What are the top 5 reasons why an affiliate would choose one merchant over the other while deciding between companies that sell identical products/services? Based on what I have seen in the past, the following 5 components (yes, they all start with a C too) are the ones that affiliates look at:
It has to be more attractive than that of your competitors.
2. Cookie life
Same as above.
3. Competitiveness & Conversion
If you are not as competitive as the other merchant (and remember that competitiveness is not only about winning it on the product/service cost front, but also about landing page design and overall website usability, customer service and after-sales support, etc, etc) — you will not convert as well as the other merchant, and then this third point becomes more important than the two above-listed ones.
Let’s have a look at an example. Suppose, you market the same product that Amazon does, but since you have direct access to the manufacturer of the product, you can sell for only three-quarters of the Amazon’s price. Amazon’s price is $12, while yours is only $9. Additionally, you can pay better commission (8% against Amazon’s 4%), and support longer cookie life (90 days against Amazon’s 24 hours). However, Amazon’s landing pages (with all the reviews, better product images, detailed description, etc) convert at 5%, while your pages convert at 2%. What does it mean for the affiliate?
Traffic sent to you:
100 hits * 2% = 2 sales
2 sales * $0.72 (or $9 * 8%) = $1.44
Traffic sent to Amazon:
100 hits * 5% = 5 sales
5 sales * $0.48 (or $12 * 4%) = $2.40
Guess which merchant the affiliate will go with?
In my Autopilot Affiliate Program Management or Recipe for Failure article for the FeedFront Magazine I quoted Econsultancy’s Affiliate Census reports writing:
Among the top reasons for not promoting a merchant, US affiliates pointed to “slow acceptance to program” (17%), and “bad follow-up communication” (10%). Poor communication has also been mentioned by 12% as the reason for dropping affiliate programs. UK affiliates have also stated that “merchants do not communicate a variety of issues to them,” and whatever communication does exist, “ranges from bad or impersonal contact” to “failure to convey important information.” US affiliates echoed this observation by underscoring that “merchants do not communicate enough with them,” and when they do, it is performed in a generic, mass-mailing style.
Maintaining a healthy and consistent two-way communication channel (through personal e-mails, newsletters, blog posts, Twitter updates, etc) is extremely important.
5. Campaign support
Besides the above-quoted element which deserves being singled out, it means offering affiliates a wide creative inventory (banners and text links), running bonus campaigns (to reward highly productive affiliates) and activation campaigns (to reward affiliates that put up their links and/or start referring sales/leads), going out of your way to provide affiliates with personlized attention (be it in providing them with custom size/color banners, exclusive coupons or anything else), and proactive affiliate program management.