So I wasn’t planning on doing this post, but one of my favorite readers and commenters asked me to cover this topic. The people or Affiliates that sign up for programs and only have sales when they buy the products themselves, and the second type which are people or Affiliates who buy the product through their own links in order to know what the process is like so that they can properly review the product and the shopping process. Here are the main issues with this and where the value add can come in or where it can be lost.
- Is your program built for customer acquisition
- What are your margins
- Should you commission the Affiliate when they are trying to give legit reviews and want to try the product
- What if the person isn’t an Affiliate but a regular customer who knows what Affiliate Marketing is
- They could be testing tracking
- Make sure your terms and conditions are clear
- How valuable is the customer to you
Is your program built for customer acquisition?
One thing you need to ask yourself and decide before you launch your program is if it is a customer acquisition channel or a sales channel. If it is a sales channel than you should have room in your margins for self shoppers and your sales will still increase (after subtracting coupons, commissions, network fees, etc…). If it is a customer acquisition channel, then the self shopper may give you a loss because they only shop through their own Affiliate links and your margins are usually much slimmer. If your program is a customer acquisition program, you should probably only commission on the first sale and no others or reverse the sale and make it clear in your terms and conditions that you do not allow shopping through your own links. You’ll also need to pay out large pieces of your margins to make up for the non repeat sales for the other Affiliates who have loyal readers if you have new products or upgrades since they won’t get credit on a second sale. You also need to then consider if you will be working with coupon sites and loyalty sites since they can sometimes never send you a full customer but only repeats.
What are your margins?
If your margins are slim or break even, letting your Affiliates shop through them, use coupons and adding in network and management fees could create a loss for you. Make sure that you can afford shoppers who always shop through their Affiliate links in order to keep your Affiliate program driving revenue and not causing a loss.
Should you commission the Affiliate when they are trying to give legit reviews and want to try the product?
To me you should always pay this one out. Not only does it show that they have a real interest in your product, but they also have a genuine concern to bring quality content and honest reviews to their readers and website visitors. When you find these types of Affiliates, you may want to see how big their readership is and on the review post do a giveaway for the product or your store as well within their review, just make sure that they also have an FTC disclosure to make sure you don’t get in trouble.
What if the person isn’t an Affiliate but a regular customer who knows what Affiliate Marketing is?
This can be tricky. If you publicly advertise or clearly display your Affiliate program on your site, some of your customers will join just so they can save the amount of commission you give. Now you are losing money on the sale, but that doesn’t mean you will actually have to spend a penny when they tried to get a discount by using an Affiliate link. Many programs have a minimum payment threshold and most of the time one or two purchases won’t reach that minimum payment threshold. If the customer wants their 10 – 15% back from using their Affiliate link, they’re going to actually have to sell your product. A great way to do this is to recommend they promote it to their friends. If their friends like the product and they have their friends shop through their links, all of the sudden they meet the minimum threshold and you have new customers. If they don’t make any more sales and never reach the threshold, guess what, you still don’t need to pay them, depending on your terms and conditions.
They could be testing tracking.
I am an absolutely huge fan of Aweber, but unfortunately it did not track for me with my test purchase and their Affiliate Manager was extremely unprofessional and unknowledgeable when dealing with my questions about it. He didn’t want to listen or even pay attention. Luckily their customer service department took care of it and helped me with the issues and listened to me. So when it comes to doing posts and guest posts about companies that I recommend for small businesses, they are almost always left off the list when I’m allowed to use Affiliate links since there are plenty of other companies I love that I can be sure will track. Many serious Affiliates will make a test purchase to see if tracking is working, especially with in-house affiliate programs, which is why if they are just making a test purchase to test your program’s tracking, you should commission it and not commission the second or third sale and make it clear within your terms and conditions. By not commissioning the Affiliate on their test purchase they may not trust your program or its tracking and you may miss out on a potentially great Affiliate partner, or a lot of reviews and guest posts.
Make sure your terms and conditions are clear.
The most important thing to remember with allowing or disallowing your Affiliates to buy your products through their own Affiliate links is to make sure that your terms and conditions are clear about it. I always recommend that you should allow your Affiliates to shop at least once through their own links so that they can experience the process and give a real review. You can always end the repeat payouts after the cookie life is over and there shouldn’t be any hard feelings. The important thing to remember is to be clear about your Affiliates shopping through their own affiliate links in your terms and conditions and to point it out to them if they have an issue with it.
How valuable is the customer to you?
One thing that you might not realize is that if your product is replaceable with a competitor, the discount with the Affiliate link could be what brings that customer back to you. If you won’t commission them or give them a discount, you could end up losing them to a competitor that will give them a commission. If you have limited product with high demand, you could easily sell the product to the next person and get the full amount and come out ahead. If you are like the rest of the world, you could always work out another deal with the shopper like a 5% off discount if they commit to buying in bulk instead of a single purchase or get them to agree to a continuity plan so you are guaranteed the sale over and over.
The bottom line when talking about commissioning Affiliates who shop through their own links is to consider if that meets the goals of your program. Are you still profitable with them shopping through their own links and using coupons? What was their intention of using an Affiliate link and did they combine other discounts like a coupon code with it? Could they drive more sales by referring friends through their links to earn a check and how valuable is the customer to you if you do have the margin to afford them shopping through their own Affiliate links? If you don’t commission them, even though you were profitable with the sale, you run the risk of them leaving for a competitor if the competitor will pay out the commissions on the sales that come through their own Affiliate links.