Results 1 to 23 of 23
  1. #1
    The slot machine that IS paid! Billy Kay's Avatar
    Join Date
    January 18th, 2005
    Location
    Small Town in Tennessee
    Posts
    5,226
    Merchants Re-Doing Terms to Focus on NEW Customers
    Why do these type of sites oeprate an affiliate program?
    The same reason most merchants run affiliate programs, to generate NEW business.
    That's from another thread - but it's been coming up a lot.

    I disagree as strongly as I can

    If I have a backpacking site and reccomend Merchant A... if the customer keeps coming back to my site for referrals, then

    1. The merchant isn't doing their job of customer retention

    2. I'm providing a service the merchant obviously lacks.

    3. Even if the customer keeps coming to me first soley because I rank higher for "Suede Backpack", then again, I should be congradulated

    Seems odd that the merchant mantra is "we want a long term relationships"... but in practice, they only want us for the first sale.

    [/sermon]

  2. #2
    ABW Ambassador
    Join Date
    January 18th, 2005
    Location
    Nunya, Business
    Posts
    23,684
    It's basically merchants that don't get it and getting advice from others that don't get it either. Let them learn the hard way.

    But in a nutshell, there's this misconception out there about an acquired customer, doesn't quite rank up there with nonsense like "all publicity is good publicity" but it's on the list.

    There are merchants who use affiliate programs for new business, acquiring new customers. I understand that. But their mistake is thinking it's a one time deal. You have to constantly acquire them, they can shop with you one week and then with another merchant the next. It's also why I didn't like the CSN setup where they don't have coupons for affiliates to use or post but once you send them a customer and they sign up for their newsletter, they get coupons. It's a way to keep them. Their hope is you send them a customer once, they pay you once and hopefully never thru your site again so they don't have to pay you again.

    Luckily there are plenty of other merchants out there.

  3. #3
    Kung Fu Master Eathan's Avatar
    Join Date
    January 18th, 2005
    Posts
    1,833
    Quote Originally Posted by Trust
    It's basically merchants that don't get it and getting advice from others that don't get it either.
    Not always true.

    The margins are the margins and it's down to each program to determine how best to use them. Programs that use the affiliate channel as a big part of their customer retention and branding efforts balance those costs in other ways, often disadvantageous to affiliates. Take Amazon for example:

    Customer retention and branding are a big part of Amazon's affiliate strategy. They know that many of the customers affiliates refer every day have shopped at Amazon before and would likely shop there again without the affiliate channel, but also know enough customers get re-introduced to Amazon while looking for a given product that Amazon happily pays out on all of them. To balance out the costs on those who would've made it to Amazon anyway, they offer a leaky program, 1 day cookies and lower commissions overall.

    There are trade-offs with anything...
    Eathan Mertz

    Black Cat Mining - Gold Prospecting & Rockhounding Equipment

  4. #4
    Moderator MichaelColey's Avatar
    Join Date
    January 18th, 2005
    Location
    Mansfield, TX
    Posts
    16,232
    More than anything, I think it's a perception issue. New customers are more valuable to merchants and should probaby be compensated higher. Returning customers aren't without value, though.

    Some merchants go to an extreme and only pay commissions on new customers. That's not a good policy.

    Most merchants don't distinguish between new and returning customers. That's a big miss in my mind. Merchants should compensate for the actions they want to encourage, and new customers are highly desired. If you have one affiliate who sends orders that are from new customers 90% of the time and another that seldom generates new customers, which one is sending the most valuable customers?

    Some merchants offer different commission rates for new vs. returning customers. This is the right way to think (IMHO), but it can have a negative affect due to affiliate perception. When there are two rates, affiliates invariable look at the lower rate and think "they're ripping me off by paying me less". (The cup is half empty.)

    The best way to handle this is to pay a normal commission plus offer a new customer bounty. Figure out what that new customer is worth to you and you should be able to easily justify a $5 or $10 new customer bounty on top of regular commissions. Your affiliates will view it as a bonus. The affiliates who generate new customers will be better compensated. Affiliates will be more inclined to do things that bring in new customers for you. Everybody wins.

