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  1. #1
    ABW Ambassador buy_online's Avatar
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    From the"I am really dying to know department"
    A question for: Andy (TigerDirect), Jamie (Coldwater Creek), and Michael (Barenecessities)

    I have been in sales a long time, and part of sales is perception - and I try my best to know what the other person is perceiving to try to be more successful. But when it comes to Affiliate managers, I am having trouble. So here goes:

    When you folks attend functions (seminars, conventions, and meetings), and other Affiliate managers are in attendance, I am sure you have a word or two with them. Let me also make the assumption that they discover (or already know) you have aggressive programs, communicate with your affiliates, and promote the affiliate sales channel. I'll also assume some of these folks are not of the "Affiliate friendly persuasion" (my prejudiced term).

    So when you talk with these folks, what do they say in defense of the way they run their programs, in contrast to your own? I am really interested in the business rationale they are using to support their methods. Pardon all the personal pronouns, but many of their actions don't make sense to me (and I think - others here at ABW).

    I try to make an effort to understand the business issues involved in decisions that Merchants make. For example, Capital One was not getting the higher credit ranked customers (e.g. higher margin) they wanted in their program through the affiliate channel or the Internet in general (so they say), if true - I understand the rationale (even though I might not like it).

    I would love to hear what "buzz" you get from these meetings, and the opinions and thoughts of the other Managers you encounter.


    Fred :confused:

    PS: I know there are many great affiliate managers, and I have left your name out (above) - my apologies. Please feel free to answer as well.

    [ 08-02-2002: Message edited by: buy_online ]

    [ 08-02-2002: Message edited by: buy_online ]

  2. #2
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
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    Buy-Online does pose a very legit inquiry as to how AM's treat affiliates as a sales channel. My observation as both a e-commerce site builder for clients and their AM, if they choose to go the affiliate route, is that merchant's use affiliates to jump start their programs. At first they want to see the hit meter start moving due to affiliate generated clicks. Then they want to see sales activity by improving creatives -landing pages -cookie days and other converting tools. Once the conversions start to impact their bottom line (cutting checks to affiliates) some actually want to re-design their sites to improve conversions and start in on Keyword buys at PPC SE's. They like my site design goal, which is to convert 1 sale per/50 visitors regardless of click source.

    Some start diversion tactics like prominent 800#s -e-mail list gathering -first sale only commissions -lowering return cookie days -delete the costs associated with individual product linking and in some cases fire me as AM and proceed to turn off sales tracking tags during peek shopping periods. 100% of these guys eventually drop their programs or migrate to cheaper network providers to keep from paying out reaccuring commissions.

    Those who are honest are well content to just try and lower their conversion ratio to 1 sale per every 25 visitors and exit the affiliate rat race recruitment scene. They rely on bookmarks -SE listings and let the NET account for 25% of their sales and milk their customers for repeat online/phone sales and URL referrals. How many merchants out their convert 1 sale/25 clicks when selling actual products not leads???

    My observation is that those you invited to repond are willing to keep on writing affiliate checks in greater numbers to bury their competition. It should be a honor for any network to sponsor and showcase them as affiliate friendly examples. This is only done at ABW.

  3. #3
    ABW Ambassador BareNecessities's Avatar
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    Hi Fred & Mike,

    Well, I have limited experience in interacting with other Affiliate Program managers. The only people I ever speak to are my peers within Linkshare. I try to go to the Linkshare conference every year, although I missed the last one they had before this past June.

    Almost every person I speak to tends to be very pro-affiliate. Even though the conference lasts a whole day, it is hard to be able to talk to too many people. I inevitably get drawn into chatting with other people excited about what they are doing too.

    Usually, I'm trying to understand what the guys with more mature programs are doing. I ended up sitting next to Jamie during the main speaking program, and we chatted about our programs a little. I also had a chance to talk with Shawn some. Basically, I feel like we are just beginning to tap into the potential our affiliate partners offer.

    I did have an interesting discussion over lunch though. The guy seated to my right was from Home Depot. They haven't really focused on their affiliate program until now, and it was surprising to see that their affiliate program was basically in it's infancy... despite the size of their company. To their credit, they did ask a ton of questions, and hopefully soon, they may have a growing affiliate program. That's probably the closest I came to what you were alluding to in your questions. They weren't anti-affiliate over the last few years, but they hadn't really focused on them either.

    You guys probably have a better feel for the merchants that have negative feelings about their affiliate programs, based on their actions. I don't really see it too much...except for what I read on ABW.

    I'm curious as to what the other guys see though.

    Thanks,
    Michael

  4. #4
    Outsourced Program Manager
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    buy_online,

    Thanks for including us in this post.

    I actually have had the pleasure of speaking with many other affiliate managers at the last LS symposium. I have also been in touch with managers of other networks and have a few points to share.

    Many of the managers I spoke with truly want to do the things we and the other managers you mentioned are doing, but lack resources, support, money, technical people and time. When they find out that we have several people working on our program they are surprised.

    Many of the managers are fighting upper management to get things passed through, as the higher ups do not understand the value of this sales channel and they spend a lot of their time educating about our industry. I have been lucky in that our affiliate program is highly visible within the company and has the support of all upper management. Many managers do not have this.

