Remember my 2009 post about Bank of America becoming a loyalty affiliate?

Another classic example of a major brand acting as a cashback affiliate, which has just caught my eye, is ShopDiscover:

And just like it was with the Bank of America — where you had “to be a user of … Online Banking to enroll” — in the case with Discover you need to (a) log into your Discover card online account to see individual retailer pages, and (b) use your card to qualify for the cashback.

For example, when you click on any of the merchants on their list of “over 200 online retailers“:

…you’re prompted to log into your Discover account, and only then you’ll see the page about the merchant (let’s take 1-800-Baskets as an example):

Then after you click that “Start Shopping” button, you land on the retailer’s website (and note that affiliate identifier in the URL):

It is also obvious and not surprising that Discover functions as a super affiliate (for all the online retailers they promote), or a high volume affiliate who works with merchants on private commission basis. As is apparent from this affiliate program’s description, both 1-800-Flowers and 1-800-Baskets pay 6% on their default level. Add Discover card fees, which they can also play with, and still there will be no way for the total amount to exceed 10% or thereabout. Yet, they are offering 20% in cashback on both 1-800-Flowers and 1-800-Baskets.

Have you ever wondered if there are any other motivators available to affiliate program managers besides cash bonuses, prizes, and other extrinsic means of affiliate motivation?

There are!

It has also been proven that the more cash bonuses you give out, the more the per-bonus amount is expected to increase to create the same drive next time you decide to motivate by cash.

Super affiliates, who are also in this business for the money, are not picking affiliate programs based on the amount of an activation bonus, or even performance bonuses interwoven into the payment structure. Most of the time they have a longer term plan on how to succeed with this or that affiliate program, and their motivation comes from the challenge, the interesting work they’re getting themselves involved in, and the opportunity for further learning and advancement.

Read more in my newest article on affiliate motivation in the April 2010 issue of the FeedFront magazine, which may be read online or downloaded here.

See also the post on how the CSN Stores’ affiliate program manager uses some of the principles I’ve written about in the above-quoted article. Whether they are doing it intuitively or not, I certainly applaud the approach.

One of very few theoretical and more academically-written books on affiliate marketing (if not the only one) is the Strategic Affiliate Marketing by S. Goldschmidt, S. Junghagen and U. Harris published in 2003.

While discussing the basics of affiliate marketing, the authors spend time looking at “Affiliates’ Characteristics” (p. 51-52). In their categorization of affiliates they split them “into three main categories” which are “based on their size/traffic and their level of specialisation/focus.”

These are:

1. Hobby Sites – 75% of all affiliates in the program – characterized by “relatively low traffic”
2. Vertical Sites – 20% of affiliates – affiliates with medium traffic “that have chosen to specialise in a certain topic” and therefore have “a very focused audience”
3. Super Affiliates – 5% of affiliates – characterized by ability to “draw a large amount of traffic, but are relatively unfocused in their content and audience” [underlining mine]

In this post I will not speak about the basis for the categorization, and the observations/statements made about any other group but the “Super Affiliates” one. The authors state that this particular group of affiliates is “characterized as businesses and organisations that evaluate the revenue potential of affiliate marketing in comparison with banner advertisement and other opportunities” and “are usually less interested in sales commissions than click commissions.” Whoa there! We’re either talking completely different industries, or all of the top affiliate producers that I have ever met are not really super affiliates. Let’s summarize. The authors characterize super affiliates as:

1. Websites with (a) loosely focused audiences, and (b) no particular specialization
2. Always comparing affiliate marketing opportunities with other types of advertising
3. More frequently interested in the pay-per-click than to per-sale or per-lead models

I would argue that none of the above three points correspond to present-day affiliate marketing reality. On the contrary, super affiliates are frequently extremely focused on their niches, have well-focused (and loyal) audiences, know exactly what they are doing through the affiliate partnerships with merchants, and aren’t looking at CPM or CPC models.

