This can also be referred to as "things I know I should be doing but haven't quite got around to yet"!
Having been in the affiliate marketing industry, I've made many observations. I've watched enough people around me to work out what I'm doing wrong and can therefore explain why it is I'm not as successful at affiliate marketing as I'd like to be. As such, I thought I'd make this list which might help a few affiliates avoid making the same mistakes I have. Sharing is caring!
Firstly, let's look at the business model. Affiliate marketing (on a CPA basis anyway) works on the principle:
(Affiliate commission percentage rate per sale x value of the sale, usually less tax and shipping) x quantity of sales driven
A working example:
Say you earn the very generous 0.5% on electrical items some retails are offering. Assume the value of the sales is around £300 each (pre tax and excluding shipping) and say you achieve 10 sales a month. As such, each sale is worth around £1.50 to you so 10 a month equates to £15.00.
By understanding how each element can affect your affiliate business you can then determine what steps are required to boost your performance in several areas. Let's break it down.
Value of the Sale
- Usually quite rigid if you are a small-time affiliate. I've never had the volume of sales to negotiate a higher tier rate except on one occasion and thanks to new management that went by-the-by. Nevertheless, if you can negotiate a higher commission rate you would see more income per sale.
- Alternatively, why not consider involving more merchants and focussing on the higher paying ones. Generally, as a rule of thumb, the more well-known the brand, the lower the commission rate as it is easier to generate sales. Similarly, a lower commission rate generally indicates easier conversions whilst high commission rates generally indicate a more expensive and thus difficult product or service to convert. One word of warning though, too many merchants risks diluting your efforts and confusing your visitors losing sales rather than securing them.
- Another idea is to spread your eggs. Focussing on one niche is all good and well but you need to be prepared to hang on to the roller-coaster you are riding, as if all your eggs are in this basket, you'll need to be prepared to take the rough with the smooth. Of all the successful marketers I admire have one or two main sites but a handful of smaller niche sites "just-in-case".
Quantity of Sales Driven
- By focussing on higher paid products, you could help to boost your income though, as above, higher priced items can be more expensive to convert. That's not true in all cases as hot tech is usually easier to sell based on sexy images and lust. The Apple iPad 2 will undoubtedly be selling like hotcakes, although I do believe merchants expect this and have paused paying out on such sales until the hype dies back a little.
- Stepping up your efforts by promoting the next product up might be worthwhile. Instead of advertising a value HiFi stereo system, why not try advertising the mid-range systems alongside? Just remember to consider who your audience is as this might not be a smart move if your primary target market is thrifty money saving customers on very tight budgets. That said, if you are actually attracting affluent shoppers then you might be losing sales on that side of things. It's all about balance.
- Upsell. Cross-sell. Sell! Not all merchants have websites that recommend similar or related products. Sometimes this is deliberate but more often than not, there may well be opportunity to cross sell. For example, say your website is about the Baz Luhrmann film “Romeo and Juliet”, a modern day adaptation of the classic Shakespeare tale. You've got character biographies and a story synopsis and are plugging the DVD. There's room for improvement though. There's a Blu Ray version you could advertise and also a CD soundtrack. There's also the original Franco Zeffirelli 1968 adaptation that's available on DVD that true fans would enjoy watching too. Then there are the books, from the original classic to guide books (intended for students) that help explain the themes in the story. Beyond that, you are catering for William Shakespeare fans so linking into experience day vouchers to tour the Globe theatre in London is a logical step. By exploring the possibilities, there are so many options that can be discovered without diluting the content of your site too much. Done well it will enhance your site.
- Get more traffic! Simple enough to say but far more complex to achieve. I still haven't found the answer to this one but I believe there are several aspects to it:
- Use PPC to help drive more immediate traffic.
- Become authoritative, issuing press releases and try and get these picked up by mainstream media, social networking sites, etc. Keep an eye out for news about a few major affiliate sites and you'll often see press releases popping up here and there, usually on the back of a poll that has an intended outcome (e.g. 88% of Britain's find that saving money online is easy).
- Become social and try and set up Facebook and Twitter accounts around your brand, either specifically (i.e. a corporate brand) or as a genre (i.e. Fridge Freezer Lovers) fostering support for a general cause but also your brand on the side.
- Get better traffic. You need to understand the value of your traffic and the importance this plays in generating your average CPC rate. The rule of thumb that I use as a base is 10%. I expect that 10% of my visitors will click through to a merchant and of those 10% will buy. As such if 100 people visit my site, 10 are likely to click and 1 is therefore likely to buy. That's not true of all sites, and some of mine perform better (and even worse) than this. Knowing this means you can work on driving more pre-qualified leads to your site and you can also help filter the quality of traffic sent onwards to your merchants. This is quite contentious as some people would say send over loads of traffic as cookies will be dropped and there's a chance of a sale. However if you can pre-qualify a customer and direct them to the most suitable merchant, couldn't it be argued that they are more likely to buy?
- Build a community. For me, this is where the pinnacle of success really lies and is how most of the larger affiliates seem to operate. Most successful affiliate sites I know are based around a forum, a massive mailing list, or both! By building strong loyal support for your site through whatever means you see fit, you should be able to develop your site into a superpower. Larger affiliates are better suited to negotiating better commission rates (and can unlock hidden rates on some programmes). They are also able to negotiate various terms thanks to their size. These sites tend to focus on a particular niche or activity and tend to do one thing really well. Due to their size they are able to help create a buzz about specific products and can usually drive large volumes towards a particular retailer or around a particular product. They usually cater for a wide range of people and generate conversions on the back of particular actions. Such sites can also be self-fulfilling when it comes to traffic. Once you have a decent amount of loyal subscribers, word-of-mouth means your visitors will help find you new ones, plus your growing brand reputation will help keep the momentum going. As this happens, you'll be getting better quality, pre-qualified traffic to your site which will infinitely help.
This is by no means a full and comprehensive list, it is simply a list of observations from my own affiliate marketing efforts and I'm sure other marketers would disagree with some of these. It's more-or-less a list of things I know I ought to be doing but fail to do, thus helping to explain why I'm not making millions thousands just yet :-P
Thank you to all previous commenters.
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