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The Affiliate Playbook (cont'd)
· Either right before or right after you get the white label (at the very least be in talks with them) start aggressively testing landing pages. Start with 2 or more radically different designs and then pick a design winner and then test other elements like hero shots, call to actions, button language, placement of items on the page. Before starting this, you should have invested in SSL certificates and be landing in a secure environment and displaying the security seals prominently to let visitors know you are serious. If you cannot get a 30-50% increase in conversion with your landing page, you are not trying hard enough.
· Between the 10% security seal boost, the 10% white label boost, the 30% boost to conversion from testing the page, you should now be pulling yourself back to even and even turning a small profit, dont spend it just yet though. Just like with the affiliate network, you need to establish a baseline of consistent results where the merchant starts to assume your volume is always going to be there.
· You have worked with the merchant for 2-3 months and they are treating your volume like their volume (trust me this will happen). You have flown to corporate HQ and met the director or VP who the affiliate manager reports to, you are now negotiating with him rather than through the affiliate manager who has no real power in most cases. You need to let it be known that you could drive a lot more volume with a decent sized payout increase. They will salivate at the idea of volume, but will also be hesitant to give you a big boost. At the same time you are seducing the VP, you are making inquiries to one of your largest competitors about moving your volume over, you want to get a white label from them from the start (they are poaching an affiliate which is different than working with a small guy). Before you move your volume over, you call the VP at your original merchant and “give him a heads up” that you are going to test XYZ (tell them the name) for a few days, but you dont want him to worry too much, you will turn the volume back on in a few days, worst case a few weeks. You have now caused him to sweat and think that he might lose you. He has already budgeted in your volume and those resulting profits to his boss, he has probably mentioned to his boss that their could be more volume if they were willing to pay up. Now the choice almost becomes nothing from you or pay you more.
· In almost all circumstances, you will probably want to work long term with the same company and not jump around to the highest pay out all of the time. That does not mean you don’t flirt with the others and even have a few “test runs” for a few weeks every so often. Don’t seem fickle or emotional, just act like you are a businessman (which you are) and you are looking out for your own interests as good business (which it is) and you will soon be viewed as a strategic partner rather than an affiliate.
· At some point it will probably make sense to go to some sort of tiered pricing structure. Make sure you can hit these targets. Do not get paid $x for first 10,000 units and $y for units 10,001 - 15,000 and $z for 15,001+. Instead you want to hit a tier and get paid retroactive to the first unit. They will resist, but this is imperative for you. It means that sometimes you can take a loss per unit the last few days of the month and drive a ton of volume in order to hit your tier so you make a greater overall profit. The reason this is important is that the merchant sees these volume surges and starts thinking how they can get them every day instead of just the last 3-4 days of the month, then you are on for another round of negotiations. Always have a tier you have not yet met. When you start hitting the last tier, time to start negotiating for a new tier.
· In time, the merchant will get addicted to your business, they will spread their overhead across all of their traffic (much of which is really your traffic) and start seeing economies of scale. This is when you really have leverage. Dont be a bad business partner, just dont be a meek one either.
· The last 4-5 bullets I have not mentioned continual testing of things like the form, possible cross-sells, gathering an email list, retargeting, and a whole host of other stuff. Our philosophy is that we have to increase conversion by 20% each year to just stand still, once you start standing still, others start to pass you and you start to lose your leverage. Once you lose leverage, it is almost impossible to get it back. Never stop testing.
OK I want to thank both of the people who made it to the bottom of this post. It is obviously not exhaustive, but it is a reasonable series of steps for how to start as a dinky small fry affiliate today and 18-24 months from now be writing your own blog and posting a big check. Of course you will be doing so well you might also think, being rich and unknown with no competition may just be better than rich and famous with 100 new people entering your space hellbent on killing your margins…
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