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  1. #1
    Affiliate Manager DandyMats's Avatar
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    Affiliate manager paid per performance?
    I have a great site (dandymats.com) and started an affiliate program on SAS a few years back. I was gung-ho - I separately own an online marketing design company - so was able to create virtually any creative/marketing asset an affiliate might need. Only problem - no affiliates worth anything signed up. I expected it to be a little more turnkey: I have a site. We sell great products. Here are dozens and dozens of banners, emails, custom landing pages, etc. Take them. Promote them. Everyone wins.

    So I learned that acquiring good affiliates was the hard part. As I got into it, I realized the volume of time I was putting into that part would be better spent elsewhere. I could get greater ROI on my time doing other things - so I began to sour on the affiliate idea.

    Then I started investigating affiliate managers. They did have very strong credentials. But the problem there was they usually charge $1000s a month.

    If I wanted to spend $1000s a month, I would have gone with PPC and media buys on day one - and never even gone the affiliate route.

    But to come full circle - I still think there is something here. Why wouldn't an affiliate manager (perhaps you?) be willing to take $0 monthly fee and be paid only per performance?

    It stands to reason. If I'm spending $1000s a month flat on the affiliate manager, then paying out affiliates - after a few months - I'd better be in the black or else it was all worth nothing. If the affiliate manager is as confident in their ability as they proclaim when justifying their $1000s in monthly fees - why wouldn't they take a 100% pay-per-performance agreement?

    Heck - I'd be willing to share VERY large portion of each sale with them. If they acheive the same success they claim they'll help me find, then they'll actually get paid much more than whatever their monthly fee would have been.

    The fact that none seem to want to take a deal like this gives me an instant loss of confidence, as if they actually have reservations about the ultimate success of my program, and want to make their money while they can.

    I don't mean to be unfair - I've spoken with affiliate managers and they all seem to be very professional and do have many satisfied clients.

    It's just odd that they don't seem to want to take a 100% pay-per-performance deal.

    BTW - my offer still stands! If any of you are interested in a deal like this - get in touch!

  2. #2
    OPM/Moderator Hectic GHC's Avatar
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    Because we get paid for the time we put into a program and if your site doesn't convert on its own, we never get paid.

    Affiliate marketing is not where sales start, it's where they are supplemented. I can give you an additional 20% new customers each month but if we start with zero sales, you'll get 0% growth.

    That's why I don't like launching new programs anymore. I have a great strategy for helping existing programs relaunch but the conversion needs to be there.

    Let's talk offline. I'm north of Atlanta as well.
    Greg Hoffman
    Affiliate Marketing Advocate of the Year 2016; Best OPM/Agency - 2014; Best OPM/Agency, Five Years in a Row - ABestWeb.
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  3. #3
    OPM and Moderator Chuck Hamrick's Avatar
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    So if we follow your logic then an affiliate manager should be paying you a percentage of what they earn or buy in to your company because the opportunity is so great. I had a merchant approach me years ago to take over a program on a rev share. It was easy to find the OPM who told me she made $600 the previous year doing all that she could to get the program selling with affiliates. Sounds like she lost money, I passed. I get at least a lead a week from companies that are making millions but want me to build out an affiliate program comp, including network start-up fees. I send them to an Amway rep!

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  5. #4
    ...and a Pirate's heart. Convergence's Avatar
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    Quote Originally Posted by DandyMats View Post
    But to come full circle - I still think there is something here. Why wouldn't an affiliate manager (perhaps you?) be willing to take $0 monthly fee and be paid only per performance?
    People who do that are called affiliates...
    Salty kisses, Sandy toes, and a Pirate's heart...

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  7. #5
    OPM and Moderator Chuck Hamrick's Avatar
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    Maybe you can hire an affiliate to run the program on a rev share, just pick the one that is making you a lot of money and ask them.
    Last edited by Chuck Hamrick; March 11th, 2013 at 12:03 PM.