    Many would like to communicate more, but their time is taken up by other tasks, they barely have time to keep up with the basic stuff.

    Many decisions, like the CapitolOne example, are made way above the manager. Programs are judged on many levels, and this is sometimes hard to adequately communicate to affiliates.

    Does that give you a better idea. I think in general it was a time or resource issue or it had something to do with a unique business model that prohibited them from going further with their programs.

    Michael, it was great meeting you at the symposium. I hope all is going well for you and your company.

    We measure our programs success by many metrics, the most important being SALES. Mike, thank you for your words of support, we are very honored to be here and so welcomed at ABW!

  5. #5
    Outsourced Program Manager Bryan Rhodes's Avatar
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    Fred,

    Great question. It's hard for me to believe the treatment affiliates get from some program managers.

    As you said, it really comes down to perception. I view our affiliate's as partners in the growth of our company. The more sales they make the better we do. The key is that our commission structure is completely sustainable. If a single affiliate sold $1 million dollars in a month, I would have no problem paying them 10.5%. In fact, I'd probably take them to Hawaii and hand over the check personally.

    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by EcomCity.com:
    My observation is that those you invited to repond are willing to keep on writing affiliate checks in greater numbers to bury their competition.<HR></BLOCKQUOTE>

    Absolutely, Mike. The more you earn, the better BackcountryStore.com does.

  6. #6
    Affiliate Summit Guy Shawn Collins's Avatar
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    Hi Fred -

    By and large, the affiliate managers that attend conferences and meetings are the proactive managers, or else they are novices that are trying to learn the ropes.

    At the last AffiliateFORCE show in Miami, I think there were about 180 attendees (some of which were affiliates).

    If you consider that Refer-it lists 5,580 programs, then even of all of the attendees at the conference were affiliate managers, they would only account for a little more than 3% of all affiliate manangers.

    Shawn Collins
    ClubMomAffiliates.com

  7. #7
    Outsourced Program Manager
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    I think there is a shift taking place right now where companies that run affiliate programs are starting to realize that these programs are sales, not marketing channels. As we all know, there is a difference in how you run one vs. the other.

    And yes, it does seem like everyone obviously should treat it as a sales channel, but some do not. But I think the shift is starting. I know that LinkShare is pushing all thier merchants to make this change in philosophy, and ultimately program management.

  8. #8
    ABW Ambassador buy_online's Avatar
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    First, thanks to all the Merchants who posted replies (Jamie, Michael, Bryan, and Shawn)- most appreciated. My understanding is more complete. You have helped shape my perceptions and overall understanding. I also hope others have been able to relate to what you have said.

    I found some things that surprised me, and some that didn't. Here's one that sounded like all my own corporate experiences wrapped into one:
    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>"Many of the managers I spoke with truly want to do the things we and the other managers you mentioned are doing, but lack resources, support, money, technical people and time. When they find out that we have several people working on our program they are surprised."<HR></BLOCKQUOTE>

    I'll even bet they are also jealous! How can an AM possibly deliver the kind of responsiveness, high commissions, longer cookie durations, individual product links, and on-time payments, if they don't control or have proper access to their IT department, accounting department, or their own VP's ear. This is one of those "sad, but true" stories.

    Here is another interesting (but not surprising) statement: <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>"Many would like to communicate more, but their time is taken up by other tasks, they barely have time to keep up with the basic stuff."<HR></BLOCKQUOTE>
    If you are this AM, how do you convey the fact that you are too busy to communicate properly to your affiliates? Does telling them the truth help your program? You are swamped, you prioritize, but some affiliates get put off. Doesn't sound like much fun.

    From my perspective, Bryan has a good situation. He has the buy-in of his management (commission structure), and I'll bet so do Michael and Jamie. I picked you guys, because your firms look like they have more of a classic corporate structure (not to leave anyone out).

    I was heartened by Jamie's last comment about a trend emerging on how the channel is viewed. I wonder if some management has felt that the affiliate channel is a marketing channel, because that is what they have perceived of the Internet all along - brand extension? Those of us with a sales background would immediately recognize the Affiliate channel as a sales channel. We are driving sales into their business, and sales (it seems to me) are what gives the affiliates the best value to the Merchant. I am glad to hear a trend is emerging about how the channel should be treated. If it is a sales channel, the AM's will have to account more for sales performance. It would be interesting to know if the AM's in the industry report to a VP of sales - or marketing?

    Having said all that, I am still very wary of some of the businesses out there (Merchants) who are taking some pretty big steps to safeguard their "Brand." Those folks still have a marketing mentality. An example of that would be the companies like KB Toys who seem very worried about where their brand is placed on the search engines and directories. Just food for thought (Sheesh, I hate that expression)!

    Thank you all once again, it is great to understand more about how things are done in your organizations, and other merchant companies out there.

    Fred

  9. #9
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
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    You guys are absorbing the message us affiliates having been yelling to the networks and merchants for years. The affiliate enable pay-per-performance merchant needs to treat us as a secondary highly focused sales channel. Very similar to the computer industry VAR (Value Added Reseller) program that made that industry florish over the last 20 years.