    Probably one of the best examples of this is eBay. They pay huge percent of their seller fees for affiliate-generated orders, plus they pay a hefty bounty for new customers.
    Michael Coley
    Amazing-Bargains.com
     Affiliate Tips | Merchant Best Practices | Affiliate Friendly? | Couponing | CPA Networks? | ABW Tips | Activating Affiliates
    "Education is the most powerful weapon which you can use to change the world." Nelson Mandela

  5. #5
    Kung Fu Master Eathan's Avatar
    Join Date
    January 18th, 2005
    Posts
    1,833
    eBay's a great example, but they also offset some of the retention side costs with AdSense and Yahoo ads displayed to affiliate traffic. Don't get me wrong, both Amazon and eBay have a lot to offer, but every program is a mix of benefits and trade-offs.
    Eathan Mertz

    Black Cat Mining - Gold Prospecting & Rockhounding Equipment

  6. #6
    http and a telephoto
    Join Date
    January 18th, 2005
    Location
    NYC
    Posts
    17,708
    Good points about re-aquiring customers. Merchants need to understand that yes new customers are great, but once they purchase they may or may NOT remember to come back. If affiliates get you customers, the customer may or may not remember they have been to a site already, or that you carry that other widget they were looking for. All customers have value.

    If a new merchant offered bounties on new customers they would likely go out of business because every customer is a new customer However, established merchants I have worked for I have suggested the bounty plus commissions model since they wanted affiliates to only drive new customers. They didn't listen to me

    Bottom line, if the affiliate drove the sale they should get paid, new customer or returning. The customer returned through the affiliate, so the affiliate brought the customer to you. That is what affiliate marketing is.
    Deborah Carney
    TeamLoxly.com BookGoodies.com ABCsPlus.com

  7. #7
    The slot machine that IS paid! Billy Kay's Avatar
    Join Date
    January 18th, 2005
    Location
    Small Town in Tennessee
    Posts
    5,226
    Ebay and Amazon??

    Eathan, I mean REAL merchants. The kind listed in Shareasale

    LOL

  8. #8
    Analytics Dude Kevin's Avatar
    Join Date
    January 18th, 2005
    Location
    Rochester, NY
    Posts
    5,904
    I look at it this way... (pretty similar to Billy's view)

    If an affiliate sends me a new customer, it's a double win. The affiliate gets paid, and I get a new customer to play with.

    If an affiliate sends me a returning customer, it's a double win. The affiliate gets paid, and I get to recognize that I'm not doing something right.

    If I send a flyer/catalog in the box, and I'm doing PPC, and I'm doing other kinds of offline ads, and the customer STILL comes through an affiliate, then I never really owned that customer.

    Or, perhaps I'm picking up a second order on an impulse that I might not have gotten through my normal advertising efforts.

    I know we all are looking at our advertising budgets closely, especially now with things on a downturn, etc., but I would still prefer to get the sale to prevent my competitors from getting it.

    Just my 2 cents.
    Kevin Webster
    twitter: levelanalytics

    Kayak Fishing
    Web Analytics and Affiliate Marketing

  9. #9
    Full Member
    Join Date
    March 10th, 2006
    Posts
    466
    What's most frustrating for me is to send laser targeted customers to a big brand name and not knowing if they converted or not because a "New Customer Only" policy is in place. It skews the metrics and a partial commission would fix this.

    Also, we want customers to return to our own value-add sites, and it defeats the purpose when only new customers are compensated for, more especially when we refer them for the same reasons as last time, such as a review, or recommendation or low price.

    Sometimes it's a matter of balancing customer referrals with ROI per merchant.

  10. #10
    ABW Ambassador
    Join Date
    January 18th, 2005
    Location
    Nunya, Business
    Posts
    23,684
    "Some merchants go to an extreme and only pay commissions on new customers. That's not a good policy."

    "Also, we want customers to return to our own value-add sites, and it defeats the purpose when only new customers are compensated for,"

    I don't know of any that do that. If there are, does anybody know some? That's pretty much a program killer I would think.

  11. #11
    ABW Ambassador
    Join Date
    January 18th, 2005
    Posts
    1,350
    I can live with almost any terms as long as a merchant is upfront about what they want - and then they stick with it.

    What makes me furious is the constant change. If you don't want me to use your company name in sales copy, then tell me and I will figure something else out. But don't decide that 8 months later when my pages are complete and ranking in natural search above yours.

    If you want to be the only merchant on a page let me know! etc etc.

    Sometimes I don't think merchants get how carefully pages need to be written and designed to rank well in natural search - or to convince someone to buy a product at a particular price. They seem to think that we just whip out thousands of pages an hour.

    For example, I just spent 3 hours today reading a book about pricing strategies and how people decide which products to buy when they see several at once. I'm revising a website now to test its theories.

  12. #12
    Full Member
    Join Date
    March 10th, 2006
    Posts
    466
    On CJ you will see Action Criteria like:

    Action Referral Occurrences: 1 Time.
    or
    Must Be A First Time Customer

    I'm sure if I looked hard enough on CJ I would find more...I think Bodybuilding.com is one. Take a look.

    On some verticals though I think there's new customers always moving in and out of the space, and changing merchants for price, etc. All the more reason to compensate for all referrals, lol.

