Building an Affiliate Program That Works

How to Build an Affiliate Program That Works

Here is a quick guide on what an affiliate marketing program is, why companies find them so valuable, and how you can set one up for your business.

 

  • What is an affiliate marketing program exactly?
  • Why do companies establish affiliate programs?
  • Performance-based and affiliate marketing statistics
  • Possible downsides
  • How to successfully build your affiliate program

 

What is an affiliate marketing program exactly?

 

Affiliate marketing is a way that you can have other Internet sites market your product or service for you, in exchange for a cut of sales. An example would be if you created an e-book that you sell for $25. If you offer a 20% commission, the affiliate would get $5; a 40% commission would earn them $10.

 

Why do companies establish affiliate programs?

 

Note that affiliate programs are not pay-per-click. Money only changes hands if the product sells. The companies that are paying affiliates like the straightforwardness of that approach – just like cutting a check to a 100% commission salesperson. The other basic reason why so many companies set up affiliate programs (as we have at KnownHost, actually) is that it provides broader reach, giving you access to customers who might not otherwise know you exist.

 

Michele Schism of Decisive Minds mentions that there are many different ways your affiliates might market:

 

  • Content marketing through blogs or e-books
  • Review articles
  • PPC
  • Marketing to a list

 

Specifically using the example of lists, Schism demonstrates how powerful affiliates can be. In the scenario she describes, you have a list containing 2000 people, and you also work with affiliates that each have lists containing 2000 people. “At a 1% conversion rate you could sell to your own 20 people and make $540,” Michele says, “OR you could sell through your affiliate’s lists giving them [a] 40% cut and still make $3240.”

 

To get back to the idea of a straight-commission salesperson, Laura Lake of The Balance mentions that these programs are often adopted by companies because they are risk-free. Payment is based on results; it’s tied to revenue that the affiliate generates.

 

Performance-based and affiliate marketing statistics

 

As you can see, the affiliate model is essentially simple, and businesses like that they can create greater exposure for their brand without exposing themselves to risk. How effective are these programs, though, really? Well, industry statistics make that pretty clear:

 

  • According to the 2016 IAB/PwC Internet Ad Revenue Report, the performance-based pricing model that includes affiliate programs accounts for 64.0% of all online ad revenue, versus 34.6% spent on impression-based ads and 1.4% spent on a hybrid model.
  • In a report Forrester Consulting conducted for Rakuten Affiliate Network in 2016, almost 9 out of every 10 advertisers described affiliate programs as either “important” or “very important” to their approach. Most publishers said that the affiliate model brought in greater than 20% of their yearly revenue.
  • The same Forrester study found that the affiliate marketing industry will expand at a compound annual growth rate of 10.1% through 2020, at which point its projected size will be $6.8 billion.

 

Possible downsides

 

Despite those incredible numbers, it is always smart to look at what could go wrong. What are possible negatives of affiliate marketing?

 

  • Control – Make sure that you are watching the behavior of your affiliates, advises SEO consultant Rae Hoffman-Dolan in Open Forum. Your brand can look questionable by association if a “rogue affiliate” is sending spam e-mails, creating inflated expectations (false advertising), or inappropriately using intellectual property. “Set strict promotional guidelines,” says Hoffman-Dolan, “and monitor your affiliate partners to ensure that they remain in compliance with them.”
  • Competition – You will start to vie against your affiliates for organic searches that have to do with your products. You will also have competition for pay-per-click ads, since 3 out of 5 affiliate marketers use PPC (as of 2011). It’s important to set parameters upfront on this topic, explains Lake. “For example,” she says, “if you don’t want them to bid on your brand terms be upfront about this at the very beginning of the program.”
  • Recruitment – Getting an affiliate program off the ground is not all that complicated. However, finding partners can be tricky: trust is key, and affiliate programs have a reputation for not always being straightforward. Lead and follow through with transparency.
  • Tracking – You must give your affiliates a portal that will allow them to monitor affiliate sales easily.
  • Labor – It will take effort and time for your program to succeed. You have to establish it, recruit some partners, keep everyone satisfied, and problem-solve when anything goes awry.

 

How to successfully build your affiliate program

 

OK, so those are challenges. What can you do to succeed?

