Traditional tactics can boost affiliate efforts
Consumer packaged goods marketers use various programs to raise awareness and boost sales of their product lines. Some of these strategies, such as product positioning and relationship building with partners, are equally relevant in the performance-based world of affiliate marketing. These concepts can be applied to virtually all affiliate campaigns to improve results.
From a positioning perspective, a CPG sales team spends a lot of time in stores jockeying for prime shelf space. Kellogg's does not want to see Tony the Tiger's smiling mug next to generic brand corn flakes. Products featured prominently are more likely to sell, plain and simple.
The affiliate marketing equivalent of prime shelf space can be achieved with high-visibility promotions or optimization of the most popular categories on a publisher's site. Sears.com won accolades in 2005 for working with affiliate publishers to "build out" new product categories. Just as a CPG sales force would offline, the affiliate marketing team worked to help top affiliates understand the opportunities in two key categories: Tools & Hardware and Lawn & Garden.
Both categories were set for rapid e-commerce growth, and Sears.com sought to help affiliates increase profits by selling Sears.com products more effectively. To gain a greater understanding of the space, the team surveyed affiliates about projected growth rates, the breadth and quality of the Sears.com product line and the chance to earn more by featuring these high-growth categories prominently on their site. Some affiliates opted not to change, but 60 percent of the selected partners participated in the category build out.
Participants realized impressive returns immediately. The Sears.com Tools & Hardware category growth outpaced the industry, generating nearly 60 percent growth in sales over the prior year. Affiliate publishers also won big. Sears.com improved its position on the "affiliate shelf." It was even able to move entire departments to the "front of the store." By leveraging proven offline strategies, the team increased affiliate sales.
Offline sales channel compensation strategies are another area that directly applies to affiliate marketing. Identifying and nurturing strategic accounts, for example, can transform an affiliate program.
Major national offline retailers naturally receive preferential treatment through bulk discounts and other special arrangements, as their reach likely will translate into greater sales volume. The nation's leading candle manufacturer, for example, would not likely spend the same time courting Mom and Pop Candle Shop in Any Town, USA, as it spends courting a major retail chain. The time invested in developing sales channel relationships and the concessions made during negotiations directly reflect the potential sales growth.
The same holds true for affiliate advertisers. High-traffic sites generate more impressions, the online equivalent of getting more shoppers to walk the aisles. An advertiser places its products in stores that attract its target customers; affiliate marketing provides an even better ability to target.
For most advertisers with an affiliate program, it is routine to identify a list of priority affiliate publishers. But advertisers should do more than know their top 25 affiliates. A smart affiliate marketer identifies the high-potential affiliates that haven't made the top 25.
Once a list of top affiliates is in place, advertisers should focus on this group to optimize relationships and improve performance. Merchants should consider special discounted pricing plans, volume-based commission incentives and unique offers for this group, as the potential sales warrant the extra attention. In the offline analogy, a small enhancement in merchandising strategy with one national retailer usually greatly outpaces efforts to boost sales with small resellers.
For many traditional marketing professionals, affiliate marketing sounds like a whole new ballgame. But it's just marketing. Though there are differences compared with more traditional mediums, the goal is the same, as are some of the strategies. Advertisers can use the same tried and true best practices of the offline world to optimize affiliate strategies. n
Chris Henger is vice president of affiliate marketing for Performics, Chicago, the performance marketing division of DoubleClick. Reach him at firstname.lastname@example.org.