    For example, I just spent 3 hours today reading a book about pricing strategies and how people decide which products to buy when they see several at once. I'm revising a website now to test its theories.
    Sounds like an interesting book!

  13. #13
    ABW Ambassador
    Join Date
    January 18th, 2005
    Location
    Nunya, Business
    Posts
    23,684
    "Action Referral Occurrences: 1 Time."

    Oh, that just means if a merchant let's say has a 30 day cookie and someone clicks over from your site and they make 2 purchases, you'll get paid for one. BUT, if they go to your site and pick up another cookie, it starts all over again. So that means 1 sale within that cookie window, unless they get a new one. So they might have had a customer shop with them before before if they go to your site and click over and buy, you'll still get the sale.

  14. #14
    Full Member
    Join Date
    March 10th, 2006
    Posts
    466
    Oh! Thanks for clarifying, I didn't know that. I think I looked for an explanation on CJ help before and couldn't find what it meant. Well, that's not too bad at all.

    The other one "Must Be A First Time Customer" is fairly explicit though.

  15. #15
    Kung Fu Master Eathan's Avatar
    Join Date
    January 18th, 2005
    Posts
    1,833
    Quote Originally Posted by Trust
    "Action Referral Occurrences: 1 Time."

    Oh, that just means if a merchant let's say has a 30 day cookie and someone clicks over from your site and they make 2 purchases, you'll get paid for one.
    Yuck, that sounds pretty bad too, especially if they wave a long cookie duration out as a selling point.

    Billy, next time I run into Jeff Bezos, I'll be sure to tell him who the REAL merchants are, myself included.
    Eathan Mertz

    Black Cat Mining - Gold Prospecting & Rockhounding Equipment

  16. #16
    Lite On The Do, Heavy On The Nuts Donuts's Avatar
    Join Date
    January 18th, 2005
    Location
    Winter Park, FL
    Posts
    6,930
    Quote Originally Posted by Trust
    Their hope is you send them a customer once, they pay you once and hopefully never thru your site again so they don't have to pay you again.

    Luckily there are plenty of other merchants out there.
    Yes, you should consider yourself lucky that there are plenty of merchants out there that don't understand it as well as CSN.

    Your "they want to pay you once" arguments aren't persuasive. The policies don't affect consecutive lifetime touches, they affect affiliates who are touching always after someone else has touched.

    If your coupon's site traffic behaves as you've said it does, their policy won't even affect you. In fact, if you send them someone and they go to check out later and go looking for possible better coupons, you're going to make even more money than you used to because the credit for those shoppers won't go elsewhere then, you'll get the credit.

  17. #17
    ABW Ambassador
    Join Date
    January 18th, 2005
    Location
    Nunya, Business
    Posts
    23,684
    "Your "they want to pay you once" arguments aren't persuasive."

    Donuts, let's say you send them a customer. Could be from you pushing products. They're going to keep them by sending them coupons. They're not going to be checking for your site any longer. It's used for you to send them new customers, nothing else. If fact they were even in agreement with me about the coupons, reread the thread.

    Does this need to be any clearer?

    Talking about coupons that they give customers but not affiliates:

    "In an effort to retain their business and develop a repeat customer, we entice them with a reason to shop with us again."

    "If your coupon's site traffic behaves as you've said it does, their policy won't even affect you."

    See above, affiliates can't post them. They're just used to retain customers you sent them.

  18. #18
    ABW Ambassador simcat's Avatar
    Join Date
    January 18th, 2005
    Location
    Denver
    Posts
    1,786
    Many merchants seem to be clamoring for 'value added' affiliates. That seems to be at odds with the (send me a new customer and I'll take it from there) philosophy.

    if my affiliate site has value, maybe some people will visit it more than once

  19. #19
    ABW Ambassador Greg Rice's Avatar
    Join Date
    January 18th, 2005
    Location
    Ohio
    Posts
    4,889
    Quote Originally Posted by simcat
    Many merchants seem to be clamoring for 'value added' affiliates. That seems to be at odds with the (send me a new customer and I'll take it from there) philosophy.

    if my affiliate site has value, maybe some people will visit it more than once
    I had a client who had this idea. They didn't want PPC affiliates linking directly because that didn't bring any "added value". I tried to educate them that if affiliates bring added value then great but it's not their responsibility.
    Greg Rice Affiliate Program Management
    www.gocmc.com info(AT)gocmc.com | 330-259-1223

    Join us! - MiNeeds.com | DiscountCandleShop/CheeseSupply | Feng Shui Plaza

  20. #20
    Outsourced Program Manager Brent E.'s Avatar
    Join Date
    September 26th, 2006
    Posts
    962
    I want to thank all of those affiliates who have embraced our commission change for SEO driven coupon affiliates. The programs first referral revenue has doubled(Including our best week during the Holiday season) since the day I released this information on ABW. Thank you for seeing the value in the decision that I had to make. Your actions have convinced me that the right decision was made. It shows me that Non-coupon affiliates are sick and tired of having their cookie over-written without recieving any credit. There is a lot of talk on this forum, Im glad to see some action taking place.

