5 reasons merchants love affilaites
I was talking recently with my coder dillsmack about how badass it is to be a merchant right now. You have all these affiliates breaking their back to drive traffic to your site so you can acquire new customers. They are doing this all on a “chance” they will make money. Meanwhile these merchants are RAKING in cash with all the new customers they are acquiring.
I put together a little list of the top reasons why merchants love affiliates:
1) New vs Returning Customers - Remember the old saying about how a new customer is worth tons more then a existing? Well the reason of course is because once you acquire a new customer they feel comfortable with your system. I know when I see a special deal somewhere I will go back to amazon.com to see if they sell the item just so I dont have to fill out ANOTHER sucky profile and all that crap.
2) Affiliates will spam market everyone for you and you have complete plausible deniability with the affiliate company.
3) Affiliates will leverage their media buys and PPC experience to drive tons of traffic to your site for a CHANCE at a profit.
4) If a merchant breaks even to acquire a new customer this should be considered a overwhelming success. Its not only likely that this person will buy again (at which the merchant will receive full price) but also the customer will most likely tell friends.
5) Residual and reoccurring revenue - Most offers do not give reoccurring revenue past 45 days. This means that after a merchant gives you whatever for their period then they get the sales at full price forever.
Anyway just something I was thinking about I wanted to spit out.
- 18 Comments. What say you?
- RSS
- Delicious
- StumbleUpon
- Furl
- Digg
1 is true of any advertising/marketing though whether it be phone book, online etc. It’s easier to plan based on a one-off cost than it is for recurring revenue. There are plenty of businesses where most (eg 95% of customers) will just be customers once (especially the ones who don’t market to their existing customers).
2) You missed out good PR when the story that (insert well known brand) spammed people by outsourcing to a marketing company who bought a list of a million email addresses. However cynical points aside I’m sure most businesses are too protective of their reputation to deliberately set out to do this.
3) Generally I’d say no (but then you probably know more about click abitrage than me). Yes plenty can be made through it although I’d say that generally affiliates run websites and just put the affilliate ads on their or newsletters they run. Most people are too scared to get burned doing click abitrage or don’t have deep enough pockets, time or the mathematical skills to do so.
4) If a merchant is making a profit though their payout to the affiliate will be less than they’re making on the new customer.
5) It’s not always the case. I seem to remember one that did residual income for a year and other advertising networks that offer lifetime cuts of the revenue generated from people you refer to them.
[Reply]
Thanks shoe - now you make me somewhat regret all the time I spent working on the affiliate side of things - really, I need to create my own products…
[Reply]
#6)Thy dont know how to spell.
[Reply]
So true. Huge advantage goes to the merchant. Esp when the merchant landing page has a phone # in plain site, then you send the visitor, they see the # and pick up the phone and buy. Best programs have no # to call.
[Reply]
Most affiliate programs are rip offs for publishers. Even if the publisher “thinks” he is making good money, he is most likely getting ripped off.
[Reply]
In my experience it costs more to acquire a new customer than it does to keep an existing one. Think about all the businesses that bend over backwards with great deals for new customers.
As long as the merchant did their job right the first time they likely to return. Plus after each sale you have added one more name to the list that you can market to.
[Reply]
Fortunately, spelling has never made anyone a millionaire.
[Reply]
Shoe, The list is pretty general but definately worth the read for anybody to either learn or simply to remember, especially since none of us are thinking of this on a daily basis.
I honestly feel that any product can be sold online just as easy as offline (if not easier) as long as the sales copy is strong (along with the product, of course, for customer retention) and you’ve got plenty of affiliates (or Super Affiliates for that matter!).
Definately a good blog post.
[Reply]
6) can be an advantage in getting cheap PPC (or organic search engine traffic) from misspelt phrases.
[Reply]
While the affiliate/merchant partnership is a great one for the merchant, it is also good for the marketer. For anyone who has run their own business selling and marketing their own product it can be brutal and the headaches astronomical. The Affiliate Publisher has much more control over their daily existance and can sleep better at night. I have done both, and I don’t feel envious of those merchants who think they are getting one over on me.
[Reply]
thanks clint- There is more I wanted to add to it but at the same time I wanted to get something down. I was thinking more for ppc affilaites what a great time to be a merchant
[Reply]
I dont think i have ever thought about that before. On one of my dating sites I have an affiliate program but its still new so I have no new sign ups yet. This will be my first attempt of paying people to promote me….
Nice article as usual
[Reply]
You bring up some good points. The merchant is making so much money and all it takes is the chance to pay out a little bit of money to people that really want to earn money. Makes me wish i had some product to offer!
[Reply]
This almost makes me want to launch my own afiliate marketing effort to get new customers!
[Reply]
I run an insurance affiliate program that gives 5% commission each year for life.
[Reply]
Nise site!
[Reply]
Hey All ! ! !
Successful people say “Time is money”,
go Clock ,
and make sure that …
[Reply]
[...] 5 Reasons Merchants love affiliates [...]