 

  1. Move toward a niche. You may already have a product or service that you sell to your customers – in which case this step does not apply. If you are still deciding what to market, selecting a carefully defined niche will give your effort the focus you need to specialize and draw targeted attention.
  2. Partner with others in your niche. You want to work with other sites that have a following within the same field or same demographic characteristics as your product. The affiliate program should allow both you and your partners to succeed.
  3. Decide on a network or your own. One key decision is whether you are going to use an affiliate network or handle the entire program yourself, in-house. Hoffman-Dolan recommends that small business owners go with a network – especially if it is a first effort.
  4. Consider working with a program manager. It can also be a good idea to entrust an affiliate program manager to improve your outcome once you have chosen a network. These specialists can help you craft guidelines, come up with commission structures, and optimize your ability to attract affiliates. Program managers will basically help you get resources to your partners, check their compliance, and reduce likelihood of errors that could drive potential allies away. An affiliate manager should be able to inform all new partners on how the product can best be promoted. She should also be flexible when affiliates have their own input or ideas. You can find a manager via referral through an affiliate.
  5. Come up with great collateral. You want to be able to give your affiliates strong promotional materials. It should be incredibly simple for them to market your product. If you make it easy for them to get conversions, they will be more interested in heavily featuring your offer.
  6. Actively look for additional partners. If you get a few affiliates, you may start to think that your work is complete. However, for this project to succeed, it is important to keep recruiting. You can advertise in affiliate directories, along with promoting it on your site and/or listing. You can also reach out to companies that you think might make strong affiliates.
  7. Continue to build your relationships with partners. Make affiliates feel welcome and supported. Get any updates and new product information to them. Provide specific ideas on how best to market your offerings. Never delay with payment.

 

*****

 

Hopefully these suggestions on creating your own affiliate program have been helpful. We actually have an affiliate program in place ourselves. Would you like to consider becoming a partner, or are you just interested in how ours works? See the KnownHost Affiliate Program.

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Developing a Customer-Centric Business

5 Reasons & 7 Ways to Develop a Customer-Centric Business

Arielle is hiring a consultant for her business. She looks into a few different options, skims some reviews, and even calls a few references. One of the options stands out from the others, though. Arielle feels that it is focused on meeting her needs, and seeing the situation from her perspective, to an extent unmatched by the rest. She goes with the one that makes her feel that she will continue to be treated as the central concern.

 

How can you get the business of a customer like Arielle?

 

Naturally, you want a powerful vision and a strong company culture for your company so that you retain employees and your team is coordinated toward common goals. However, Arielle’s scenario is a reminder that these objectives are not always directly focused on the people who are truly your VIPs, whose satisfaction will determine your success and growth: your customers.

 

Just think about it from your own perspective: probably you have found yourself at certain points making purchases for which the deciding factor was customer experience. To look from the opposite side, probably many of the times that you decide not to buy from a business are because you don’t feel that you are valued and are perhaps being treated as a number.

 

Are you indifferent toward your customers? Shockingly, research shows that 68% of customers leave a certain provider because they thought the company was indifferent to their needs.

 

One company that has used the notion of prioritizing the customer for its branding is Salesforce – which offers the following five reasons for customer-centrism:

 

  1. Differentiation

 

Do you want to be memorable, to stand out and come across as the most impressive? A landmark Gartner report from 2014 found that customer experience is now the #1 thing that sets one brand apart from another, more critical than both product and price.

 

  1. Self-reliance

 

When online users set out to find a service to meet an immediate need, they want to be able to find a solution very quickly, as soon as they reasonably can. However, they also want to feel a sense of confidence and trust in the brand before they proceed. Answer customer questions right away on your site. Why? Because even back in 2010, nearly three-quarters of US Internet-connected consumers, 72%, said that they preferred getting answers themselves to contacting a company via email or phone.

 

  1. Prices going up

 

If you feel that you are in the discount barn of your industry, consider that the majority of people will pay more if they perceive that a company has strong corporate citizenship. According to a Nielsen survey, 55% of respondents said that they would pay more for services or products from companies that invest in sustainability or social causes.

