The Seven Keys to Success for Affiliates

By Declan Dunn
Posted Wednesday, August 11, 2004

Affiliate programs may seem an easy way to sell. The problem is, most people focus on a one shot sale. They spend all their time chasing new customers, trying to sell them, and then forgetting about them. Without a good sales process and target marketing, sales will not be high. Without generating traffic to your site, you will not sell at all. If you do not follow up with your loyal customers who have bought (talk about a sign of trust), you are wasting your time and money.

The statistics prove this out; first time sales will generate, at best, a 30 purchase rate. That would be an
excellent result; most often it is between 1-2%. That's one sale per hundred visitors!

Repeat sales to a loyal, buying customer base is much better; statistics show that customers who have bought once will respond much better to your offer, more like 20-30% purchasing. That's 20 customers per hundred compared to one per hundred. Remember this statistic as you market.

Someone who buys from you once is more likely to buy from you again and again. Make sure you treat your customers with respect and build up your list of customers. This is the most crucial part of your business. Affiliate programs give you multiple products to offer your customers, but make sure you take the same common sense steps you would in the real world.

Becoming an affiliate for other Web sites' products and service is a great idea if you take the right steps. The following are things to look for, and ways to plan out what you are about to do.

Sell One Thing and Sell it Well

Web flea markets don't work for the most part. The Web is a virtually free publishing medium that allows people to offer anything quickly and easily.

This is also the weakness of this "free" distribution system called the Internet. It is free in terms of printing
costs, but not in terms of time. A Web Site with tons of products and services is a tricky venture to succeed with.

For example, most people have 3-4 books in mind when shopping. Why would you approach them with 3
million titles? The same logic applies to what you are offering.

Focus on a few good products and sell them well.
So many Web Sites try to offer everything under the sun; this approach is confusing and has never proven to be a good basis to sell. Focus on a few products and sell them very well; then follow up to offer other products and services.

Think of it this way; if you have ever been in a restaurant with children, you will notice that waiters
often approach them differently. Instead of showing them a whole slew of choices on a menu, they point the children to one or two choices. The parents are happy, and the child can make a simple choice. Apply this same approach to your Web Site; focus your visitors on just one or two products, and sell them very well. Do not confuse the issue by trying to sell them everything on one visit. People simply do not buy things that way.

Get Good Profit Margins

Amazon.com is the leader in affiliate programs, which is surprising. They pay 5-130 per book. Books are often sold for less than $20.

At best, you are working for tips like a waiter, at $3.50 a pop. Unfortunately, if you do not have a busy restaurant, this deal will yield little or nothing.

Let's say you want to make $1,000 a month; you would have to sell 286 books to reach your goal. That is a huge volume.

Now compare that to a $50 book; your best case scenario becomes $7.50 a book. You now have to sell 133 books to reach your $1,000 goal.

Believe it or not, it takes the same effort to market the cheaper book as the more expensive one. Do your math and see which products sell the best, and remember to lead with an entry product that is not too expensive, and follow up with the more expensive products later, after you have built up the trust and name recognition needed for a more expensive purchase.

Don't just Display a Banner Ad and hope for the Best

Many affiliate programs put up banner ads; the visitor simply clicks on the banner ad and goes to the company's Web Site to make the buying decision. The problem with banner ads is that 1-2% of people will actually click on them; so if you generated 1,000 visitors in a month, only 10-20 will even click on the banner ad. If you even convert 30 of those to sales, you will make only one or two sales a month.

It is all a game of numbers; if you have a site with great traffic, this can change. But volume businesses are
difficult to profit from; the bottom line is, do more than just put a banner up at your site.

The same logic applies to posting at newsgroups; because it is so easy to post to many newsgroups, people believe that volume will generate results. The results have proven to be awful; mass newsgroups postings, like bulk email, are dangerous and rarely yield the returns. They are more a headache than a benefit in most cases.

Use Content, Updates, and Keep your Site Consistent

Remember that you are selling a product or service; you are not just posting an advertisement at your Web Site. Use content to enhance what you are doing. Amazon.com encourages this in their reseller's program; you are urged to review and recommend specific books for your target market. If you just send people to Amazon's Web Site, you get a smaller percentage of the sale.

Amazon.com had the right idea; a product recommended to a customer is more effective than a million titles at your Web Site. A consumer likely has 3-4 titles in their head when they shop; point them to the right ones.

Give them a zillion choices and you confuse them. So keep updating your site, keep it consistent, and try to emulate the page that you will be linking to. If it changes, it tells the customer they are in a different retail space.

This may affect their purchase decision; anything that takes them notice a difference can interrupt their impulse to buy. Keep your customers comfortable and within the same purchase decision.

Target your Market

If you try to sell to everyone, you will sell to no one. It is that simple.

It is amazing how people do not target their market. They try to sell everything under the sun. Once again, it is the illusion of a volume business. If you think this will succeed, go down to your local retail store. Look at the small profit margins they have to deal with. Retail is a brutal game. My friend Jonathan Mizel has a great saying; sell expensive products to rich people. More importantly, target your market and make sure they can afford what you have to offer.

And make sure you can afford to live on what you will be earning.

Market Your Site

The bottom line is that you will have to market the site and the offer. If you just put up a number of affiliate
programs, hoping one will pull, you are taking the magic dust approach. It is like the lottery; you may win, but the odds are against you. Take the responsibility to market and promote your offers; find out where the customers are and drive them to the site.

By many estimates, you will have to generate 500 visitors a day to make decent money; that's over 15,000 visitors a month. Your minimum amount of visitors should be 5,000 for a successful program; it is simple a case of math.

One percent of 5,000 is 50; can you make enough money on 50 sales? Not if you are making $2 a book at Amazon.com. But if you are making $25 a sale, you could make $1,250 per month. Keep your expectations realistic; realize that marketing and sales are a numbers game. Know the numbers you hope to generate and focus on those affiliate programs that give you the best bang for your time and effort.

Take Precautions to Make Sure you Get Your Share

Like any business, check out what is going on. Affiliate programs are simply your chance to resell other's products and services. Make sure you believe in what you are selling.

Take the same precautions you would in the real world; what will be your investment in time, and money? Have you actually tried the product or service? A personal recommendation and belief is much more powerful than selling something simply because it has a good profit margin.

Are you just generating leads for someone else? I have seen affiliate programs that have no intention of paying you for what they are selling. One client had to wait six months after making tremendous sales for a company to simply get paid his commission.

Make sure you get paid for what you sell. Often this means waiting 30 days for a monthly check. Sometimes it means quarterly payments, like Amazon.com does.

Declan Dunn 6960 Ridgeway, Magalia, CA. 95954
Phone: (800) 280-9807 or (530) 873-3637 Fax: (530) 873-0192
Declan Dunn offers consultations, seminars, and training to Web businesses, developers, ISP's, and consultants. E-mail dunn@activemarketplace.com or call (530) 873-3637 with questions. All materials Copyright Michael Declan Dunn and ADNet International.
All Rights Reserved.