July 24, 2006
How To

Behind the Scenes with a Five-Bar Affiliate -- How Merchants Can Improve Program Results

SUMMARY: ''Most mid-tier affiliate programs could do much better,'' says Joe Raffetto. Raffetto is a Commission Junction Five-Bar performer as well as a Digital River affiliate network all-star, so he knows what he's talking about.

Discover what he revealed to MarketingSherpa on:

-> How to recruit top affiliates

-> What should be in your email newsletter to affiliates

-> Three Best-of-Breed merchants to emulate

Here's our exclusive Q&A:

Joe Raffetto, CMO Backslash Agency, shies away from being called a "super affiliate," but he's definitely one of affiliate marketing's rock stars.

Specializing in microsites and search marketing, Raffetto is in the much envied league of top Commission Junction publishers and has presented the top affiliates POV at Digital River conferences. He's marketed everything from apparel to mortgages to Wall Street Journal subscriptions online.

In the midst of almost ceaselessly ringing phones this past Friday, he agreed to answer MarketingSherpa's top questions on what merchants need to know to improve.

How can new affiliate programs get attention from top affiliates?

Merchant-side competition for top affiliate's attention is fierce because there are only a few hundred top affiliates, compared to thousands of merchants. Here are Raffetto's recommendations:

#1. Recruit strategically by specialty

Many merchant programs still set volume goals -- measuring success with sheer numbers of affiliates. However, most merchants we know (and Raffetto agrees with this) say that only 2% of their affiliates perform tremendously well.

Raffetto recommends merchants focus on strategic recruitment instead. Start by viewing the entire range of Net marketing for your offering, including:

- Major search engine PPC
- Tier B and secondary search engine specialists
- Niche content publishers with strong followings including top bloggers, newsletters, and SEO microsite specialists
- Shopping review and comparison sites
- Couponers and discounting sites
- Contests, sweeps and related publishers
- co-registration and consumer lead generation specialists

Then recruit the top people you can from each of these, along with a healthy helping of mid-tier affiliates. Offer them commissions, content, and performance incentives that match their specialty.

And remember, you're not building a mountain of affiliates; instead you're putting together a team of specialist publishers.
(Tip: think of affiliate recruitment as you would a media buy for a launch.)

#2. Start with personal outreach

You're asking top affiliates to consider dedicating their valuable time and cash to test your campaign, your offering. If it fails, they're out of pocket.

So, although like stock market pickers and journalists, top affiliates are *always* interested in "new, undiscovered" offerings they can get in on and do very well with before the rest of the world piles in, they're cautious. A generic emailed letter that obviously was sent to every webmaster in the world will not catch their attention. What will?

"Try sending a one to one email to CJ's top performers," advises Raffetto. "If you send a good offer -- 15% when everyone else has 10% -- and a lot of tools, that will definitely get my attention." In fact he says remarkably few merchants ever do reach out one-to-one via CJ's email tool.

Once the relationship has begun, don't rely on email alone to build it (unless that affiliate has purposely told you to keep it that way.) Top affiliates can be worth hundreds of thousands in business to you (or more) per month. Don't you think they each deserve a personal phone call?

Plus, Raffetto says the most respected merchants will arrange regular in-person meetings, generally at industry trade shows. "Face to face is what works." And yes, they'll pick up the tab for their top affiliates' trade show tickets and sometimes travel while they are at it.

#3. Be ready to be judged in 72 hours.

Once a top affiliate has agreed to trial your program, they can usually get a campaign out in speed that would make most merchant's heads spin. "My turnaround could be a couple of days … no more than a week," notes Raffetto.

Affiliates are metrics-focused, and swift to make go/no-go decisions while the test is on. They don't want to throw one cent of good money after bad if it looks like your program won't perform as expected. Depending on their specialty, your program could be dropped from their list in hours, days, or a few weeks.

So, don't bother to recruit top affiliates unless your program is worthy of that level of harsh scrutiny. Your landing pages should be pre-tested (A/B if not multivariate), and your content and creative ready to roll.

Also, you must give affiliates clear stats about your "hockey stick" if you are the type of merchant with revenues that vary depending on time of year. Let them know how much they can expect to make over the holiday season if they get started now in the off season.

#4. Hire a dedicated staffer (or several)

If you don't think affiliate marketing is really worth investing in, your prejudice becomes a self-fulfilling prophecy.

You can't dump affiliate marketing onto the search and email department's desks as an add-on. "Merchants would do much better if they just dedicated the resource bandwidth and time to their program. They don't understand the power of affiliates, so they don't grow their programs," notes Raffetto.

What affiliates really want -- tools, content, great offers,

Which merchants do affiliate marketing right? Raffetto's top three are (in alpha order):

- eBay
- RealNetworks
- Yahoo!

What makes these so special? eBay in particular gives affiliates the best group of tools out there, including API data feeds, customer destination links, and a site editor's kit that helps you make your site an eBay click factory.

RealNetworks is also known for its data feed and a deep linking tool that helps affiliates link to their choice of more than a million songs. (Now that's a long tail.)

Yahoo's team is known for offering relevant coupons and a continual stream of new promotions to get affiliates excited.

What to put in your affiliate newsletter

Raffetto definitely appreciates a monthly newsletter (in addition to personal communication) from each merchant he does business with. The newsletter might include:

- 30 day warning on new promotions coming up so folks can prep

- Real-life stories of other affiliates who are raking it in (proves this program is working and worth investing in)

- New creative download links

- New content offers and product notes

- Personal contact info for the merchant team, including a hotline if there are troubles with the data feed.

- Contests such as a bonus if you increase performance by a certain amount over last month.

Best practice? Use email tech developed for B-to-B field sales teams to add a unique personal note introducing each issue for your top affiliates. Your personal note could include specifics on how they get an even better deal (higher commission, special search terms, etc) than the rest of the hoi polloi who just see the regular newsletter.

As Raffetto notes, 'I like that personal touch."

Useful links related to this article:

Commission Junction

Digital River

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