What is an Affiliate Program?

An affiliate program - is an increasingly popular form of online marketing, in which a website that refers business to your website is paid a small commission. Referrals are steered to your site via a specially coded banner or link, which appears on sites that have agreed to send business your way.

The marketing concept has captured the imagination of marketers, because it represents an unrivaled opportunity to base advertising on a pay-per-performance model. Instead of paying advertisers and "hoping for the best," merchants using affiliate marketing programs pay only when advertising results in an actual sale.

In a phrase, affiliate marketing is single-handedly redefining the way advertising is done.

As you might imagine, many merchants see this new paradigm as a license to print money, and have devoted a great deal of effort to sign-up as many affiliates as possible. Indeed, in many cases, merchants with successful affiliate marketing programs boast hundreds - if not thousands - of affiliate websites, which continually feed them potential customers on a daily basis.

Moreover, the concept has also given rise to a new brand of entrepreneur: the power affiliate. Such referral websites have become extremely adept at attracting high quality traffic representing true sales potential to their own sites, and then spiriting that traffic along to the appropriate merchants. In many cases, these power affiliates have created entire careers and businesses for themselves, simply with their ability to deliver high quality traffic on a regular basis.

Affiliate Software will handle all the program management details for you, including:
  1. Processing of new affiliate sign-ups
  2. Tracking of all traffic and sales referred to your website
  3. Calculating commission totals for every affiliate
  4. Automating the payment of commissions to all your affiliates

Plus, Affiliate Program also offers you the flexibility to pick-and-choose among a number of commission structures. You'll find that flexibility extremely valuable, since the "right" commission structure or structures for your business is a key criteria that power affiliates use in deciding whether or not to join an affiliate program.

No matter what commission structure you choose, you'll have the peace of mind knowing you can rely on Affiliate Program to correctly sort out who gets paid, and how much they get paid. And you'll know that Affiliate Program will be doing this for you flawlessly, each and every day.

The software achieves this reliability by placing a snippet of individualized code in every banner and link that is posted by an affiliate. Essentially, any time a visitor clicks on this coded banner or link - whether it's on an affiliate's website, in an e-newsletter, or included in some other form of email - Affiliate Software automatically identifies the source of the click, and attributes it to the appropriate affiliate.

Even if the referred visitor makes a purchase days or months later, Affiliate Software "remembers" click's source, and rewards the appropriate affiliate.

Obviously, you'll want to carefully evaluate the full spectrum of Affiliate Program commission structures - also known as campaigns -- before choosing the structures that will work best for your business. Here's detail on each:

Campaign Types:
Payouts (commission types) are together with the quality of your products/services and trust ability of your website and company the most significant factor evaluated by affiliates when choosing whether to join your affiliate program and promote your products. Therefore, it is important to consider which types of payouts you will be offering when developing an affiliate program.

There are basically three payment structures to consider for an affiliate program: Pay Per Click, Pay Per Lead and Pay Per Sale. Except these three there are also additional types like CPM (payment for thousand banner impressions displayed), payment Per Referral of new affiliates.

CPM (cost per thousand impressions):
This is a reward that pays affiliates a commission for every one thousand banner/ link impressions they generate. Under this structure, affiliates only have to refer traffic - they don't have to generate sales from that traffic. Some merchants offer this commission structure in combination with other types of commissions to ensure their affiliates remain enthused about their affiliate program.

Per Click:
Also known as Pay Per Click (PPC) or Cost Per Click (CPC), this is a commission affiliates receive every time a visitor clicks through to your website via a banner or link. Per Click fees are usually quite low, since the clicks by potential customers do not need to result in a sale. Depending on an affiliate's click-through-ratio (CTR), commissions generally range between Rs. 0.10 and Rs. 40.00.

An added bonus: Affiliate Program enables you to create your own, custom Pay Per Click campaigns, as well as Pay Per Click campaigns similar to those used by Google AdWords and Overture (Yahoo Marketing).

Per Sale:
Also called revenue sharing, a Per Sale commission offers affiliates a fixed percentage of a sale when a referred visitor actually makes a purchase. Such commissions, which are tracked by Affiliate Program via cookies, IP tracking, or PHP sessions, generally range between 5%-60%
.
Per Lead:
Similar to a Per Sale commission, Per Lead commissions reward affiliates for leads that feature detailed contact information from potential customers. Per Lead is often used to reward affiliates for referring new affiliate website to an affiliate program. Other uses include rewards for sign-ups for services offered at a website, and rewards for sign-ups for more information on big ticket sales.

In practice, Per Lead rewards are generally linked to forms, which pop up on an affiliate's website when a potential customer clicks on an advertisement there. Each time a completed form is sent to you, the referring affiliate site is paid a fee. This commission is usually a flat rate, although some businesses do offer a percentage of a lead's value.

Recurring Support:
Websites offering recurring subscriptions and/or services often offer a Recurring Support commission to their affiliates. For example: if your website sells a service with a recurring charge, such as a subscription for content or a monthly web hosting plan, your affiliate websites are given a recurring commission each time a customer makes a recurring payment under this scenario.

Sign-Up Bonus:
Merchants use this commission to aggressively promote the spread of their affiliate program across the Web. Under this plan, existing affiliates who are successful in signing up other websites for your affiliate program are given a small fee.

Sign-Up Referral Commission:
Some merchants looking to add as many affiliates as possible often use a tiered commission structure as a reward to existing affiliates. With this design, an existing affiliate gets a small percentage of every sale that is generated by a new affiliate that he or she signed up for your program.

Many merchants prefer the tiered system; since they are not required to pay for sign-ups of new affiliates until those newcomers actually begin generating sales.

Tiered systems can become quite complex, and some merchants offer a number of reward tiers to encourage even more new affiliate sign-ups. Under such plans, an existing (parent) affiliate gets a percentage of sales from any new affiliate (child) he or she signs up - plus a percentage of sales from any affiliates that affiliate (child's child) signs up, and so on. In rare cases, such programs feature as many as ten tiers.

Tracking:
In addition to offering a wide spectrum of commission structures, Affiliate Programm also offers merchants robust tracking capabilities. Using the software, you' ll instantly be able to see how many visitors your affiliate program is generating on a daily basis. More importantly, you'll also be able to quickly identify which of your affiliates are referring the clicks that are actually generating sales.

With such insights, you'll be able to quickly identify your top performing affiliate websites, and reward and nurture those sites accordingly.

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