 

  1. Retention

 

Make it as simple as possible, and people will return. You probably have websites that you visit to purchase certain household items, office supplies, or whatever else – returning to them because you find their purchase process seamless and straightforward.

 

Indeed, keeping it simple is not just a sales ultimatum but at the core of customer satisfaction. CEB determined that almost all customers, 94%, would return to a vendor if getting service required a minimal amount of effort on their part.

 

  1. Social integration

 

Responding to customers promptly will get their attention, and serving your customers means delivering a strong customer experience through each of your channels. After all, Bain & Company found that the amount a firm will make from a customer, on average, goes up 20-40% when the brand answers their questions on social media.

 

How can you become more customer-centric?

 

Here are ways you can take actions to achieve that customer-centered business that can yield the above results:

 

  1. Encapsulate your customer-centered mission.

 

You want to express your commitment to customers, a theme that you want to permeate your business, briefly but also meaningfully. Micah Solomon of consultancy Four Aces gives the example of Ritz-Carlton, which has the internal central philosophy, “We Are Ladies and Gentlemen serving Ladies and Gentlemen.”

 

  1. Expand on your core operating principle by brainstorming core values.

 

Broaden the sense of customer-centric purpose within your office’s culture by also defining a set of values that guide the way that your company sets about achieving its mission. Values should include the expectations for relationships with customers, employees, affiliates, and suppliers.

 

  1. Keep preaching these values.

 

When you are building a certain culture and want your employees to understand it and take it seriously, reinforcement is powerful. You can go over one value each morning or at least once per week so that this foundation of your company is not neglected.

 

  1. Provide evidence.

 

Now, you aren’t just “preaching” your case (#3), but making a case for it with objective evidence. If you want to motivate your team to care about the customer on a moment-to-moment basis, show them how impactful extraordinary customer service can be.

 

Study your numbers, and however you can, form a connection between a favorable customer experience and metrics such as retention, revenue, and social sharing.

 

Gregory Ciotti of Help Scout stresses that you want any examples and data to come directly from your own customers – so that it’s immediate relevant and clear how your organization has specifically succeeded when you’ve put customers first.

 

  1. Gear your team toward active listening.

 

You always want to perform some creative ideation through your own team, but it’s also crucial to make use of the perspectives of your customers. Their feedback shows you how to create more business.

 

That feedback is a key piece of a customer-centric approach. Peppers & Rogers Group co-founder Don Peppers said that being centered on the customer is essentially about knowing the viewpoint of the customer and looking out for their best interests.

In order to be able to do that, and to successfully problem-solve on their behalf, you need to apply the same basic rule you would to understanding any other relationship: Listen. How?

 

  • Train in active listening
  • Implement a robust feedback system
  • Poll your customers with meaningful questions
  • Speak with customers regularly.

 

  1. Visualize better customer focus.

 

Creating great visuals can drive home your primary concern with the customer and other ideals that underpin your culture. Solomon again uses the example of Ritz-Carlton related to this tactic. Employees are all expected to carry around the company’s “credo cards” (accordion-fold, laminated cards) throughout the work day.

 

Visuals are often text, as also seen with the highlighted Zappos core value that appears on each box. However, this conversion of values to imagery can also be the in-person colors used by the brand. FedEx uses orange shoulder belts in its delivery vans – cuing anyone who looks through the window that the driver is embodying the value of safety.

 

  1. Invest in a customer-centric company culture.

 

A well-run company will invest in recruitment and training, but many don’t actually put money or time toward conscientiously building their company culture.

HubSpot is so dedicated to the idea that customer-focused culture is valuable, it makes its Culture Code manual and manifesto publicly available.

 

Buffer is another company that places its customers at the center of its strategy, acknowledging strong customer service and using it as a source of motivation.

 

*****

 

Do you want to better place the customer at the center of your business? At KnownHost, we have seen our company flourish through a customer-centric culture and brand. Here is one of our customers, Jim Satterfield, President & CEO of Firestorm.com: “If Knownhost’s main goal is to provide customers, small and large, with the highest level of service and support, they have succeeded.” See our customer reviews.