  8. #6
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    Quote Originally Posted by Chuck Hamrick View Post
    Maybe you can hire and affiliate to run the program on a rev share, just pick the one that is making you a lot of money and ask them.
    That's a good recommendation Chuck. But I agree the product has to convert on it's own before you can rely on affiliates. Starting new affiliate programs takes time, just like starting a business.

  9. #7
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    OP has a point that I think a lot here has missed out or maybe did not like.

    It's all fine and good if we are approaching a star affiliate manager with a solid track record that they demand upfront money and a monthly fee. However when a merchant like us look for affiliate managers, 99% of what we get are applications from unknowns full of promises and self-promotion, claiming performance figures.

    To take Chuck's example, that OPM who produced $600 for a whole year, you see it as a loss for her. Why isn't it recognized that it is a bigger loss for merchants who employ such OPM's and affiliate managers on thousands of dollars a month and end up in the red because of the OPM's lack of ability to actually design a successful affiliate program and then attract enough of them to make money?

    All high-performance oriented fields of sales and marketing now are based on commission only unless you are applying for a full-time job with a sit-down interview and getting a 8 hours a day presence with the boss breathing down your neck. It's got nothing to do with the disfunctional MLM models. It's got to do with the nature of who is approaching who. If I contact a successful known affiliate manager with a track record and references, then it is natural I pay them fair monthly fees for their experience and knowledge and their design of a program. But if like most of us, all we are getting are excited young applicants with nothing but their own promises to give them credibility, then I do believe I agree with the OP that as long as the primary job of the affiliate manager hired is to bring in successful affiliates, I wouldn't pay except for performance, at least will only pay at milestones: (program designed and first affiliate achieved first sale, then at 50 sales with at least 5 affiliates for example etc.)

    Accountability is key and too many greens who are still discovering themselves are calling themselves pros today.

  10. #8
    OPM/Moderator Hectic GHC's Avatar
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    Sampharo,

    The problem is green affiliate managers are hungry and they will take assignments because they need the experience and the cash. After they/I get burned the first time on a rev share deal with a merchant that does not convert, they typically learn their lesson. But there are many more to fill the void.

    When the manager only got $600 after a year, I do not see it that she failed. Our jobs as managers are to recruit new affiliates, get them to send clicks and then get more existing affiliates to send clicks. That's our responsibility. If she did all three of those tasks and the merchant could not close the sale, it was the merchant's failure.

    As I said last year in this thread, good managers need to get paid for their time. I'm not a fan of rev share because its too easy for managers to cross lines and let bad affiliates drive up revenue just so the checks are higher.
    Greg Hoffman
    Affiliate Marketing Advocate of the Year 2016; Best OPM/Agency - 2014; Best OPM/Agency, Five Years in a Row - ABestWeb.
    Visit Greg Hoffman Consulting


  11. #9
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    Hi Greg,

    Appreciate the input.

    I think the question that needs to find common grounds in understanding here is really WHAT is expected of an affiliate manager. I think that is what will define the pay structure.

    For the purposes of the affiliate manager, if the work of recruitment of affiliates and development of the affiliate program is looked upon from the administrative point of view, then the expectation of fees for work done would be at least understood if not overwhelmingly regarded as normal.

    However according to what I have been told by most merchants who are having affiliate programs developed and managed, and what is expressed by many affiliate managers responding to job posts, the focus is NOT on the administration. It is on developing successful affiliate relationships and attracting the right affiliates who create sales, and it is about designing the program in a way that would be (to their judgement) attractive to such right candidates and profitable to the company, and last is about management of the admin of such a program.

    Salespeople are heavily compensated by performance commissions, and so do sales managers. What a merchant like myself is being told leads me to believe that the affiliate manager's job is very similar to that of a sales manager, i.e. recruit the right people and manage them towards achieving results.