Three years ago the AffStat 2007 report registered the following breakdown of payment models across different affiliate programs:

• Cost per sale (CPS) – 80%
• Cost per action (CPA) – 19%
• Cost per click (CPC), etc – 1%

I don’t think there is any way to get farther from the truth than by defining super affiliates in light of the three above-quoted points. I’m including this post in the Affiliate Marketing Fallacies section of my blog.

Reference: Goldschmidt, S., Junghagen, S., Harris, U. 2003. Strategic Affiliate Marketing. Cheltenham, UK: Edward Elgar Publishing

Every time I launch a new affiliate program for a client, and affiliate-referred sales start rolling in, the client gets happy. Then a few weeks into the process, clients start getting impatient. “So when, when will we get the real super affiliates to start pushing us?” — they ask.

I believe that a little fishing analogy explains how things really work. But before I get to it, let me mention a few things as an introduction. Unless at the time of starting your affiliate program your company is already one of the major brands (either per the Internet Retailer’s Top 500 Retail Websites list, or per the Fortune 500 lists, or any other widely recognized rankings), you will have to do some convincing to get those super affiliates on board.  In this particular context your most convincing argument is your affiliate program’s statistics. On Commission Junction, for example, prior to joining your affiliate program, affiliates are able to review your 3-month and 7-day EPC [definition here], as well as your program’s ranking on a 5-bar scale which reflects the program’s performance as compared with the other affiliate programs on CJ. On ShareASale affiliates can see your EPC, reversal rate (a very important metric that many other affiliate networks do not disclose), average sale amount, and average commission amount — all in the course of 7 and 30 day periods.

If your brand is not as big as the ones on the above-quoted lists, and you do not have a proven track record in the affiliate marketing industry, you’ll have to start from scratch. You will have to first hook the “smaller fish” to use the performance that they will show in your program as bait for the “bigger fish”. Of course, this is only an illustration, and I hope it does not offend anyone. I want to emphasize the importance of smaller affiliates here. First of all, they will help you build your new program up to make it more attractive to bigger affiliates; and secondly, you never know which one of them will be the next super affiliate. So, be patient, persistent, and attentive to the needs of all affiliates who have chosen to join your affiliate program, and the success will follow.

Last week I blogged about the three R’s of affiliate program management success. Today I would like to list the three P’s that I believe to be pivotal to one’s success as an affiliate. I have noticed these three things in every super affiliate I know, and today I would like to share my observations with you.

1) Persistence

Psychologists define persistence as “the continuation of an activity in the face of obstacles to the maintenance of the activity direction” (Chess & Thomas, 1995, Temperament in Clinical Practice, p. 278). Successful affiliates are both hard-working and strong in the face of obstacles. Persevering through hard times is one of the key components of every super affiliate’s success.

2) Perpetual Motivation

No, not from the external sources, but rather — from within. Successful affiliates exhibit high levels of self-confidence (which reflects deep psychological and professional maturity) and inherent motivation. This inherent motivation is also perpetual. From what I can see, they are gathering their inspiration from continuous self-improvement (through reading, study, on-going testing and enhancement), which, in its turn, contributes to their growth (both psychological and financial).

3) Progressive Marketing

Having discovered that The Weather Channel offers fishing forecasts, I have decided to test the system’s accuracy and went fishing this evening. It was raining (I normally don’t catch any fish when it’s pouring), but I was willing to give it a try as the forecast stated that this evening was an excellent time for fishing. After over a dozen of casts in the location where I normally catch fish, and not a single hit, I remembered what James said when teaching me to fly fish in Scotland. He said that one of the keys to success is in practicing “progressive fishing”, or moving along the river’s/lake’s bank when casts in one place do not yield results. Sure enough, with the progressive method, I finished my today’s fishing with 16 crappies and a largemouth bass in my bucket!

Super affiliates practice exactly the same method in their marketing. When something doesn’t work, they do not give up (read the previous two points), but move along trying new ways and methods. When they find the ones that do work, they replicate them, but do not stop at it. They are progressive marketers. So, sifting through the things that do and do not work, they are building a solid system of an ongoing revenue stream. It’s not as easy as some are trying to portray it. But it is doable, and I hope that the above three points will encourage you, and help you in conquering the heights of affiliate marketing.

