are living in an age of unpredictability. With sales forecasts and marketing projections going haywire, organizations find themselves unable to have a “grip on the present” and a “vision for the future”. Further, they also find that any forecast or projections about consumer behavior invariably turns out […]
As a merchant, using affiliate marketers is your business is a difficult task. This is because affiliate marketers are themselves individual businesses. They need to be motivated and rewarded. It is the duty of the merchant or of the affiliate network to ensure that the affiliates are well paid. In this article, we will discuss some strategies that are used by merchants to imbibe affiliate marketing as a part of their marketing DNA. It is a useful guide for affiliates as well to figure out what they must expect from a merchant website.
The marketing function in an organization can be broadly divided into two parts, one that deals with communicating the brand image with customers i.e. marketing and another one which deals with the top line revenue i.e. sales. The affiliate marketing program has to be placed in one of these two categories. This decision has an impact on the long term behavior of the company’s affiliates and hence is very critical. For instance, if affiliate marketing is considered to be a marketing function, affiliates will focus more on metrics such as reach, brand recognition etc. This is also useful for many merchants. However, the usefulness is limited to the early days of a brand’s existence. Also, appraising affiliates based on number of eyeballs captured etc. is difficult and deceptive.
On the other hand, if affiliate marketing is considered to be a sales function, the behavior of affiliates changes drastically. They will now be evaluated on a completely different set of parameters i.e. cost per sale or contribution to the gross profit margin etc. For most merchants that have somewhat established brands, this is the preferable way to use affiliates.
Once the affiliate marketing program is defined as sales function, the rest of the activity becomes a numbers game. Businesses, must therefore be aware of the relevant numbers that they need to look at as well as the decisions that they need to make to reach those numbers.
For instance, merchants need to be aware of the prevailing cost per affiliate in the market. They should find this information via benchmarking exercises. Once this information is known, merchants must ensure that they hire affiliates within the same range. Affiliates which offer very high costs may be inefficient whereas the ones with rock bottom costs may be ineffective!
All decisions from rewards to separations must be based on hard core pre-determined numbers. Clear metrics remove ambiguity and provide affiliates with a clear cut picture of the merchant’s visions. Since affiliates are external to your organization, they may not understand your vision correctly unless a clear set of numbers is provided to quantitatively explain your point of view.
The global affiliate marketing is a huge $9 billion pie. There are corporations that specialize in certain kinds of tasks. The one size fits all affiliate marketing network does not exist. Searching for such a network is like searching for a unicorn i.e. it’s a futile activity. Merchants must be aware that certain affiliates perform better for MNC’s, others do well when their clients are SME’s and so on. Also, some affiliates can create brand image better than the others whereas others are experts at driving sales. The bottom line therefore is that merchants will have to avail the services of lots of different marketers depending upon their objectives. Selecting an affiliate partner is therefore as much about introspection and where the company stands as it is about evaluating the performance of vendors.
For the individual affiliate marketer also this information is extremely important. The era of generalists is long gone. Merchants now hire and reward experts. Hence, they must build their capabilities accordingly.
Affiliate marketers are just that, they are your “affiliates”. They are people that you need to consider your allies and respect accordingly. Many affiliate programs fail when merchants consider affiliates to be third parties and do not respect them as such. Since they are part of your company, they must know about any changes in policy before the information is made public. This will enable them to build trust with their followers. Also, they must have a different grievance redressal mechanism. Consider your affiliates to be a large buying group. They demand and actually deserve priority treatment. Failure to provide this treatment will destroy your affiliate’s credibility. They will lose their followers and you will lose your business.
For the affiliates, this is a very important lesson. Do not just pay attention to the monetary rewards. Pay attention to the trust and respect provided by the merchant. Dealing with the merchant who is not committed to affiliate marketing will hamper your reputation. As an affiliate, reputation is your number one asset! People spend money based on your word. Please ensure that the value of your words remains intact!
To sum it up, introducing an affiliate marketing program is one thing and making it a part of your DNA is another! It requires extensive training and education inside the organization before the benefits of affiliate marketing can really be reaped.
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