    With regards to the argument about the merchant's failure with regards to conversions, then it's again the same picture as the sales manager, isn't it? If the product is unattractive and the marketing collateral is not strong enough, salespeople don't sell. So the answer is that if a product does not convert, then just like the salesperson and sales manager, the affiliate manager should quit and find a better company with a better product offering. Isn't that the basis of every working relationship? Don't affiliate managers choose the company just as much the company chooses the affiliate manager?

  12. #10
    ...and a Pirate's heart. Convergence's Avatar
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    You're thinking is too corporate.

    NO AFFILIATE MANAGER WILL EVER MANAGE A SINGLE AFFILIATE.

    Your thinking of comparing a sales manager to an affiliate manager is way off base...
    Salty kisses, Sandy toes, and a Pirate's heart...

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  14. #11
    Affiliate Network Rep JCrooks - AffiliateWindow's Avatar
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    Quote Originally Posted by Sampharo View Post
    Don't affiliate managers choose the company just as much the company chooses the affiliate manager?
    Not the green newbies. They are full of enthusiasm, but not experience, determined to quickly achieve what it's taken seasoned pro's years of networking to accomplish. They'll take any job just to get credentials.

    I think a lot of new merchants have no idea what to look for in an OPM. They use what the OPM tells them as a way to judge, and there are so many more factors I would investigate, but I work with too many different ones to ever share all my thoughts there.

    Before a merchant ever talks to an OPM, they need info on their conversion rates. No matter how good the OPM is, unless a site converts, affiliates won't promote a dog. Remember, OPM's (like network account managers) have a reputation to maintain. If we recommend something to an affiliate, the affiliate is trusting us that the time invested will lead to financial reward. If it doesn't, the affiliate is less likely to take our recommendation the next time. So recommending a program is not done lightly.
    Jeannine Crooks - Always happy to share what I know! - Voted Best Network Rep 2013 & 2014
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  16. #12
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    Quote Originally Posted by JCrooks - AffiliateWindow View Post
    Not the green newbies. They are full of enthusiasm, but not experience, determined to quickly achieve what it's taken seasoned pro's years of networking to accomplish. They'll take any job just to get credentials..
    Wholeheartedly agree, and that is what I mean by OPM's and Affiliate Managers who respond to merchant postings making promises that they can't keep, hence my belief that for any unknown affiliate managers being paid by performance and upon achievement is fair.

    Separating the green from the effective veterans is where merchants struggle.

    Quote Originally Posted by JCrooks - AffiliateWindow View Post
    I think a lot of new merchants have no idea what to look for in an OPM. They use what the OPM tells them as a way to judge, and there are so many more factors I would investigate, but I work with too many different ones to ever share all my thoughts there.
    That is valuable knowledge to both merchant as well as green affiliate managers, because it will help the former hire affiliate managers with more confidence and therefore will present more compensation options, and the latter would learn what areas they need to focus their improvements on. If you don't want to share the information here, perhaps an anonymously written article in someone's blog would be very useful? I would certainly appreciate it.

    The other area of contradiction also is what some affiliate managers are supposed to do.

    Quote Originally Posted by JCrooks - AffiliateWindow View Post
    Remember, OPM's (like network account managers) have a reputation to maintain. If we recommend something to an affiliate, the affiliate is trusting us that the time invested will lead to financial reward.
    Good point. Thank you.

  17. #13
    ABW Ambassador JoyUnltd's Avatar
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    Quote Originally Posted by DandyMats View Post
    If the affiliate manager is as confident in their ability as they proclaim when justifying their $1000s in monthly fees - why wouldn't they take a 100% pay-per-performance agreement?
    Your new business is as unknown quantity as theirs. Why should any experienced aff mgr. spend their time and energy when the ability of your site to convert is unknown? If you had spent any time in the aff biz, you would know how hard it is to get top affs to promote (& compete against each other) on what is basically a niche product. Your products are very nice, but not something the hungry masses are craving.

    Top experienced sales mgrs. don't apply for 100% commission jobs with tiny, unknown companies/brands. They get the green newbies also.