As I was watching a video by Gerhard Gschwandtner of SellingPower.com, where he was talking with Seth Godin about mediocrity and the mindsets that winners have, I was once again reminded of what makes “super affiliates” stand out.

So many affiliates want to become super and win big, yet so many settle for being average and, consequently, never reach the desired goal. Godin says that “the big win is when you refuse to settle for average or mediocre,” because “mediocrity is for losers.” You want to make sure you stand out, and only then you will get talked about by customers, and “communicate emotion and trust” (which should be your ultimate objective).

Godin says:

What you do as a salesperson is you communicate emotion, but you can’t communicate emotion and trust to someone if they are not listening. And the only people who are gonna listen to you are the people who were pre-sold on you, ’cause some told them about what you do and how you do it.

Here’s the video:

As an affiliate, you want to concentrate on something, and do it consistently and to the best of your ability. Be innovative (look at what you do through your site’s visitors’ eyes and minds), passionate and persistent! And when you reach good results with one campaign, don’t settle down, but start another one (following the same principles of communicating emotion, and building a loyal following through trust). Using the analogy of skiing, Godin concludes that “what great salespeople do is not get through one dip and say ‘I’m done, I’m going to the beach’. They look for the next dip, because that’s all life is — a series of dips; that’s why we’re here — to go through the dips.”

I was researching more on motivation in the course of the day today, and at one point while I was reading Frederick Herzberg’s article “One More Time. How Do You Motivate Employees” (Harvard Business Review, Jan. 2003) I realized that making all things go right within any given affiliate program — having a 100% affiliate-friendly website (without “leaks”, with well-converting wisely-formatted landing pages, etc), running ongoing bonus campaigns, providing performance-based commission increases, satisfying every possible creative need affiliates may have, providing a well-categorized detailed product data feed, etc, etc — has little to do with real motivation of affiliates to perform for your affiliate program. Speaking of people management, Herzberg wrote:

…things that make people satisfied and motivated on the job are different in kind from the things that make them dissatisfied. …even if managed brilliantly [environmental factors] don’t motivate anybody to work much harder or smarter. People are motivated, instead, by interesting work, challenge and increasing responsibility. These intrinsic factors answer people’s deep-seated need for growth and achievement. [bold font added by me]

In our context, ensuring that nothing is wrong with your affiliate program, and providing an overall affiliate-friendly environment is no recipe for motivation. Herzberg stresses that neither are “compensation and incentive packages” motivating enough for people. He says that a manager “can charge a person’s battery, and then recharge it, and recharge it again,” but “it is only when one has a generator of one’s own that we can talk about motivation.” [bold font - mine] And again, those normally called “super affiliates” come to mind. They do not need much of outside stimulation. They are prone to growth, learning, continuous advancement, and internal recognition.

With other types of affiliates (at least, before they are grown into super affiliates), you do want to be a “battery charger,” but even with them — do everything possible to cultivate the above quoted motivators within your affiliates, and lead them to a point where they are mainly motivated intinsically (by interesting opportunities with the affiliate campaigns you run, and growth to greater achievements).

Jeremy Schoemaker’s recent post which included definitions of what super affiliates are, with its link back to his September Twitter poll on the same topic, encouraged me to entertain the question of super affiliate definition in my own blog.

As an affiliate program manager, I would define super affiliates in terms of the following three characteristics:

1. Maturity. Super affiliates always manifest high levels of professional, and psychological maturity. They are able, and confident in what they do.
2. Potential. One such affiliate can turn a whole affiliate program around. From what I have seen in the programs I manage, and also in the statistics reported by other OPMs (outsourced program managers), it is not unusual for 1-3 such affiliates in the program to be driving 50-70% of all affiliate program’s sales.
3. Income. They are steadily making at least five figures a month in gross profit, and can easily afford not to work anywhere else.

The “preferential treatment” I have seen mentioned by someone cannot be a part of the definition. It is rather a consequence of super affiliates being what they are. Also, personal traits, presence or absence of personal or professional blogs, public appearances or lack thereof, are not characteristics, but rather individual peculiarities tied to concrete objectives of concrete super affiliates.