Affiliate Relationship Management – Creating Value by Supporting Valuable Affiliates

The key to successful Affiliate Relationship Management is creating, growing and maintaining a good relationship with affiliates. However, given the human and other financial resource constraints, it is essential to devise a proper relationship management strategy that aims to establish a varying degree of relationship commitment based on the relative importance of the affiliate to the business.

In my previous articles we have established that affiliates fall into the following segments:-

Low Tier - Are either new affiliates or affiliates which generate low or negative return
Medium Tier - Are affiliates who generate average returns but have good growth prospects
High Tier – Are large affiliates who generate good revenues

This article builds on my previous articles and explains how different relationship management strategies should be adopted for different affiliate segments. This is explained in more detail below:

1. Basic Relationship Management:

This level of relationship management is ideal for low-tier and new affiliates since the income they bring to the business (if any) is minimal and cannot justify a high level of support. Having said this, it is essential to provide a level of support that will enable these affiliates to operate successfully and grow with the business. Below is a list of the basics that any company should offer to any affiliate (even the smallest one):

Promotions:- Allocate a specific monthly budget for particular affiliate segments, and initiate affiliate competitions. Such competitions should reward those affiliates (by means of a specific price or high commission percentage) who refer the most active customers or generate the highest net revenue in a specific period. Such promotions would act as incentives for these affiliates to perform better and will enable the affiliate manager to identify those affiliates who have growth potential.

Content:- Given the importance of content for affiliates, the provision of such content as newsletters and press releases, on a regular basis, will help small affiliates to create better websites and attract more customers with the potential of generating more sales.

Media:- You should make sure that you provide up-to-date media, such as banners, textlinks, landing pages, feeds, etc, that enable affiliates to effectively promote your products. It is also essential to have a good affiliate management system that enables the proper tracking of media.

Account Manager:- You should either appoint a member of the affiliate team who specifically deals with this affiliate segment  or otherwise create a shared email and instant messenger account that is shared and taken care of by Account Managers on a rota basis.

The above should ensure at least the minimum standard of support and communication that affiliates require as partners of the company. Such basic relationship management should also limit the amount of negative forum posts that small affiliates usually post because of lack of support from operators.

2. Enhanced Relationship Management:

As affiliates start generating a good return for the business, they should be moved from low tier to medium tier affiliates. Given the potential that these affiliates show in becoming either “Cash Cows” or developing into high tier affiliates, you should make sure to provide them with enhanced support. Below is a list of enhanced services that companies should offer to their medium tier affiliates.

Promotions:- Start by segmenting this affiliate group into two sub-groups; those that are considered “Cash Cows” (generate a constant level of net revenue with little room for growth) and those that have potential to grow and become high tier affiliates. In the latter case it makes sense to set achievable growth targets for them that if achieved will entitle them to a higher commission rate or a specific cash price. This will also enable you to continually identify affiliates with best potential.

As part of the support for medium tier affiliates, consider organizing social events such as affiliate parties and networking events where medium tier affiliates can mix with high tier one and share improvement tips.

Content and Media:- Apart from providing generic media, consider offering SEO advice from your technical staff to enable these affiliates to further optimize their websites and generate more traffic.

Account Manager:- Given the importance of this group, consider offering them a specific account manager. This will help create a stronger relationship by providing them with a single point of contact.

By providing this enhanced level of relationship management, the company would improve the satisfaction of “Cash Cow” affiliates and enable affiliates with potential to move into the high-tier segment.

3. Partner Relationship Management:

As affiliates grow further and start generating higher revenues they gain in strategic importance. These high level affiliates, which usually account to about 5% of an operator’s affiliate base, should be viewed as partners rather than merely affiliates. It is thus important to provide a customized service to these affiliates to guarantee the best relationships. Below are some examples of customized services that could be offered to these partners.

Promotions:- High tier affiliate generate large net revenues and hence justify higher promotion budgets. Customer level promotions may be offered to specific affiliates (such as monetary prices for those customers that bet/spend most on the operators site) so as to attract more customers to the site. This would increase Net Revenue for the operator and in turn, increased commission for the affiliate thus resulting in a win – win situation. 

In addition to such promotions, it is essential to organize frequent social events where you meet and entertain the bigger affiliates. This will improve the one-to-one relationship that would already exist between the affiliate and affiliate manager.

Content:- Large affiliates are in competition between themselves and fight to provide the best content to their customers. It is thus recommended that exclusive content written by industry experts be made available to these top affiliates. Apart from helping affiliates improve their SEO they would have exclusive relevant content to attract customers.

Media:- Some of the large affiliates require specialized treatment even in the type of media provided. As an operator you must consider the possibility of providing a limited number of co-branded banners and landing pages.

Account Manager:- The small number of large affiliates makes it possible for operators to appoint dedicated account managers. These should try to build and maintain a very good relationship with these partners to ensure continued satisfaction. Such individual attention will ensure a customized service to these important partners of the company.

By strategically thinking and implementing these relationship management strategies the company would ensure the allocation of resources according to the current and potential profitability of affiliates. Such strategies would ensure that good affiliates are properly taken care of and new affiliates are given the necessary support to grow while at the same time keeping in mind the efficient use of company resources.