Question 1: How much commission should I offer in my affiliate program?
How much you offer will depend on the amount you can afford, taking into consideration the lifetime value of a customer, what your competition is doing and how attractive you can make your offer.
As a general statement, information products usually have a higher commission rate - often between 25-50% with the higher end being more common. Consumer products with smaller profit margins can be as low as 5%, but don’t often go above 20%.
But what you charge should be based on your own unique business. Here are some more things to help you come to a decision:
Sometimes it’s okay to pay a bit more for a first-time customer who will buy from you over and over again.
Always see what your competition is offering. You don’t have to get into a commission war, just be sure to make your program very attractive through good conversion rates, unique and useful promotional tools and other attractive features.
Question 2: What kind of affiliate tools should I provide to my affiliates?
The simplest answer is: Give them what they want.
Talk to your affiliates and see what they need to serve their unique audience needs, and where possible, provide it to them.
For hard-hitting promotions, you can craft email copy, conduct live teleseminars with content and sales pitch, special reports, etc.
For the content-starved webmaster (and there are plenty out there), give them things like articles, free ebooks and other informational content.
The important thing is to listen to your affiliates and watch which tools convert best.
Question 3: Can I have an affiliate program with a service-based business?
Sure you can. If you have a profit margin or a lifetime customer value that allows you to pay commissions, certainly.
If you have services available that are at a set price, it’s easy to automate everything and run your program, just like a product-based one.
If you charge by the hour or have to give project estimates, it’s a little tougher to automate completely.
Here are a few options:
- Have a script that can track who referred your potential client to you. Ex. Affiliate recommends your service through a tracking link. Potential client clicks the link, checks out your website and fills out a form for more information. Your system tells you who referred the client and if they purchase your services, you can give the affiliate a commission.
- You could do it as a pay-per-lead opportunity where the affiliate is paid a smaller fee for every person that fills out the form for more information. This would be easy to automate in most affiliate systems that can handle pay-per-lead transactions.
- Don’t want to go with a full-blown affiliate program? You can institute a client referral program where you simply allow your clients to recommend your service, in return for credit for services. When a new client comes to you, you ask where they heard about you and you add a credit to your referring client’s account
An affiliate force is an incredibly powerful thing and when you consider you don’t have to pay affiliates anything until they produce results for you, it’s one of the best deals going in Internet marketing today. Plan your program well and you’ll soon have your own active force of affiliates bringing you new customers every day.
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For more answers to your questions about starting and running your own profitable affiliate program that your affiliates will love, claim your copy of Alice Seba’s step-by-step Affiliate Manager Sweetie course at www.affiliatemanagersweetie.com
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