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How to Grow Your E-Commerce Business Fast

How to Grow Ecommerce Fast – 11 Ways to Outpace the Competition

Well, this is basically the timeless question of the Internet for its function as a profit-building mechanism: How can you create fast e-commerce growth?

 

Generally, e-commerce is expanding at a fast rate. Year-over-year growth in online sales was 14% in 2015 and rose significantly to 19% in 2016 (2017 comScore study / Marketing Charts).

 

How can you meet and exceed that rate? This article looks at eleven ways to do that:

 

  1. Set reasonable expectations.

 

Everyone knows that growth rate is easier to achieve in the early years. That business truism is mirrored by the growth of a human being: the rate at which a baby grows during the first month (in height) is about 10 times the growth rate that occurs in a teenager.

 

Similarly, startups grow much faster than established enterprises. Here are the growth rates of difference sizes of companies from the RJMetrics report “2015 E-commerce Growth Benchmark” (an analysis of big data collected from the firm’s e-commerce clients):

 

  • < $1 million: almost 140%
  • $1 to $5 million: 40%
  • $5 million to $10 million: 25%
  • $10 million: about 10%.

 

  1. Go where the action is.

 

RJMetrics COO Jake Stein notes how key niche focus is for many companies. “Our report found that product-market fit emerges early, within the first six months of sales,” he says. “If you’re not seeing these indicators of rapid adoption from the start, it’s a sign you need to either change your product or how you’re presenting it to the market.”

 

To follow that advice, you may want to reconsider what you’re selling. That will probably mean tweaking your offerings but could also be a broader concern. At the 10,000-foot level, these are the 2016 YOY growth rates for major retail e-commerce verticals (comScore):

 

  • Watches and jewelry — 39%
  • Appliances, equipment, and furniture — 26%
  • Greetings, flowers, and gifts — 24%
  • Software — 24%
  • Tickets (to concerts/events) — 24%
  • Video games, accessories, and consoles — 24%
  • Accessories and clothing – 20%
  • Hobbies and toys — 16%.

 

Now keep in mind that we are talking about the speed of growth, not size. The largest e-commerce product category is clothing/accessories. Businesses selling those items made a combined $20.3 billion in revenue. The second biggest chunk of e-commerce is computer hardware. That one-two pair remained the same in 2016 as it was in 2015.

 

  1. Test and test some more.

 

When you are preparing for the launch of an e-commerce business (and, really, as time goes by), set aside money for analytics and testing. As you approach testing, consider things from the customer’s perspective, advises marketing consultant Samuel Edwards in Entrepreneur. Use split-testing to compare two or more competing options.

 

  1. Think globally, act regionally.

 

You can use Google Enhanced Campaigns or Bing Ads to change the way you bid on any geographical segment for ads via percentage bid adjustments.

 

Andrew Goodman of lead form company Sleeknote suggests reducing the amount you are bidding in poor-performing regions. Also, “continue adjusting segments until your chosen KPI, such as CPA, is roughly normalized to a target (either the average or an arbitrary target),” says Goodman.

 

  1. Leverage Shopping Ads within Google.

 

Again, it helps to consider that great mass of people flowing through the Google ecosystem with its Shopping Ads. Stefan Mancevski of marketing agency Ladder.io advocates these ads because they permit the display of your product image and price. That can help the CTR greatly because price is often the #1 concern of an online shopper. That simple inclusion of the price helps you draw in people who might otherwise think they couldn’t afford what you’re selling.

 

  1. Market with strong knowledge of your customer.

 

You have to think from the customer’s perspective and respect some of their basic characteristics or patterns, to deliver ideal messaging to them. Many companies do not closely examine regularity of purchases so that they can engage with first-timers in a different manner than frequent shoppers.

 

One example offered by Blue Fountain Media CEO Gabriel Shaoolian in Forbes is that a good way to interact with long-time customers is via discounts and promotions. Above all, your communications with various segments should express how much you value them. “Your existing customers are the lowest cost-per-acquisition (CPA) for new sales,” notes Shaoolian. “[W]hen you acquire a customer, you want to retain them.”

 

  1. Focus on SEO.

 

Keep in mind that the e-commerce economy is still expanding (remember, 14% and 19% respective growth in 2015-2016, as described above). One can imagine from the trends that the overall market will only become increasingly competitive. As times goes by, standing out will require ongoing visibility within the search engines; in other words, great search engine optimization.

