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As a consultant
to merchants who want to improve their online sales, I am constantly asked
why they should start their own affiliate program, and what is the best
way to do that. The answer to the "why" part is the subject
of this list.
Since basically all merchants attempting to sell products via a Web site are going to spend money on advertising/promotion, they really need to know how an affiliate program fits into their overall sales effort. Advertising is a gamble. You can spend $2 million on a Super Bowl ad and the results can be zilch. The wrong choice of words, the wrong color background, or the wrong spokesperson can be disastrous. Beyond the minimal start-up costs, your major expense in an affiliate program is commissions. Since you are paying for performance, your costs are controlled as a percentage of your sales so you can predetermine the expense ratio. People are conditioned to ignore advertising. You have to be really good to get their attention, and even if you do, they may not believe your message. Affiliate programs make other trusted resources your partner. When another site recommends your product and sends its visitors to your site, it has partially pre-sold the customer for you. You should be able to easily close the sale after the choice is made to click to your site since people don't have the same level of skepticism as they would if they had come from just a plain banner ad. With an affiliate program, you can often have thousands of sites promoting your product within a very short time. How long would it take you to solicit and negotiate thousands of ad deals? And how many of those deals would result in sales? You can try to justify a failed ad campaign as "branding," but with an affiliate program you get the same benefit without the cost. There is a built-in exposure or branding value that comes from every active affiliate whether they generate a commission or not. With a properly designed affiliate program, your affiliates will do your advertising for you, assuming the risk and the cost in exchange for the commissions earned. Many affiliates promote the products they sell through these programs by either purchasing ad space in newsletters and search engines or by running ads in their own newsletters. So you get the ads in the form of a third party endorsement without the up-front cost. I hope the above list gives you new reason to evaluate your business with an affilate program in mind. Maybe next time I'll get into the "how" part of the question. For now, you can either go to my site for further info or see http://www.roibot.com/w.cgi?R344_CJ About
the author:
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