Affiliate Profit: Are You Losing Cash?


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Pricey Affiliate,

I have dangerous news for you: You are in all probability losing money and you did not listen to it! Let me explain...

When you joined affiliate programs you almost certainly thought of the subsequent factors:

- The commission
- The conversion rate

The profit formula appearance sort of a child play: Commission x Conversion Rate = Your Profit

After all there are 3 massive pitfalls here and if you don't manage them properly, your profit is at risk. Let take into account them:

- Worth: A high price means a better affiliate commission for each sale however it could result also in a lower conversion rate… If the product is simply too expensive, no one can buy. You mustn't be blinded by the promise of a very high commission. You ought to remember that the simplest price is not the one that provides you the very best commission but the one that makes the very best profit. An optimized pricing that creates satisfied customers and happy affiliates is what you must look for.

- Refund Rate: Refunds will kill your marketing efforts! What are price the sales you see in your account if customers request their cash back? A ton of sales mean nothing unless you retain the money!
This is often the whole responsibility of the merchant to stay refunds as low as possible. A web site that sells well is good. A website that also keeps refunds terribly low is much higher! There is solely one method to keep refunds terribly low: To deliver very high quality services meeting customers' expectations or going beyond what they might expect!

- Product Quality: Quality is king! Quality makes superior conversion rates! Quality enables higher prices and better commissions! Quality keeps refunds as low as potential! In an exceedingly word: Quality ought to be your compass. Do not associate your business with low quality merchandise or services. On the prime of your list, promote solely the very best. It can conjointly keep your profit on top.

How abundant cash are you losing these days?

The cash you earn and lose is significantly determined by the quality of the affiliate program you have selected as your prime pick.

The query is: How do you measure what is a lot of qualitative and what is less?

There's an objective criterion to use for answering this question and for optimizing your profit: The refund rate of your top affiliate program!

A high refund rate specific clearly that heaps of consumers don't seem to be satisfied with what they get which affiliates lose cash on their sales. On the contrary, a low refund rates indicates a high level of satisfaction among customers and safe earning for affiliates.

If you get many refunds with your top affiliate program, you must perceive that the standard of this program is not sufficient for keeping these customers happy and it doesn't do the necessary job for securing your profit… You're losing cash!

What are smart, medium and poor refund rates?

Refunds can't be totally avoided. There will continuously be customers that are not glad even for the foremost qualitative product or service. Therefore, expecting a zero refund rate on the long term isn't realistic. You should would like a refund rate as low as potential in your industry. It is important to think about that there will be significant variations from one trade to a different but as a rule you'll use the subsequent scale:

two% or less: Wonderful
three% - 5%: Smart
six% - ten%: Medium
11% - fifteen%: Poor
16% - twenty%: Very Poor
21% or higher: Run away!

With a 5% or less refund rate you'll be able to be happy. Your affiliate program is reliable and your profit is secured. With a half dozen%-ten% refund rate, you should monitor closely your merchant performance to ensure it doesn't get worst. It'd be advised to scan the market for a higher alternative if you'll find one. With an eleven%-twenty% (or higher) refund rate you should be very involved with your profit. Whatever your business is, you are bleeding and there's in all probability a better affiliate program to promote.

What is the refund rate of your high affiliate program?

There are 2 ways that to seek out the refund rate of an affiliate program:

one) Take a look at the stats equipped by your affiliate program

Do your math as following: Refunds / Sales = Refund Rate

Let say you make 1000 sales per month, you get a $23.50 commission per sale and concerning 160 customers request their money back each month. Your refund rate is one hundred sixty / a thousand = 16%. In that case it means that that you should have earned $twenty three,five hundred for your sales but you may get solely $19,740 because of the refunds. You lost here sixteen% of your profit or $3,760!

You'll ask yourself: Is it only I or all affiliates for this program get similar numbers? If you utilize Clickbank to push affiliate programs, you can get the massive picture regarding the whole community of affiliates that promote an affiliate program.

two) Using Clickbank payout stats to calculate the average refund rate of an affiliate program

In its marketplace, Clickbank publishes payout stats for affiliate programs. The $Earned/Sale factor provides us exactly what we want to calculate the common refund rate of a program.

