Top 3 reasons companies claim that the affiliate marketing channel does not work

Transcription of today's episode:

This is Dustin Howes and today I’m going to debunk the 3 biggest reasons companies claim that affiliate marketing doesn’t work.

Reason #3 – Only coupon sites joined. Coupon sites were all the rage 7 years ago, snagging last click attribution and making the affiliate channel look awesome. And companies loved the volume…until they didn’t, and learned the coupon sites are bringing in sales they probably would have got anyway. But guess what, as an affiliate manager, you can control the flow of what affiliates join the program, so keeping coupon sites out of the program is option. Another option is taking away the coupon field at checkout, preventing people from leaving your site to go searching.

Reason #2 – Too much fraud. Some companies have the unfortunate experience of affiliates creating sales with stolen credit cards, leading to chargebacks and commissions paid out on fake sales. That isn’t a fun experience, and if you don’t have a program in place filtering sales for red flags, you run the risk of this happening. Luckily you have the luxury of adjusting the terms of your program to prevent this type of fraud from happening. For example, the locking period of the commission should be long enough to ensure the payment was processed properly before the commissions are released. Taking proper steps to prevent fraud is much easier than reacting to it after it happens. You can learn more about fraud here.

Reason #1 – Growth is too slow. When companies decide they want to open an affiliate channel, they have grand ambitions of what this channel should do in terms of volume. They’ve seen PPC and Facebook ads generate great ROI and have immediate impact, so why shouldn’t affiliate be any different? The best answer I can give you is that you can’t force people to promote you instantly. There isn’t a magic activation button to make affiliates whip up a campaign. Good affiliates are professional content creators that need time to dedicate a well thought out campaign, which includes creating the right angle for their audience, optimizing the content for search engines, editing, launching and promoting. And they are doing this all on a pay per performance basis, so if the campaign flops, they are burning hours without a payout. That is a lot to risk on their behalf. Plus, they are probably promoting dozens if not hundreds of other companies, so prioritizing your offer is going to require something super compelling. The bottom line here, the affiliate channel is a long term play that requires time to ramp up. Anticipate a minimum of 6 months until your going to see real needle moving results you are looking for.

So those are the 3 most common reasons companies claim affiliate isn’t working, but the real reason behind it all, is mismanagement. Contrary to popular belief, the affiliate channel in not a set it and forget it situation. Affiliate programs need love and affection to flourish; you can’t just go tell your junior marketer to create and run the program when they don’t have any idea what that are doing. Yet I’ve seen this time and again where companies try to cut corners, throw paint on the wall and hope a Picasco shows up. Good luck with that. 

For those companies that recognize the power of influencers and invest time and resources into the affiliate channel, they will be rewarded. I’ve managed dozens of programs over the last 10 years and been able to turn every one of them around. I was able to master these techniques and turn my expertise into teaching others to do the same with their program. If you’d like to learn these secrets, check out more at performancemarketingmanager.com

Good luck out there!