The 6 Most Important Questions to Ask in Your Affiliate Agency RFP

Most request for proposals (RFPs) for affiliate program management include a laundry list of questions. Everything from “what’s your team structure” to “what processes and procedures do you have in place for compliance monitoring.”

It’s not that these questions aren’t important. The issue is that, if the questions aren’t pointed or substantial enough, it’s too easy for vendors to hide serious deficiencies or risks behind a general, well-written response. In fact, many agency RFPs encourage creating writing, which can obscure answers about the stability and scalability of the prospective partner.

The intended goal of an RFP is usually for advertisers to not only get a clear sense of the services being offered, but also the quality of those services.

If you are a fast-growing company or enterprise brand looking to hire an Affiliate Agency to manage your affiliate program (especially a global program), the questions below—and the corresponding answers to them – will help you separate the wheat from the chaff and ensure that you’re selecting an Affiliate Agency partner who will truly deliver for you.

In fact, you probably should be asking these question of any marketing agency you work with.

Question #1 – What percent of this project/engagement will make up your total revenue?

The answer to this question can help you quickly determine how big the agency is and, in turn, how risky it may be for them to take on your business.  In professional services, if a client is making up greater than 15-20% or more of an agency’s revenue, there can be significant enterprise risk for the client.

An agency that takes on an account that is a large percentage of their revenue may be forced to scale quickly. This rapid build-up can put a strain on cash flow and quality as there is pressure to onboard people fast. In addition, this may also indicate that they have other clients who make up a significant portion of their revenue. If/when one of those clients leave, it can quickly cause financial strain and instability within the agency and often results in layoffs.

Question #2 – How financially healthy is the agency?

While percentage of revenue is one important financial metric, the overall health of the company is equally important and very often overlooked. Here are a few questions that can help dig into an agency’s financial health.

  1. Has the company been profitable or had positive cash flow each of the past four quarters? If the vendor has struggled to be profitable, they could be looking at your business to help them get out of trouble.  If the agency doesn’t want to share financials, their accounting firm can certify this for you.
  2. Does the company have a line of credit in place? This ensures the company has access to sufficient working capital and has a good banking relationship. Companies generally cannot get equity lines without proper reporting or profitability so this demonstrates strong financial practices.
  3. Does this company have a clear process to separate client’s advertising dollars from operating capital?  There have been many nightmare stories in the past few years of agencies mingling client funds and agency fees and using client money to fund their business. Advances paid for advertising spend should never be allowed to fund the company’s working capital needs.

Question #3 – How many full-time affiliate management staff do you have and how many programs are you currently managing?

This question – like the one above – speaks to whether an agency currently has enough experienced professionals on staff to properly manage your program.If they don’t, they’ll likely be scrambling to hire affiliate account managers, and good ones are extremely difficult to find.

Or, they might be just stretch their current team even further. The answer to this question can also provide you with a sense of the resources they dedicate to accounts.   If they manage 12 other programs but only have three full-time affiliate managers, you may not be comfortable (and shouldn’t be!) with a single resource managing four other accounts.

Question #4 – What is the average length of client engagements or retention rate?

Do their clients work with them, on average, for three months? A year? Five years? With this question, you’re looking to see whether the agency has a track record of establishing, maintaining and nurturing long-term partnerships.

There are many agencies who have brought on a large number of clients but only work with them for a year or less.  Anyone can sell something once, but do clients come back?

Question #5 – Are all your affiliate program account managers full-time employees of your company, with employment taxes and benefits?

If you’re paying a US company to manage your US-based affiliate program, then you want to ensure that the team members who are overseeing your account are not part-time or full-time independent contractors (a practice that is illegal, but common). You also want to make sure they are not being outsourced from another country

If either of these is present, perhaps affiliate management is not a core competency of the agency, or at least not one they’re willing to bring in-house for long-term development.  What’s more is that employees without access to benefits or health care are likely to be looking for a company who can make a bigger commitment to them, which affects turnover.

Question #6 – What’s the average affiliate experience (in years) of your senior affiliate account management team?

Strategically and effectively managing an affiliate program is quite nuanced and complex. It’s also not (currently) a marketing skill-set that’s taught in higher-education. Since most affiliate account managers and directors learn the ins and outs of affiliate marketing program management through either trial and error or on-the-job training, they may not have the high-level expertise or experience required to meet the needs of your program.

Acceleration Partners is the only agency that has a formalized in-house training program to teach digital marketing professionals how to be an effective, strategic and efficient account manager before they take on managing an account. This helps ensure that a “trial and error” approach to program management is not taking place within your program.

BONUS RFP QUESTIONS

International

  • Does your company have legal entities or proper registrations in each country of service and operation? This is an easy one for many agencies to bluff or stretch the truth on. You want to ensure that they are set up as a business in the country you’re looking to operate in and are using employees and not contractors.
  • You have an office in X country, but do you have active affiliate managers there?Some large agencies will show an impressive global office footprint, however there aren’t actually any active affiliate managers in that office. Their approach is to hire the team after the account is won – people who may not have industry experience or local relationships.
  • Are you able to manage multiple international networks as a single program?  If so, please explain.

The international affiliate space is complex, with a multitude of different networks, technologies, partners and systems.  Agencies must understand how to bring all these pieces together to create a single, comprehensive program and have the technology to integrate reporting from multiple networks.

  • Do you have language support systems in place and/or local language resources? If yes, please explain.

You’re looking for real support here to ensure that communications to your partners will be clearly understood. Google translate does not suffice and should not be used for your newsletter communications and updates to your partners.

Publisher Development

  • Do you maintain your own CRM of publishers or do you rely on third-party networks? Publishers come in all shapes, sizes and specialties. In the affiliate space, most agencies haven’t invested in technology that enables them to house, manage, collaborate with and optimize all the information on their publisher partners in one place, something that can be extremely valuable to an affiliate program especially as more unique relationships are brought into the industry. Likewise, non-compliant or flagged affiliates need to be documented and known across an agency to ensure they’re not entering your program.

When you solicit proposals from agencies to manage your affiliate marketing program, you’re likely to get numerous responses back, which can be overwhelming. Many of these will paint a picture that is far more form over function.

To quickly whittle your list down, start with these six questions and then craft additional questions that address the attributes that you want and need in a program management partner.

 

 

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