    If anyone has questions about the changes we made, Scott Jangro wrote a great blog piece on it. I hope it sheds clarity for those that don't understand it or those that are opposed to it.

    http://www.jangro.com/a/2008/01/15/n...at-csn-stores/

    Have a Good One,
    Brent Elias
    Affiliate Manager/Acceleration-Partners
    Belias(AT)acceleration-partners.com
    "God Grant That Men Of Principle, Shall Be Our Principle Men" - Thomas Jefferson

  21. #21
    ABW Ambassador
    Join Date
    March 2nd, 2007
    Posts
    1,470
    If a merchant is interested in acquiring new customers, say like Blockbuster or Netflix, paying out CPA rates based on the LIFETIME value of a customer is definitely an option that is out there.

    If say, for merchant XYZ, a new customer is worth $ZZ, pay it out and keep the customer forever and entice them to keep them for life whatever tactics a merchant has up their sleeves.

    Not paying the LIFE TIME VALUE of a NEW customer on a sale or lead and trying to obviate the commissions on existing customers, does only mean one thing. It is merchant to hit AVOID.

    Oh - recently there was one CROOKED merchant, offering free product ($0 + $4.95 s&h) and acquiring new customers with affiliates being paid $0 as a percent (10%) of sale. Talk about the merchant ETHICS here!

  22. #22
    Lite On The Do, Heavy On The Nuts Donuts's Avatar
    Join Date
    January 18th, 2005
    Location
    Winter Park, FL
    Posts
    6,930
    Quote Originally Posted by Trust
    "Your "they want to pay you once" arguments aren't persuasive."

    Donuts, let's say you send them a customer. Could be from you pushing products. They're going to keep them by sending them coupons. They're not going to be checking for your site any longer. It's used for you to send them new customers, nothing else. If fact they were even in agreement with me about the coupons, reread the thread.

    Does this need to be any clearer?

    Talking about coupons that they give customers but not affiliates:

    "In an effort to retain their business and develop a repeat customer, we entice them with a reason to shop with us again."

    "If your coupon's site traffic behaves as you've said it does, their policy won't even affect you."

    See above, affiliates can't post them. They're just used to retain customers you sent them.
    But you have been asserting that owning a customer forever just isn't the way things work. You said that they need to be acquired for each sale.

    And now you're trying to argue that the merchant is unfair (or doesn't get it) because they're going to try their best to "own" the customer forever, something you said just can't be done?

    You can't have things one way for the convenience of making your case, then using the antithesis of that to try to label a merchant as greedy, screwing affiliates or wrong.

    So let me know which case you'd like base the merits of your position on please - can a consumer be forever "acquired" by a merchant or not?

  23. #23
    ABW Ambassador
    Join Date
    March 2nd, 2007
    Posts
    1,470
    Donuts and Trust - you are having a different debate than one I am going to inject here.

    On a CPA model, a customer is owned by the merchant forever. CPA model pays per new lead or new sale or new action only. And not on REPEAT sales.

    But then a CPA lead for a FREE 2 week trial subscription or something like that at PoS is typically a $0 sale is paying COMMISSIONS to the lifetime anticipated value of a consumer.

    Those merchants who value new customers differently than existing customers need to take a hard look at CPA model which already exists.


    None of my comments above are direct towards any one merchant or affiliate. I am making some GENERAL comments here that I hope are of some value to the NEW vs. EXISTING customer discussion.

  24. Newsletter Signup

+ Reply to Thread

Similar Threads

  1. Less is MORE in terms of content & Focus
    By Rhia7 in forum Newbie Affiliate FAQs & Helpful Articles
    Replies: 0
    Last Post: October 5th, 2014, 09:50 PM
  2. Featured: Merchants: One way to keep customers from Googling for coupons...
    By MichaelColey in forum Merchant Best Practices Forum
    Replies: 32
    Last Post: September 25th, 2011, 02:52 PM
  3. Merchants: One way to keep customers from Googling for coupons...
    By MichaelColey in forum Couponer's Corner
    Replies: 0
    Last Post: June 9th, 2011, 11:27 PM
  4. When building sites - do you focus on one or more merchants?
    By MoneyBusiness in forum Midnight Cafe'
    Replies: 16
    Last Post: October 14th, 2007, 12:00 PM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •