The Rules of Affiliate Relationships : Under30CEO The Rules of Affiliate Relationships : Under30CEO
arrow
Join the Under30CEO Community We deliver tips, tools and inspiration for your business. Daily to your inbox.

The Rules of Affiliate Relationships

| October 27, 2012 | 0 Comments

Whether you’re in the midst of the dating game now or have been out of it for years, we all know how much good can come from a positive, healthy relationship.

The same goes for the business world. There are millions of fish in the sea in terms of potential affiliates for your company, and it’s your job to seek them out. Once you find “The One,” your company will thank you.

Know What You’re Looking for

It’s important to first decipher the difference between an affiliate relationship and a partnership. You’ve got to know what kind of relationship you’re getting into before you jump in, right?

Defining aspects of an affiliate relationship include:

  • The affiliate acting as a promoter for your product and earning commission for your sales, very much like an independent salesperson who operates on a commission-only basis, and
  • The affiliate sending traffic to your website to sell a particular product or service you offer, earning commission if a sale or other transaction results.

To put it in perspective, let’s pretend we have a financial advisor who posts content on his website, providing information about a variety of different mutual funds with a link to a fund he recommends. If a visitor clicks on the link provided and then invests in a fund on the site the link directed him to, the financial advisor would earn a commission on that sale.

Partnerships differ a bit in that they often involve technology sharing, product development, and product licensing. Affiliate relationships tend to focus on just one of those aspects.

Find Your Match

In the dating world, we all have our types. We know what qualities we like in someone we’re interested in pursuing – and which qualities we don’t like. Like dating, the same should apply to selecting a business relationship. But unlike dating, you don’t have to limit yourself to just one relationship at a time.

Affiliate relationships are not mutually exclusive, like other types of business relationships. You’re never going to be forced to choose whether you want an affiliate to promote the sales of your products or a partnership to fill your company’s other needs.

Likewise, it’s important to remember that your affiliates don’t have to remain exclusively faithful to you. Affiliates are free to promote other products, and you are free to have other affiliates promote your product as well.

Set Some Ground Rules

Just like you wouldn’t want your significant other sharing secrets about you with other people, you need to maintain a similar relationship with your affiliates. Typically, affiliate relationships are governed by an agreement that stipulates the types of promotions the affiliate can and cannot use to promote your product or service.

For example, Wal-Mart might say that no one but Wal-Mart is allowed to use its brand in its promotions, in order to avoid inappropriate use of the brand name. Oftentimes, larger brands will want to audit an affiliate’s web presence to ensure the affiliate is of sufficient standing to excel at representing the brand.

Usually, affiliate agreements run for about a year and tend to be renewable.

When It’s Time to Break Up

Like any relationship, sometimes it just isn’t meant to be. Affiliate relationships are not unique in that they can go awry, and often do. Red flags that might indicate it’s time to jump ship include:

  • The affiliate sending unqualified traffic to the website, resulting in wasted bandwidth and depressing the earnings-per-click of the product, making it look less attractive to other affiliates, or
  • Unscrupulous affiliates who advertise the product in an inappropriate manner.

Let’s say you’re an automobile manufacturer, and your product appears in a banner advertisement on a pornographic site. Needless to say, your brand image has likely been damaged a bit in the eyes of your intended customers (although you never know who’s buying cars these days!). In other words, don’t get into an affiliate relationship with just anyone.

When You’ve Found “The One (or Ones)”

Let me tell you – finding the right person is one of the best feelings. Plenty of successful affiliate marketing campaigns have actually put a particular product or brand on the map, or paved its way into the public consciousness.

Your company could follow in the footsteps of a desktop software manufacturer that was struggling to compete with established brands like Webroot, Norton, and Symantec. The company found a few affiliates who turned out to be keepers; together, they put on a compelling affiliate program. As a result, in three years, they were able to generate sufficient sales to go head-to-head against the global brands – all without the initial upfront investment normally required to build a brand of that stature.

It sounds like a dream, doesn’t it? Trust me when I say that it’s a dream that has the potential to come true. By pursuing strong relationships and dumping weak ones, your company does have the power to turn heads in the marketplace.

Dush Ramachandran is the founder and CEO of The Net Momentum. Dush was most recently Vice President of Sales and Business Development at ClickBank, the world’s largest retailer of digitally downloadable products. During his six year tenure at ClickBlank, he was responsible for growing revenues of the company significantly and making it the digital product powerhouse it is today, mainly through building strong and trusting relationships with the largest affiliates and vendors in the industry.

About the Author:

Opt In Image
Awesome People + Awesome Places
Travel around the world while making new friends

Under30Experiences curates awesome experiences around the world for young travelers.

Tags: , ,

Category: Startup Advice