Two-Tier Affiliate programs are best
When you join an affiliate program or start an affiliate program of your own, you have to decide whether it will be a single tier or two-tier program.
With a single tier program you earn a
commission on any sales you make and that is it. If you are running your own affiliate program, you pay your affiliates a commission for any sales they refer and that is all.
However, with a two-tier program, affiliates are allowed to recruit sub-affiliates and are paid a small percentage of the sales these
sub-affiliates generate. For example, the affiliates may earn a 30% commission for selling product X himself; and when one of the sub-affiliates makes a sale, the affiliate may get a 10% commission as well.
This is very profitable for the affiliate as he can recruit an army of sub-affiliates, all earning commissions for him without any effort on his part except for the initial recruiting process.
If you are starting an affiliate program of your own should it be two-tier or single tier?
Some might shy away from the seeming
expense of a two-tier program. But is it really that expensive? Many affiliate
program managers make the wrong decision
on this.
Lets look at an example.
You have an affiliate program up and running and an average affiliate joins your program. Mr.Average has a web site that receives average traffic. He also has an ezine with thousands of subscribers published monthly.
Mr. Average posts your affiliate links to his web site and promotes your product to his ezine list.
Initially, he generates good sales. However,a point comes when he saturates his market with your product and his sales begin to drop. He begins to lose interest in your program and your sales remain small.
What happens if you set up a two-tier program? Rather than trying to keep your commission pay outs small, you motivate your existing affiliates to recruit other people to your program. This will exponentially increase
your affiliate sales. Would it not be worth paying the referring affiliate a percentage of their sub-affiliates sales?
Now when Mr.Average joins your affiliate
program this is what would happen. When
he has saturated his market with your product,he would now promote your affiliate program to his customers and ezine subscribers.
Many of Mr.Averages customers and
subscribers decide to join the affiliate program. This in turn will motivate Mr.Average to continue promoting your products and
recruiting affiliates.
Now what is the situation?
*Your income increases because of increased sales.
*You have a much larger customer base to which you can sell backend products.
*An increase in your income because of the life time loyalty of the customers referred by your affiliate.
*An army of sub-affiliates who will sell your products, and in turn promote your affiliate program to their customers and subscribers.
The little extra in affiliate sales commission pay outs will be more than compensated for by the exponential sales increase.
This is why the two-tier affiliate program is a guaranteed winner and should be the automatic choice for potential affiliates and affiliate program managers.
John Lynch 2002
[ John Lynch is an affiliate of the Internet Marketing
Center]
John Lynch is an affiliate of the Internet Marketing Center
“Focus for Affiliate Success”David McKenzie
Affiliate marketing question – Should you join every affiliate program you can find or just a few?
There are many thousands of affiliate programs on the net that you can join. Every man and his dog is running one. But how do you decide which ones to join?
There are two trains of thought in this area. First you can take the scatter gun approach, which is quite popular on the net, and join as many programs as possible. This ensures that at least SOME of them will pay off. Well, thats the theory.
The other alternative is to take the shot gun approach. Join some leading affiliate programs in just a few areas and put more effort into each one. Do some affiliate marketing research
by reading as many articles on the subject as possible. This way you can narrow down your candidates.
Well, as always there are pros and cons to both but why not do what everyone else is not doing. It seems to me most sites are taking the scatter gun approach. For example: We have 3,000
affiliate programs listed on our site. We have the largest selection of affiliate programs!
Why not focus? Find your own niche. Find a particular area that you are interested in.
Example: Perhaps your interest is in selling rare papyrus from Egypt and you find there is only one affiliate program dedicated to this. You join. You focus your affiliate marketing
strategies on this product. You are not thinking about selling papyrus from Egypt one minute and then long distance phone calls the next. With fewer products and services you are able
to focus more energy and effort onto the products and services that you have a genuine interest in. You may even be considered an expert in this particular area because of your knowledge.
There are many webmasters doing just fine with their hundreds or even thousands of affiliate programs, but the market for the scatter gun approach now appears to be cluttered.
This is where the specialists enter. The new breed of webmaster that focuses on particular products or services. Alternatively your focus may be on one area, and selecting only the best-selling, highest-paying commissions for that field. Then you target your affiliates with high level affiliate marketing techniques. Now there is room for the specialist to succeed.
Target your affiliate programs.
Pick just a few.
Concentrate all of your time into marketing these programs – because you are so passionate about the product or service you are selling, you will drive more targeted traffic to your affiliate program.
Resource Box
David McKenzie is the author of a new e-book titled The Facts You Should Know About Affiliate Programs
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