8 Mistakes to Avoid When Setting Up an Affiliate Marketing Program

Every month, hundreds of new affiliate programs are being launched. Most of them, however, aren’t meant to succeed, and not because there’s something wrong with affiliate marketing. The reason why many advertisers fail at affiliate marketing is rooted in the poorly done work when setting up their affiliate programs.

Having analyzed more than a thousand of affiliate programs in the past eighteen years, I’ve noticed that some of the deadliest mistakes are committed with unfortunate frequency. It is to eight of these mistakes (committed by advertisers at the setup phase) that I am devoting this post.

1. Launching Too Quickly

You’re eager to get it out there — for affiliates to start joining and promoting you and your products — and hit that “Go Live” button much earlier than the program is really ready. You’re thinking: “Oh, I’ll just launch this thing and work out the kinks on the fly.” Since the flaw of this way of thinking isn’t evident to some, let me illustrate my point with a real-life story.

Affiliate program preparations

A few weeks ago, I was flying out of Washington, DC which got hit by an unexpected snow storm. They kept delaying our flight — to clear the runway of snow, deice our plane, and perform the other routine tasks that the situation called for. Many of the already-boarded passengers were grumbling…

When we finally took off – with a delay of more than 90 minutes – I couldn’t help but wonder: would any one of us, who were unhappy with the delay, be happier if something important wasn’t sorted out before the take-off? Clearly, a rhetorical question.

2. Ignoring the Competition

When bringing a new product to market or conceiving an idea of a new business, analyzing the competitive landscape is a common-sense thing to do. Why, then, is this integral component so frequently missed from the affiliate program setup tactics?

To ensure that your new program really stands out (from the myriad of other affiliate programs out there), you must know what it would take for it to stand out. We recommend compiling a competitive intelligence spreadsheet and documenting every major element of your competitors’ affiliate programs. Your competitive analysis should study:

  1. Platforms on which they run their affiliate programs
  2. Payment models employed
  3. Payout structures (expressed either as a percentage of pre-tax and pre-shipping total, or as a flat dollar amount)
  4. Any differences in payouts for new-to-file vs returning/reengaged customers
  5. Performance incentives, bonuses, or tiered payout increases, if any
  6. Cookie life [consider this]
  7. Locking period [more here]
  8. Any indicators of their programs’ success (be it EPC, rankings, or anything else)

Don’t rush through this phase! Do a thorough work which will enable you to understand how to truly shine when your affiliate program launches and starts being to those of your direct competitors.

3. Casting Your Net “Wide”

Join many affiliate networks

There is a common misconception — especially prevalent among businesses that are new to the affiliate space — that the more affiliate networks they join, the better.

Let’s get one thing straight: affiliate networks are primarily technology platforms to handle tracking, reporting, and payments to affiliates. In the majority of cases, an “affiliate network” is not a “network of affiliates” that will start working with you as soon as you launch the affiliate program on that network. Affiliates from the network may join your affiliate program (if it stands out) but nothing guarantees their participation in it.

Furthermore, if you take American affiliate networks, for example, there is a significant overlap of affiliate pools between some of them (for example, between CJ and Rakuten Affiliate Network, ShareASale and AvantLink). So, adding a second affiliate network to the first will never double your affiliate base.

4. Copying the Big Guys

When setting up your affiliate program’s payout and cookie duration, do not copy the big brands, assuming that you would thereby replicate their success. Let me illustrate this using one of the world’s oldest and largest affiliate programs – that run by Amazon.com.

When Amazon’s affiliate program pays 4-5% commission at a 24-hour cookie life, it doesn’t mean you should copy this. Here is why:

  • 2.5% to 3% is considered to be a solid conversion rate for any affiliate program
  • It isn’t unusual for Amazon’s affiliate program to convert at 10% or higher [source]
  • The difference in conversion rate (between your online storefront’s and Amazon) should therefore be offset by an equal difference in the commission rate. Otherwise, many affiliates would prefer promoting a comparable product on Amazon, making more money from it

5. Missing Rules and Policies

When a brand accepts affiliates into a program that lacks rules or policies they are entering into business relationships without any contractual obligations in place. You wouldn’t do this in any other business context. Why, then, so many businesses make the affiliate marketing context an exception?

Here is a perfect example of an affiliate program whose “Terms and Conditions” field is just left blank:

Affiliate program setup mistake

Do you really want to give affiliate a carte blanche to market you wherever they wish and however they see fit? It sets your business up for one thing — trouble (especially when combined with the mistake that I list next). After all, when nothing is prohibited, everything is implicitly permitted.

6. Setting to Auto-Approve

Many new affiliate programs automatically approve all affiliates that apply into them. The main reason why auto-approving everyone is always a bad idea lies in the immediacy of consequences. As soon as an affiliate is approved, they get access to your links and can start promoting you immediately. But what if their promotional tactics are incompatible with your idea of how your business, brand, or product should be marketed? What if they start promoting you via email spam or cookie stuffing? What if your brand ends up on porn or hate sites?

Yes, affiliate marketing programs provide for the ability of reversing any unqualified or (even) fraudulent transactions. Just remember: the potential damage (that some rotten apples may bring about) could be irreversible.

7. Forgetting About the Driver

Just as any marketing campaign, every affiliate program must be managed.

Imagine setting up a paid search campaign. You put in your keywords and the respective bids, tying specific ads and landing pages to them. Then you enter your credit card to be charged for the clicks, and go live. What would happen if you left it to fly on its own: for a day, week, month, or even longer? You see where I’m going here… You could potentially drain a lot of money down the drain. Just as irrelevant keywords should be eliminated from your paid search efforts, so should unsuited affiliates never be approved into an affiliate program (or removed from it if they somehow got in). Just like you would prevent paid search ads from generating untargeted traffic, so should you monitor where and how your accepted affiliates promote your brand and product. I would even argue that with an affiliate marketing campaign the stakes are higher, because you are entrusting affiliates with the most valuable asset you will ever have — your brand.

Affiliate marketing program ship

Back in 2013, in an interview to a European affiliate network, I emphasized: “Just as a ship with a sleeping helmsman is doomed to crash, so is an affiliate program which isn’t being actively managed.” My opinion remains unchanged.

8. Failing to Recruit

I was lucky to enter the world of e-commerce at its very dawn. Back then, the mantra “If you build it, they will come” was often on the lips and minds of the early e-businessmen. With time, however, we had all learned that it takes much more than merely building a good website. There must be marketing, search engine optimization, advocacy, and other components of website promotion — for the customers to come your way.

Similarly, in present day, it isn’t sufficient to merely set up your affiliate program on a popular platform. Once the program launches, your affiliate manager must spend (a large chuck of his/her) time on identifying prospective affiliates to onboard, reaching out to them, and following up with them… all with the purpose of recruiting good affiliates that would market you and your product. Otherwise, your program is doomed to just end up with a lot of “thin affiliates” that add no or little value.

So there you have them: the deadliest mistakes to avoid when setting up and launching an affiliate program. If you have anything to add to these, please do so using the “Comments” area below. I’d love to hear from you and learn from your experience. Paraphrasing the wise Eleanor Roosevelt, to get to the goal faster, you must “learn from the mistakes of others” as it would make the path to success unnecessarily long and painful if you choose “to make them all yourself.”

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