The $Earned/Sale is the typical internet quantity earned per affiliate per referred sale. This variety is principally impacted by refunds and it reveals the real commission earned by affiliates. With this number, you'll be able to have an inner have a look at the important performance of affiliates programs.

The typical refund rate of an affiliate program is:
(Commission - $Earned)/Commission = Average Refund Rate

What's the refund rate of widespread affiliate programs at Clickbank?

For example, we have a tendency to have looked at three affiliate programs selling paid surveys databases. We tend to have found their refund rates very high! You may be stunned at discovering how much cash affiliates can lose when promoting these programs:

- SurveyScout: 16.two% refund rate!
- Survey Platinum: 20.9% refund rate!
- My Shopper Survey: 35.a pair of% refund rate!

To urge into the details, on November 29th 2005 figures were as following:

SurveyScout
Affiliate Commission: $23.50
Average $Earned/Sale: $19.69
Refund Rate: (23.50 - 19.69) / 23.fifty = 16.two%
Example: For one hundred referred sales you should earn $2,350. After all you will get only $1,969 as a result of sixteen customers out of 100 have requested their cash back!

Survey Platinum
Affiliate Commission: $23.fifty
Average $Earned/Sale: $18.58
Refund Rate: (23.fifty - 18.fifty eight) / 23.fifty = 20.9%
Example: For a hundred referred sales you ought to earn $two,350. In fact you may get solely $1,858 because twenty one customers out of one hundred have requested their money back!

My Client Survey
Affiliate Commission: $40.eighty four
Average $Earned/Sale: $26.forty three
Refund Rate: (40.eighty four - 26.forty three) / 40.84 = 35.a pair of%
Example: For a hundred referred sales you should earn $four,084. In fact you may get only $2,643 because thirty five customers out of one hundred have requested their cash back!
Remark: My Consumer Survey encompasses a poorly designed site and a high worth for buyers. We have a tendency to estimate its conversion rate to be considerably not up to different paid surveys programs. Despite its high commission, affiliates can lose the foremost money with this program.

We learn 3 lessons about these paid surveys affiliate programs:
- A ton of consumers are dissatisfied.
- Affiliates lose massive money.
- The standard of those programs is terribly questionable.

What should you are doing to stop the bleeding?

You've got no influence on the quality of the affiliate programs you promote. Your only real influence is on the standard of your recommendation!

Giving your high recommendation to a very professional affiliate program that delivers the utmost quality services to customers can keep your profit as high and as safe as possible.

In the field of paid surveys and mystery searching jobs, the foremost skilled program obtainable nowadays is MaximumPaidSurveys.com.

Most Paid Surveys may be a premium database of paid surveys and mystery shopping jobs. It delivers a superior worth to each registered users and affiliate partners because of its terribly high quality.

How to identify quality in affiliate programs?

Defining quality is a troublesome job. Normally, people cannot outline clearly what quality is but they recognize it after they see it. Therefore what ought to you take a look at in affiliate programs?

The foremost qualitative affiliate programs find the proper balance between the price they provide to customers and therefore the price they generate to affiliates:

1. Value to customers – It includes:

- Wealthy content
- Smart trying website
- State-of-the-art organization
- Friendly functionality
- Reasonable Worth for most visitors
- Detailed documentation
- Bonuses strengthening the main offer
- Timely Customer Support


2. Value to affiliates – It includes:

- High conversion rate
- High commission
- Low refund rate
- Commission paid on time
- Sensible affiliate support

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We can speak about several criteria for choosing of the affiliate program.
Before you run the affiliate program, it would be very useful to get on the other side of the fence for a while and look by the eyes of affiliates on the affiliate program. This simple method allows you to evaluate the strengths and weaknesses of your programs and to take balanced decisions objectively.

What needs to be partners? I can identify 10 major factors that the partners pay attention first of all before joining the program.

Level of commissions

It is undoubtedly, that the main motivator for the partners is earnings. Partners should feel that your program will give them the opportunity to earn good money. First, attention is usually drawn to the level of commission and if this figure is not impressive, the affiliate may lose the commercial interest then. It is not worth much to inflate the figure at a loss, but you should not be greedy, because competitors can offer a higher commission.

The commissions’ scheme

It is important not only to interest affiliate with a beautiful figure, but also offer him a commission scheme so that he is not disappointed in the program in the future. Typically, the level of commissions is dependent on the volume of sales (number of committed transactions), sometimes, dependence on the participation duration in the program may be found. Options may be different. So, you need to select the most suitable scheme of work with affiliates specifically for your business.