    Affs spend their time & $$$ to promote a program in hopes of commissions. That is our job. As others said, aff mgrs. develop relationships with affiliates & build trust. They have much knowledge about how both sides of the fence work. Their time does not come cheaply, they're worth every penny.

    I spent many years as a graphic designer & essentially gave it up as I was tired of dealing with new merchants who thought the world should support them as they grow their business. I only do work now for former clients who I consider are low maintenance. They understand the value of what they receive from me, which is much more than graphic design.

    You need to grasp the much bigger universe of online retail, in which your company/brand is but the tiniest speck of cosmic dust. Please understand, I am not being disrespectful, but you need to understand where & how your business is perceived by those with experience.
    Renée
    Pay no attention to that woman behind the curtain. -Wizardress of Oz

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  19. #14
    Affiliate Network Rep JCrooks - AffiliateWindow's Avatar
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    I had someone approach me once with a commission-only program (I listened because the intro came through a friend). Getting the program rolling would have been a full-time job. When I ran the numbers based on what may commission would be, I'd have to sell thousands weekly just to earn a decent living, and the current site wasn't even doing that.

    So one other question to ask yourself, if you're asking an affiliate manager to work on a commission only basis, how many would they have to sell in a week/month to support themselves? Is that even possible?
    Jeannine Crooks - Always happy to share what I know! - Voted Best Network Rep 2013 & 2014
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  20. #15
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    Quote Originally Posted by JoyUnltd View Post
    Your new business is as unknown quantity as theirs. Why should any experienced aff mgr. spend their time and energy when the ability of your site to convert is unknown?
    First, The OP mentions clearly that his business is established for years and selling well (as well as mine), so no it is not unknown.

    Second, the business or product is always there clearly to inspect and analyze, and an affiliate manager who cannot figure out whether a product is a complete failure or a possible success beforehand is being unfair to themselves as well as the merchant if they still claim they can achieve so many profitable affiliate relationships. Experienced affiliate managers can analyze the product and business beforehand, and inexperienced ones should not ask for 1000's of dollars of guaranteed fees per month in the first place.

    The argument for per-performance is simply one of a moral hazard. If the JV broker / affiliate manager don't know nor care about the success of the product or company, there is little motivation to work hard in seeking and recruiting the most suitable affiliates who will achieve high consistent business.

    Quote Originally Posted by JCrooks - AffiliateWindow View Post
    Getting the program rolling would have been a full-time job. When I ran the numbers based on what may commission would be, I'd have to sell thousands weekly just to earn a decent living, and the current site wasn't even doing that.
    Excellent, that is exactly my point. I only wish that more OPM's and affiliate managers would do that. If the business is too small and the product does not seem not lucrative for the managers, they can simply say so and either back out or tell the merchant to bear the risk.

    Being open to the offers of per-performance can make a difference. My business latest partnerships that I sought myself yielded between 0.05 and 0.1% conversion from their email lists, but the payout was huge for each enrollment (above US$1500). So one affiliate who had a good list of 28,000 senior executives generated 18 enrollments over two and half months of simply 7 to 8 mailings that we produced for them, and was happy to have made an extra US$27,000 for little to no effort. If an affiliate manager or JV broker can organize 15 such partners and they generate 250 enrollments in 6 months, even at US$500 per enrollment for the JV broker / affiliate manager, it would be US$125,000 for those 6 months. I do believe that is decent income. Why would a merchant like me prefer such a model that ends up making us pay so much? Because as I mentioned above to JoyUnltd: it neutralizes the moral hazard and ensures motivated self-investment.

    It is not easy for an unconnected merchant like myself to spend much time looking for partners and then managing these profitable relationships, and hence the need to find OPM's/affiliate manager/JV broker. We just need to know that this job will be handled with focus on achieving results not a check-list of duties, and pay-per-performance ensures that motivation.

    Otherwise, How do you believe merchants would be able to ensure that?

  21. #16
    OPM/Moderator Hectic GHC's Avatar
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