Our Affiliate Program Wish List (continued, part 2)
2-Opportunity for follow-up business
The affiliate program method has been proven to be one of the most cost effective ways for Internet merchants and service providers to attract new business to their web site. In many cases, affiliate networks have exceeded the performance that other forms of web promotion are able to provide. A main reason for this is that with most affiliate programs, the initial commission paid on a referred purchase can simply be considered a cost of acquisition for a customer. Potentially, a lifetime customer.
With most programs, the affiliate only receives credit for a sale if and when a visitor follows a link to the merchant's site, and makes a purchase. At that point, many visitors will bookmark the site, and bypass the affiliate's site in the future as a matter of convenience. Obviously this model does not meet the expectations of most affiliates. The only way they can stay profitable long-term would be to send a constant stream of new visitors to the merchant's site.
An outstanding improvement to many programs, and the affiliate network model in general, would be for the affiliates to be able to earn follow-up commissions on purchases these new customers they refer make in the future. It is true that this type of 'residual' cost may eat into the profit margins of many merchants, but a variety of alternatives could be developed that meet both the merchant's and affiliate's needs.
The method affiliates would most prefer is that they earn, say, a 15% commission on the initial referred sale, and a follow-up 15% commission on all subsequent sales by the customer. If for some reason this is not feasible, perhaps because of the increased costs of the program or the low margins on a particular type of product, a reduced commission schedule could be used. For example, 15% on the initial sale, and 3-5% on follow-up sales.
Almost all online merchant would be able to absorb these follow-up costs, and at the same time GREATLY enhance the value of the program for affiliates. This would ensure not only a loyal following, but also productive promotion by affiliates on the merchant's behalf.
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