 

SEO, like any tech acronym, feel a bit obtuse if that’s not your area of expertise. Keep in mind that this field has become more straightforward since the search sites have become more sophisticated via the incorporation of semantics (the branch of logic and linguistics concerned with meaning). This more highly intelligent capacity of Google effectively demoted keywords as context and intent of content moved to the fore.

 

While the need for specific keywords is not as important as in the past, consistent publication of fresh content on topics of interest to customers is pivotal. In fact, marketing leaders tend to frame SEO and content marketing within the same dual effort, with the real challenge being how to integrate the needs of the former into the latter.

 

  1. Prioritize mobile.

 

The mobile market has been, well, in motion during the last few years. Goodman mentions how much mobile use has advanced since 2013. At that point, attribution was a vaguer science: the devices and operating systems were inferior to newer ones; people were more nervous about mobile shopping carts, and responsive design was not as prevalent.

 

In that climate, mobile was an unsure investment. One of Sleeknote’s clients was slow to address that portion of the web and nearly paid a heavy price for it; they did increase their investment in 2016, or their revenue would have stagnated.

 

“For the month of March 2016,” notes Goodman, “mobile (smartphone) clicks now make up 26.6% of their AdWords spend, and 35.7% of their AdWords clicks, as against 13.8% and 17.6% a year ago.” (Clicks on tablets as a percentage of spend and clicks rose less dramatically, from 17.5% and 15.2% to 19.3% and 17.9%.)

 

Note that during that same period, mobile revenue at the company rose 140%.

 

  1. Think in terms of data.

 

Collecting information on your customers and prospects is critical in terms of the success of your site – but it is also a key component of preparation. You’ll be readier for future launches if you have taken the time to develop extensive databases.

 

  1. Design and brand for success.

 

Through a specialist marketing agency, you can rethink your fonts, logos, and packaging. As you review your collateral, think about how to better introduce humanity to your brand through a personality that couples with professionalism; that way you can impress and intrigue your customers on multiple levels.

 

  1. Choose cutting-edge, built-for-speed technology.

 

RJMetrics’ Stein notes how fundamental technology has been in helping e-commerce brands to grow in recent years. The example tools he gives are Facebook (or social media generally) and SaaS systems, such as those for split-testing and email platforms.

 

There’s another major aspect of technology he doesn’t mention, which is the infrastructure backing the site. The faster and more reliable your hosting is, the better you can deliver content and other resources quickly – leading to higher search engine results (since speed is a ranking factor) and better UX.

 

To fully make use of all the above tactics, we can help give you speed as a foundation. KnownHost offers fully managed SSD powered VPS hosting, leveraging the power of enterprise-grade solid state drives and virtual private servers. See our plans.

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Managed Hosting Prevents Maintenance Headaches

How Managed Hosting Can Help Prevent Maintenance Related Headaches

If you’re a small business owner, you often feel pressure to be a jack of all trades. This is both a practical manner and preference. You trust yourself to do the job right and you want that control. Also, hiring staff is an expense. If you’re at the point where you’re looking to launch a business online or at least a digital component, you probably already have at least a small team to make it happen. What the team does is obviously unique to your individual situation.

 

The question you have to ask yourself is, “Is one of those people on the payroll just to look after the server?”

 

Now, you may be wondering why you need a full-time employee just to deal with the server. Let’s just say there’s a reason why a managed VPS is one of the most popular hosting solutions for businesses. For those who aren’t so interested in the technical goings-on of what happens on a server, the perceived savings of going for an unmanaged plan often aren’t worth it.

 

What many business owners may not realize when setting up a website, whether it’s e-commerce or informational, is that it’s not just a “set it and forget it” arrangement by default. With a developer’s help and managed hosting services, yes you can reach that point. You and your team would only need to spend minimal time in the backend of the site. But, those are conscious decisions you need to make when planning your site rollout. The decision of what hosting provider to go with and what kind of hosting solution to sign up for is a critical first step. That’s why it’s so important to not necessarily look at just the monthly price of a hosting plan, but to also factor in the hidden costs you would need to pay if you don’t sign up for the hosting plan that best suits your realistic needs.