    By forcing us to put up branding creatives and direct willing/curious buyers to confusing home page navigation schemes dilutes our sales abilities. We do not want nor need to move those 20,000 SKU's you guys stock, nor do we wish to have our shoppers join your e-mail marketing program or call your 800# outsourced order hotline. We want them to go directly to what you or we determine they will buy if they can find it at a good price with after sale support.

    Most merchants looking at the affiliate network bill figure it is the cheapest form of advertising for them and are content to try to even lower that price of customer acquisition. More efforts has been spent on adopting branding and commission diversion tactics than ever went into questioning how to drive more sales thru the channel. You can see from the posts here at the only affiliate/merchant forum that has an audience that only a handful get the message. The faster a merchant's AM distances himself from the marketing /Ad dept the more successful his program becomes.

  10. #10
    Outsourced Program Manager Chris -  AMWSO's Avatar
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    Hi Fred

    My thoughts....

    I have never met any other Affiliate Managers at functions, the most interaction I have had with other Managers is here at ABW.

    But looking at your questions from an different angle....

    The Mondera Affiliate program was kicked off like many others to "jump start" brand marketing, where getting the brand out there as a banner was more important than the actual sale. The original marketing team had a fairly naive view of what affiliates could do for the site

    Over time that migrated into a view of "wow" as affiliates brought in sales that put other marketing channels to shame, but at the same time, the team didn't put any effort into making the affiliates appreciated, deciding that a monthly cheque was all the appreciation an affiliate needed and making no effort to really drive the program forwards.

    Then over the past, say 12 months, the program slipped into decline as the company cut away staff to face the facts that going public and getting more VC money was no longer an option.

    Now as Mondera looks more and more at every $1 that is spent on marketing it becomes very obvious that affiliates are the Kings of "ROI", better than Networks and better than PFP.

    Why have some companies failed to see this, I would put that down to a couple of reasons, Money and Resources as stated by the guys above..but also. "Accountability", Most companies don't have a "Internet Marketing" team, Internet marketing is run by the offline teams, where the understanding of how things work is both not there and not wanted, Branding is about as far as they want to understand the internet and therefore Impressions are all they care about. It horrifies them that their budget for mass offline branding might be cut to nothing to support PFP and Affiliate based online marketing. Where ROI can be measured down to every last cent.

    As fpr Pure Internet companies who don't manage their affiliates in a good manner, well I can only put that down to good old plain ignorance.

    Cheers

    Chris

  11. #11
    Content $ Queen Ebudae's Avatar
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    Chris, that's really good what you just said!

    Made me even go take a look at your site!

    Sigh, if only it wasn't linkshare. Will have to think on it but you have nice things.

    Vicki [img]/infopop/emoticons/icon_wink.gif[/img]

  12. #12
    Outsourced Program Manager Chris -  AMWSO's Avatar
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    Hi Vicki

    Approved your site [img]/infopop/emoticons/icon_wink.gif[/img]

    We looked at other options but in the end only LinkShare offered 100% of what we needed in the way of support and reports...some people love it, others hate it, from my side I love it and the support I get from Linkshare via Email and on ABW.

    I didn't even know of ABW till Linkshare told me [img]/infopop/emoticons/icon_biggrin.gif[/img]

    Cheers

    Chris

  13. #13
    ABW Ambassador buy_online's Avatar
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    Hi Chris, and thanks for replying - most appreciated [img]/infopop/emoticons/icon_smile.gif[/img]

    After reading your post, I decided to apply to your program as well. I've been meaning to focus more on your type of products anyway - and what a great excuse!

    Thanks again,

    Fred

  14. #14
    Outsourced Program Manager Chris -  AMWSO's Avatar
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    Hi Fred

    Great, thank you for giving us a shot.

    I'm on ABW everyday and you can always email me at chris.sanderson@mondera.com for further help or questions.

    Cheers

    Chris

  15. #15
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
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    Chris ..I also looked over your site which is very well done for high end jewelry shoppers. I apply for your program and replace the Ashford -ICE and other diamond folks with your links in my jewelry store and bridal shops. Hell I've tried them all with no luck beyond a few sales coming from Overstock. LS has some great creative tools used by Overstock -Coldwater Creek for dynamic product links and storefront displays. Do you plan to support them?

  16. #16
    Outsourced Program Manager Bryan Rhodes's Avatar
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    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by buy_online:

    From my perspective, Bryan has a good situation. He has the buy-in of his management (commission structure), and I'll bet so do Michael and Jamie.
    <HR></BLOCKQUOTE>

    Thanks Fred! BackcountryStore.com is a good place to be.

  17. #17
    Outsourced Program Manager Chris -  AMWSO's Avatar
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    Hi Mike

    Looks like I'm going to need that Mondera Fourm in a hurry now, I'll have your application approved in a jiffy.

    High End jewelry does have slow conversion and click through but we're working on a range of Affiliate Offers to both improve what we offer at present and help affiliate have an easier time selling our products.

    Cheers

    Chris

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