Solving the Affiliate Management Gap

BusinessmanCrevasseThis article was originally published in Multichannel Merchant.

For retailers, e-commerce is the bread and butter of any digital strategy. The acquisition of new customers, retention of existing patrons and the harvesting of sales revenue make up the lifeline of a healthy company. But for small-to-mid-sized merchants with the pressure to increase sales quickly with a limited budget, driving these results can be a bit of a challenge based on the minimum costs and level of effort it takes to run a channel properly.

Smaller retailers have been particularly challenged with running a quality affiliate programs, an important component of most modern marketing strategies. As a result, affiliate programs have been largely limited to retailers of substantial size with deep pockets to afford a fully-managed program.

Small-to-mid-sized retailers missing out on growth of affiliate programs

With the potential to represent 5-15% of online sales and performance based payout structure, affiliate marketing has proven to be a must-have part of the digital marketing portfolio for retailers looking to grow their online sales.

Affiliate marketing can produce the very results a small business needs to be successful, namely exposure to new audiences, incremental sales and overall brand awareness. For cost-conscious young ecommerce businesses, affiliate marketing is especially attractive, because unlike pay-per-click advertising, which charges retailers every time someone clicks on a link to their site, affiliate marketing costs nothing on a per transaction basis unless there is a sale. And the most successful programs don’t just grow sales. They grow a team of brand ambassadors who take awareness and recognition to the next level.

Yet there are baseline costs to managing the affiliate channel and finding quality management that is affordable. Retailers operating on limited marketing budgets often can’t dedicate anyone internally to manage their affiliate program or they outsource it to a small agency that charges very little and does a commensurate amount of work due to a high program to staff ratio. The result is they don’t have the time or know-how to recruit new affiliates or ensure fraud and brand protection – a must have for any successful affiliate program.

This hole in the market has really hampered the success of affiliate programs with small and emerging brands. Unable to compete on level ground, they’ve been forced to settle for cheap, low-quality management that results in ineffective strategies and, in turn, restricted growth and satisfaction.

What to look for in a high-quality affiliate marketing program

Recently, new management services like RAMP, coreOPM, and rewardStyle have emerged to bridge the gap for retailers who want to develop a quality affiliate marketing program but don’t have the resources to justify hiring a bigger agency. Access to a quality program management is unchartered territory for small companies, so knowing what to look for is key.

An ideal affiliate management program designed for smaller merchants needs to find a way to help recruit and nurture a large number of affiliate relationships, while also supporting brand integrity. It’s about providing value in a scalable way, not just hitting a price point with a low effort solution. By combining access to leading publishers with expert strategies from larger programs and having vertical specialization, smaller retailers can finally grow strategically without breaking the bank or wasting their money.

To determine whether a given solution will generate meaningful results, companies must ask the right questions. Does the program offer constant recruitment of new affiliates? Will there be a focus on new-to-file customers? Are there additional newsletter, data feed and coupon tools? Does it ensure fraud, brand integrity and compliance protection? Will this affiliate management solution and/or platform allow the program to grow into a larger affiliate program at the right pace?

This new era of affiliate marketing management provides an avenue for retailers of all sizes to reach more customers. Younger ecommerce companies or seasoned retailers with smaller programs can increase customer engagement and conversions with the same vigor and support retail’s most recognizable names have had for years.

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