 

Let’s explore what those hidden costs are and why most business owners would be wise to opt for managed hosting over unmanaged solutions.

 

What Do We Mean by Hidden Costs?

 

When first looking to purchase hosting, your eyes immediately go to the big number on the bottom line that displays the monthly cost. That should certainly play a role in the decision you make. Any good business owner knows the importance of keeping overhead low. But, it’s important to point out that in the discussion of managed vs unmanaged hosting, unmanaged has some hidden costs that may not be immediately apparent.

 

We’ll get into the major differences between the two next. To put it simply, though, unmanaged hosting gives you login credentials and that’s it. So, nearly everything going on with the server is up to you to manage. This will be an everyday job. In order to keep your site online and working properly, you’ll need to dedicate a full-time employee to handle these rudimentary tasks. It may even require after hours work. That comes at a big cost. The loss of time and personnel resources are major hidden costs that can quickly add up and far outpace the comparatively higher monthly price tag associated with managed VPS hosting. The few extra dollars per month for managed hosting in comparison to unmanaged usually pays for itself.

 

Managed vs Unmanaged

 

When evaluating the pros and cons of going with unmanaged vs managed, it’s easy to get caught up in the weeds of an exhaustive list. By all means, weigh the arguments for each. The decision you make will shape your business. But, it may also be helpful to summarize the ways the two differ from one another for quick reference.

 

Unmanaged hosting gives you nearly complete control and responsibility over your server environment, for better or worse. Backups are on you. Migrations are on you. You can choose the control panel you want to use, but you’ll also need to install it yourself. You could even be responsible for figuring out why your site is offline if you’re experiencing downtime. In many instances regarding unmanaged hosting, the host is only responsible for hardware malfunction. Even upgrading software will be up to you. Having technical knowledge and an in-depth understanding of the OS is a pre-requisite for unmanaged hosting.

 

Managed hosting offers more of a hands off set up. It’s ideal for the less tech savvy and for those who don’t have the time to spend on managing the server. While you are encouraged to always take your own protective measures when it comes to multiple backups and security, your host will provide some assistance on that front. Typically, you get a daily backup and migration assistance should you need it. You have 24/7/365 monitoring should anything go wrong. If your site is suddenly offline, you have someone to call and that can investigate. You also have DDOS protection, which can help you thwart an attack in many of the most common scenarios. The only real downside to managed hosting is you are presented with the hosting company’s options for control panels and the like and you have to use them. If you’re not a tinkerer, that’s fine.

 

How Managed Hosting Contributes to Performance

 

A lot of factors contribute to how well your site performs. Traffic levels, bandwidth, CPU, and your coding are just some of the contributing factors to site performance. While not as direct an influence, don’t discount how managed services will help your VPS perform better. For example, you may see that 99.9% uptime figure and think that’s a great guarantee. That’s only possible with managed hosting because of the constant monitoring that occurs and the customer service you have access to. This is important because performance issues greatly affect your bottom line. This is especially true if you’re running an e-commerce operation. Downtime and slow speeds severely impact customer behavior, to say nothing of the lack of sales if no one can actually access the site.

 

Struggling with Downtime

 

No matter what industry you’re in and what downtime looks like to you, the results are the same. Downtime costs you a lot of money and it’s not just from lost sales. Also consider that page load delays can cost you significant revenue, and you can see why it’s worth having the peace of mind provided by leaving your server in the hands of the experts. In an unmanaged hosting environment, not only do you have to deal with the customer service issues that will arise from a site malfunction, but you’ll also have to figure out how to get the site back online at the same time.

 

Conclusion

 

There is more riding on your hosting solution than you may realize. While everyone recognizes the importance of having a website that is reliable, it’s also critical to your business’ success that you have the right infrastructure to support your personnel needs. Whether it’s hiring more staff or stretching your current staff thin by having them perform duties that are outside their job description, managing your server yourself is often too costly in both time and money. Let your hosting company manage your VPS environment for you. Contact us today. The team at KnownHost is here to partner with you so you can have the hosting solution that makes the most sense for your business. Ask us how our managed services can help your business grow.

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