Conversion of visitors into buyers

Commercial site performance is determined by the conversion rate of visitors into customers (conversion rate), which primarily depends on the objective marketing indicators: quality of goods and services provided by the site, competitive prices for goods. Affiliates want their traffic to be converted into money, so they will work with companies selling high quality goods at reasonable prices. This also draws attention to the design and the level of usability-seller’s website.

The image of a map

Partners are much more willing to cooperate with a solid, commercially successful website that has a good image in the network. Such things play a role here, above all, as the respect factors ( "the site makes a lot of money, so he could help me to do it"), trust (known site will not be engaged in robbery of its affiliates), there is also some instant credibility ("it is prestigious to be an affiliate of the Amazon.Com!). Giant sites Ebay and Amazon have hundreds of thousands of active affiliates mainly due to its well-known brand.

The integration possibility

We may say that recently the entry into a affiliate program has involved placement of text or graphic links on your site, but the possibility of cooperation are expanded now. Many sites that is to say sellers want tighter integration with affiliates and show their desire to give anything to the latter ones that is all functional elements, price lists, ready-made design templates - if only the outcome was, and selling were. Accordingly, professional affiliates, understanding the opportunity to earn more, are waiting for such proposals from advertisers.

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When your profits begin a downhill slide or just seem at a stalemate, you scratch your head and ask a thousand times, "What am I doing wrong?" Well, the truth is that you may not be doing anything "wrong", but there may be some things you could do to bring about a change. The next time you're up against a brick wall, try implementing these techniques into your marketing campaign, and watch those blues disappear!

1. Change Your Advertising Focus
Hey, everyone is a prospective customer, but let's face it... not everyone is interested in what you have to offer. Why waste advertising dollars on those who don't even pay attention?

Find your niche. Identify the audience with the greatest need for what you have, and learn all you can about them. Become a specialist who knows what they need, and advertise directly to them. You're customer conversion rate will soar!

2. Be Unique.
There are plenty of copy cat marketers out there trying to mimic the success of those around them. Sometimes it works... sometimes it don't. But the fact of the matter is that the more unique you are the more attention you will get.

What isn't your competition doing? Yeah, try that! Chances are they can't or aren't willing too. That's your key to success!

3. Offer a Bonus.
Who will pass up a freebie? Add these "on the house" products to your sale to sweeten up the deal. The freebie doesn't need to be anything too big, or cost you anything. Just the idea of the bonus will increase the perceived value of the purchase in the consumers eyes. And yeah, they're all looking for the best buy for their buck!

4. Gather Follow Up Info.
Most customer don't make a purchase the very first time they walk through your door, but don't let them escape your clutches. Find out who they are, and how to contact them in the future. The longer you keep a line of contact open with them, the more trust you build up. Sooner or later they'll be back and ready to buy this time!

5. Wipe Out The Risk Factor.
The biggest reason people hesitate before making a sale, is the lack of confidence that they are making the best choice. Hey, no one wants to invest in a product that doesn't live up to its name. In fact the fear of making a bad choice is greater than the desire for the product.

You can totally eradicate the risk factor for consumers by providing an unconditional money back guarantee. When you guarantee satisfaction, they won't be so hesitant to get out their wallets and commit themselves to the purchase.

6. Be Diverse.
The buzz word in the Internet Marketing realm is Affiliateships. Affiliate marketers find products that are related to their own products, and offer it to their customer. The customer wins because he can learn more about the product he is investing in, and you win with commissions for an easy sale. After all, it's much easier to sell to a customer with his wallet out and open than to build a relationship with a brand new customer.

7. Keep Your Eyes Peeled.
Marketing is an ever changing entity. The Internet has brought tremendous change to the way we do business and advertise. It's wise to keep your eyes peeled for new advertising methods that will add to your profit margin. A word to the wise: don't go too far out on the limb. Keep 80 percent of your marketing budget working on the tried and true methods that have made you successful, but use the remaining 20 percent to test for ways to increase your advertising success.

These seven tactics can bring even the most sluggish marketing problem to life. Try one or all of them and watch your sales begin to climb once again... or even for the first time!

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