Six Steps to Starting an Affiliate Program

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Dell Computer Corp.'s announcement last month that it would pay Web site owners who drive traffic to www.dell.com a 1-percent commission on resulting sales was a sure sign that affiliate programs are going mainstream.


The following points will guide you through the process of selecting potential partners and setting up an affiliate program:


• Program development. Decide how you will select affiliates. Will you accept everyone into your program or will you set up criteria to judge sites? Establish revenue-sharing splits according to profit margins, and decide whether to pay on a transaction, clickthrough or per-action basis. Include the length of relationship, payment terms and exclusivity in the contract with affiliates.


• Tracking. Several firms offer sophisticated tracking software or service solutions. Such a program needs to track impressions, click-throughs or transactions from the affiliate site to your order page and to provide real-time online reporting of commissions to the affiliate sites.


• Storefront development. Create the graphic elements for affiliates' sites. Develop four to six banners, buttons or other graphical elements for each offer. Copy should be coordinated with affiliates' content for textual links. You may group some products into a full page ad, called a storefront. The more you help affiliates, the faster they will set up the link and the more likely they will be to support your program.


• Marketing and promotion. Create a marketing campaign to brand and promote your affiliate program to potential sites. List your program with affiliate program directories. Identify, qualify and solicit new affiliate sites. If you are planning a media campaign or banner program, include affiliate banners in media placements. Ensure the banners coordinate with corporate branding efforts. Also coordinate with other online marketing efforts, such as inbound linking or newsgroups.


• Affiliate relations. Work with your affiliate sites. The process begins with site approvals, negotiations and enrollment. Help them set up your offer on their sites. Getting your offer presented in a favorable location on the affiliate site is crucial. The more fully your company expresses its responsiveness and support, the more successful the program will be. Consider a monthly affiliate newsletter and e-mail system for keeping in touch with partners.


• Program management. This will be automated via the selected software or service provider. However, tracking, analysis, reporting and affiliate questions will still need attention. You will have to reconcile the sites' commission accounts at set intervals and make payment to sites for the balance in their accounts. Additional issues may include responding to e-mail and general customer service.


Overall, the time to set up a program can range from four to six weeks. Thereafter, the marketing and management of the program can take approximately four to 15 hours per week. The time varies based on number of affiliate requests and your policies for the program development.
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