Limited Potential Syndrome and 7 Deadly Sins of Affiliate Marketing

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: By Geno Prussakov :

You have launched an affiliate program, a number of affiliates have joined and you have started to see referrals to your website. However, at one point the sales volume gets frozen at one level, and no signs point to a brighter future. In other words, your affiliate program is no longer growing, or growth has slowed to a crawl. Does this sound familiar?

I have come to describe the above situation as Limited Potential Syndrome. It’s not because your product or service has limited potential. And it’s not because affiliate marketing is the wrong channel to market your services or products — anything that sells online can be marketed through affiliates. The problem lies in the fact that either your affiliate program or your very website has limited affiliate marketing potential. The good news is that there is a cure. The treatment starts by paying closer attention to how your current website looks, and how your affiliate program is organized and structured. You need not be an expert to spot the most frequently occurring mistakes and to deal with them. What follows is a list of the seven most deadly sins that commonly hinder the growth of affiliate programs.

#1: Leaks

Leaks, in affiliate marketing context, are external links within the merchant’s website that lead to sites that do not credit affiliates for sales and/or traffic. Some classic examples are AdSense units, banner ads, links to sister sites and even phone numbers listed on your website. Unless you have a way of compensating your affiliates for a sale that occurs over the phone, or an order that is placed on the website you are linking to, stay away from these. This includes all non-commissionable activity that may happen on your website after the end user has clicked an affiliate link. Allowing non-commissionable activity spells disrespect to those whose investments are based on the trust they will be paid for performance. Of course, dissatisfied affiliates hinder current and future growth of a program.

#2: Lack of Detailed Terms of Service Agreements

In a study conducted for my book, “A Practical Guide to Affiliate Marketing,” I examined 100 affiliate programs in the same vertical and analyzed their program agreements. The results were shocking: 51 percent of the merchants lacked Terms of Service (TOS) agreements altogether, 36 percent had extremely generic ones, and only 13 percent of the affiliate programs in the study had full affiliate program agreements in place. If your affiliate program is not outlining the responsibilities and obligations of all involved parties, you are in for long-term headaches.

Returning to the study yields another astonishing fact: Close to 70 percent of the affiliate programs with full agreements in place copied them (often word-for-word) from their competitors. By not taking time to craft your own TOS agreements, or simply copying another’s, you’re not getting the maximum potential (and protection) from your affiliate programs.

#3: Auto-Pilot Affiliate Programs

Is your affiliate program managed? This may sound like a strange question to some, but the sad truth is that many affiliate programs are run on auto-pilot; especially when the program is hosted on a large affiliate network. Merchants, often called “advertisers,” have a misconception about their whole affiliate marketing campaign. They believe it to be an advertising campaign where they pay on performance. While the latter part is correct, the former is not. Your affiliate marketing program is not an advertising campaign; it is a marketing program. And marketing programs should be managed. That means making yourself available to provide for any affiliate needs (be it creatives, landing pages, keyword lists, or anything else).

#4: Treating Affiliates as Employees

While affiliate programs cry out for management, affiliates themselves are generally opposed to any expression of such. Any top-down managerial behavior expressed by a merchant turns affiliates away. You can manage your affiliate program, but do not consider it your duty to manage the affiliates who have chosen to participate. By all means, keep tabs on affiliate performance and behavior, and make yourself (or your affiliate program manager) accessible, but not intruding. Motivate through opportunity, not fear.

#5: Outdated Material

Be it your data feed (prices, images, etc.), creatives, coupons, promotional campaigns, or anything else — keep it up-to-date at all times. It will save you, and your affiliates hours of customer service troubles. Making sure your affiliates always have the latest information and offerings will give them the best chance for conversions.

#6: Overlooking Trademark Bidding

There are several reasons to bar affiliates from bidding on your trademark, but two in particular. First, when a search engine user types in keywords such as “YourName” or “YourWebsite.com” they already know and are actively searching for your website or business. Allowing affiliates to bid on your brands diverts traffic to their websites or links that rightfully belongs to you. In addition, once you turn over your trademark to the highest bidder, you lose control over how it is presented.

Second, even if your brand is not famous, allowing trademark-bidding affiliates into your program will considerably decrease the likelihood of real producers joining your program. After all, the affiliate setting the last cookie gets the commission. For example, your product or service might be found through an affiliate that executed a quality pre-sale job. But the prospect shops around for a day or two before making the final decision. Later, the prospect goes to a search engine to find your business by typing in the name, but arrives to your site through a trademark bidder’s AdWords campaign. Just like that, the real producer’s cookie gets overwritten and the commission goes to the wrong affiliate. While most affiliates will not even bother telling you this, allowing trademark bidding in your affiliate program will not let it grow to its fullest potential.

#7: Adware & Cookie Overwriting

It is sad, but true, that BHO (browser helper object) plugins and toolbars that prompt overwriting of competitive affiliate cookies not only abound, but are often tolerated both by major affiliate networks and in-house-based affiliate programs. These are the affiliate wolves in sheep’s clothing (the façade will often look like one of a charitable foundation, or a scholarship fund).

Experience testifies to the fact that booting out an unethical affiliate can increase affiliate-referred sales by as much as a factor of 10 in a very short period of time. Regardless of what sales volume a violator produces, he or she will always hurt the campaign. Uncouth affiliates prevent serious marketers from signing up with your program, and often hurt your other avenues of online marketing.

Enlisting the help of affiliates is a smart way to get traffic to your website and increase sales. But not just any affiliate will do. Make sure your program is not paralyzed by limited marketing potential. Make sure you are doing everything possible to run a clean, transparent and affiliate-friendly program, and you will see the program grow and prosper.

About the Author: Geno Prussakov is a graduate of the University of Cambridge, author of “A Practical Guide to Affiliate Marketing” (2007) and “Online Shopping Through Consumers’ Eyes” (2008), popular speaker and affiliate marketing evangelist. Prussakov is the founder and CEO of AMNavigator.com.

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1 comment

FranklinJ 03-26-2009 10:36 AM

Geno,

I can not thank you enough for this info. The E-World is as vest as any ocean, any full of traps and danger, I thank you againg for the map of pots holes. I have 3 sites that I am trying to lauch, with out any E-World knowlegde or exprience. Help if you can or point me in the right dprection.

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