Affiliate programs are getting a new look as top brands witness the impact a successfully managed affiliate program can have on customer acquisition. Despite its checkered past, the affiliate marketing industry is starting to turn the corner on reducing fraud and increasing transparency. However most companies still do not have the right experience in house to manage a high quality affiliate program and many often turn to outside agencies for assistance.
Like any outsourced relationship, it’s important for merchants seeking to outsource their affiliate management to clearly outline the scope of work, particularly deliverables, metrics, tactical and strategic goals. It’s also critical to ask the right questions when screening and interviewing firms. Here are six questions that can help merchants determine if the firm they are considering has the staff, talent and best practices to create a strong, growing and profitable program.
1. What is your program to staff ratio? This is the age-old quality vs. quantity balancing act, but it surprises merchants to learn that some affiliate management agencies expect their account managers to successfully run 10-15 programs at once. Merchants that are truly committed to the success of their affiliate programs should look for a ratio no higher than 3:1. Heavy program loads lead to a “set-it-and-forget-it” mentality, and without consistent creativity, oversight and management, affiliate programs cannot be successful.
2. How is the team structured? A good rapport with the account lead is important, but not as important as the managers’ experience and skills. Beware of firms that lead with relatively junior staffers. The best day-to-day program managers are senior marketers with a strong track record of success. Insist on client references for other accounts the staffer/team is managing in addition to the agency’s reference accounts. Also, beware of agencies that do the “bait and switch.” That is, they court your business with senior executives, then staff accounts with far less experienced team members once contracts are signed.
3. What role does automation play? New solutions for streamlining affiliate program management can be very helpful, but they don’t replace day-to-day, hands-on program management. Just like other aspects of a business, relationships matter, and cannot be replaced with automation tools. Ask about how much of recruiting, fraud management and program reporting is automated versus custom for your program?
4. How will they handle recruiting? If an agency says they don’t need to recruit because they already work with top affiliates, merchants should dig deeper. The definition of “quality affiliate” can vary widely, but it shouldn’t. High-quality affiliates introduce new customers to brands, and should be topically related to the merchant’s program. Some high-quality affiliates may already be known, but it’s more likely that they need to be discovered – and as they become producers, they need to be nurtured.
5. What is your stance on coupon and incentives sites? These sites tend to influence program revenue and take credit for sales that also come from other channels. Coupon sites also usually represent the largest group of terms and conditions violators. It’s very important for merchants to know if and how they are to be included in the program. This will also have a big effect on the revenue projections for a program.
6. Who are you really working for? There could be conflicts of interest, and merchants need to be aware of them. For example, many affiliate networks offer program management, but who is the boss – the affiliate or the merchant? These networks are ultimately beholden to both, so will have competing interests. Ask the tough questions about any partnerships that could misalign the financial incentives of a program.
Hiring the right outsourced firm is always a tricky business, so it’s important to remember that an affiliate program is essentially a new sales channel, and each affiliate in the program is both a salesperson and brand ambassador. Since companies wouldn’t hire just anyone for these positions internally, it’s wise to do the research and ask tough questions before jumping into an outsourced relationship.