What are Affiliate Programs
With the varieties of jargon being floated it would be possible to get lost in the evolution of terms used especially in the digital sector. One of the more popular though not as well understood is marketing affiliation terminologies. Confusion can sometimes be in determining if the site owner is an affiliate or a marketer.
By definition, an affiliate is someone whose site is being employed by companies to serve as its search sites for potential leads or customers. An affiliate is a small website owner who develops linkages and advertises this with blogs, banners, through Ezines and in his website to gain exposure and potential leads for a product that he accepted to advertise, sell and refer to a merchant. The merchant then pays him the commission for the referral.
The merchant on the other hand are companies with products that will share revenues, often in percentages agreed on for a particular product, with the affiliate.
This strategy has proven to be effective in maximizing exposures for a product and has become a good sales tool for a company that have, to great lengths, augment its selling functions.
The three basic affiliate programs are:
· Pay per click - the affiliate receives compensation/commission for sending or referring a customer to a merchant's website. The merchant handles deliveries and follow though.
· Pay per sale - the merchant pays the affiliate when the referral ends in a purchase.
· Pay per Lead - not all merchant practices this program although those who are also pays for a quality lead.
An affiliate marketer's website provides the content services, information and entertainment to a customer as required by the merchant. The merchant handles the inventory, delivery and other services that are normally practiced by sales and marketing companies.
Some merchant pays a token amount (say $15 for a purchase), while others provide a certain percentage in sales (example is 1% for the sale of a computer).
Usually, affiliate programs ensure that the affiliate will be able to track the customers the affiliate have referred and the percentage of those that actually lead to sales. Conversion rates are shown which provides transparency in transactions. The benefit for the merchant is that his products become more competitive in the market because of increased exposure that is critical in all sales and marketing outfits.
For an affiliate to be successful, his site must generate very heavy traffic. It is not unusual for a site to be visited a couple of a hundred times before a sale is closed.
For many marketing affiliates about one in five turns out to be a good lead. This is about the normal ratio because customers visiting and buying through the web has a frame of commitment different from one who shops in traditional outlets.
Traditional outlet shoppers for example will already have invested time, gas and a more determined attitude to shop than web shoppers. In comparison, web shoppers do not have to leave their houses and has a variety of sites to visit and select.
Someone joining the affiliate program can choose the tracking system he is going to use. Sales can be tracked through HTML in the merchants shopping cart.
The success of affiliate - merchant relationship depends on perceived equitability. Affiliates require good and immediate compensation for their services as much as the merchants are being given fair customer leads and transactions.
The most common complaint of merchants today is being sent old and recycled leads that clogs his traffic but does not add to his business.
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