Help! Affiliates Want To Grow My Business!

I tend to find that if I’ve got my fingers in enough pies, opportunities come thick and fast.

I was talking about the affiliate network, Paid On Results, last time out, and one of the niche merchants that I’ve been working with over at POR is Divorce Online.

Founded by Mark Keenan, an entrepreneur and senior family law practitioner, in 1999, Divorce Online is a company that very early on realised the opportunities afforded us all by the internet. Fast forward to today and Divorce Online handles a quarter of all divorce filed without a solicitor and 1 in 8 of ALL divorce petitions filed in England and Wales. It’s an incredible success story – and one that I wanted to be part of.

It’s a market that I’ve been interested in for a number of years now, but until I found Divorce Online’s affiliate program on Paid On Results, I had been content to earn some pocket money from the likes of Quick Divorces via Google Adsense. In the two months I’ve been with Divorce Online though, I’ve earned £141.25 – not a fortune, but enough to make me realise that if I developed the site further, there was money to be made.

Then opportunity came knocking. While doing my usual rounds of the forums, I found Divorces.co.uk for sale on Acorn Domains. It’s no secret that I rate quality generic domain names that do what they say on the tin, especially if they are what I call category killers – domain names that sum up a market in one or two words. Divorces.co.uk may not be THE category killer, but it’s certainly one of them. The fact that it was an already established website made it all the more attractive.

Suffice to say, within a few hours of spotting it, I had agreed to buy it and duly parted with a four figure sum.

The site itself didn’t come with the domain so I’ve been busy this week, stealing hours here and there, and putting together my own site so that it can start earning its keep from the off. It’s not completed yet, and I’ll be revisiting it many a time in the coming months to add content and to tweak things here and there, but I’m happy with what is basically a simple clean design aimed at converting visitors into customers. Fingers crossed, it will do the trick.

In a sense, I’ve just invested a sizeable chunk of money, not to mention my time, in promoting another company’s business. This is what thousands of affiliates do each and every day for merchants. If it all goes wrong, I pick up the tab. If it all goes right, Divorce Online will pay me a commission per sale.

I don’t believe that affiliate marketing is a no risk strategy for merchants – although in truth most of the risks can be avoided by doing the correct maths in the first place. But compared to most other forms of marketing, it is a very low risk strategy. Afterall, you only pay when a sale is made. You can employ an army of salespeople on a commission only basis – many of whom will be going that extra mile for you in niche marketing areas that you as a merchant might not even know exist.

But it goes further than employing mere salespeople. Affiliates by their very nature are entrepreneurs. They take calculated risks on behalf of merchants every day with their own time and money. No other salesforce on Planet Earth invests as much of their own time, money and energy promoting someone else’s business. Imagine having an army of entrepreneurs at your disposal willing to invest their own resources to see your business grow. That’s what affiliate marketing offers you.

That’s why it was disappointing to receive yet another Dear John email last week – this time from Next. Apparently I was measured against various “KPI’s” and I didn’t come up to scratch. For those who don’t carry around a lexicon of acronyms, KPI stands for Key Performance Indicator.

I will never understand why merchants cull affiliates because of lack of sales. To me it’s no different to banning shoppers from your store just because they haven’t purchased anything from you before. There was an intelligent thread about this over at A4U (I’m liking the new look by the way!) and I take my hat off to Matt Bailey at i-level for taking the time and trouble to explain Next’s reasons for the cull (yes I know agencies and merchants don’t like to use the word cull, but I like to call a spade a spade).

Apparently, although as an inactive affiliate I don’t actually cost Next anything (no sales equals no commission paid), the possibility that I might become active and generate sales might cause problems because Next have a capped budget. In short, they only want to drive so many sales through the affiliate channel. If that sounds like madness to you, I’m in good company. It’s like closing your shop early because you don’t want any more customers coming through the doors to buy things.

Why would any business put a cap on sales unless it was related to stock levels, customer service issues or the like? Well, in the case of Next, it’s because they are worried that they will be paying commission to affiliates for sales that were going to be made anyway. This makes no sense to me because whether your budget is capped or uncapped, you can’t prevent this. In fact, it’s a problem that is inherent with any form of marketing. The leaflet that was handed to me in the street yesterday gave me a pound off a sandwich – a sandwich I was going to buy anyway. That newspaper ad telling me what was on at the cinema. I was going anyway. Such is marketing. All the metrics in the world don’t change this simple fact.

Another fear seems to be fraud. Apparently, Next have been stung in the past via affiliate marketing and don’t want it to happen again and so have capped their affiliate budget. Again, this sounds more like an excuse than a genuine reason. Do they limit the number of sales in their stores each day because of the impact of shoplifting? Of course not. They do all they can to combat shoplifting while still generating as many sales as possible. By all means, weed out affiliates who abuse a program just as you would a shop assistant taking from the till. Just don’t cull decent affiliates any more than you would sack the entire store’s staff because of the actions of one cheating shop assistant.

The truth is that there are too many merchants who simply don’t value affiliates and the potential that they can bring to the table. A newspaper ad costs money and so is valued. Affiliates are “free” – and so are undervalued. Next have shown how little they value the affiliate channel not only with their current cull, but by past actions such as reducing commissions in the run up to Christmas.

Funnily enough, I spent another four figure sum on a domain name at the start of this year which will be used later this year as a fashion website. Of course, when it launches, I won’t now be promoting Next. I will however be promoting their competitors.

Talking of domain names, a quick warning to close with. Watch out for renewal notices coming through the post from a company called the Domain Renewal Group who operate out of a mail box address on Gloucester Road, London SW7. I’ve had five this month – all marked Domain Name Expiration Notice and asking me to renew my domains. Basically, they are trying to get unsuspecting recipients to renew their domains through the Domain Renewal Group instead of their usual registrars – and at far more than you would ever want to pay to renew your domain names.