Ages ago @JonnyScaramanga Tweeted: @BandPromotion I want to run an affiliate scheme to pay my fans a commission when their friends buy my merch. Any idea how I could do this?
Such an interesting question, I couldn’t possibly answer it in 140 characters. I conversed with Jonny and I’d love to share my additional thoughts with you.
A Brief Overview of Affiliate Marketing
Firstly, there are usually four parties that make up the affiliate marketing circle:
- The Advertiser (the merchant - the seller)
- The Network (the intermediary)
- The Publisher (the affiliate - the referrer - the reseller)
- The Consumer (the purchaser - the website visitor - Joe Public)
Looking at affiliate marketing from the Publisher’s point of view; affiliate marketing is the practice of getting rewarded by a merchant for sending visitors or customers to their website. After joining an affiliate marketing network you (the affiliate) select merchants to be affiliated with; when approved, you display their advertising banners and/or text links on your website. After your website’s visitor makes a purchase, fills out a contact form or clicks their link (clickthrough marketing) you earn a commission; typically your commission is a percentage of the sales price or fixed amount per lead/ clickthrough. It’s a simple way to earn some extra money and get paid for your performance!
In the case of @JonnyScaramanga, he wants to be the merchant and run his own in-house affiliate program. Jonny wants to pay a commission for referred business - maybe by utilising affiliate tracking software?
Affiliate Tracking and Management Software Providers
Please Note: I think I had better state, I am NOT endorsing or promoting any of these affiliate program products. You use them at your own risk! Warning: always be cautious of ‘free software’, do your homework and check them out.
If you want to run your own in-house affiliate program, you will need a real website and an affiliate tracking software package (hosted packages do also exist). Fans, friends and family will be able to join as affiliates, then login, get links, view their stats and get paid! You, as admin, will be able to perform all the administration duties:
- Cosmic Affiliate Click They say it’s lacking in detail and doesn’t have any major features but, it works and it’s free! Because this script is free it isn’t supported - which is normal, most free scripts usually have a helpful forum - somewhere!
- Best Option (@JonnyScaramanga ?maybe?) (Basic, Hosted $19 (£12) /month): Post Affiliate Pro Affiliate software to power your affiliate program - so they say… Easy to set up and manage - recruit new affiliates, give them promotional tools and track their referrals. Integrates with many third party payment processors. BTW I am NOT an affiliate of PAP - maybe I should be, but I’m not!?
Note: Professional Affiliate Tracking and Management Software costs range from approx. £200 - £1,000 (for a hosted option there’s usually an additional monthly charge from approx. £15).
Be Aware Of The Security Issue
Security (in all senses of the word) is a very important and wide-ranging subject from the consumer’s, the affiliate’s and the merchant’s point of view. It can simply be about trust as in, “would I buy from that website!” Most affiliates are small-time, they worry about getting ripped-off, they want to feel safe and they want to get paid for their hard work; but obviously there is more to security than trust! Where there is money, there is corruption and the merchant who doesn’t prepare for trouble will get into difficulties and fail. Before using affiliate tracking software or signing up to a hosted affiliate package, carry out exhaustive checks and ask questions about their fraud protection and security arrangements - one can’t be too thorough; we all worry about the security of our personal information online, don’t we?
Low-Fi Methods of Running an Affiliate Program
These ideas are not perfect, they all have flaws or loopholes, I would recommend that you only invite superfans, friends & family to begin with. Do a lot of testing and keep a close eye on progress, because what makes these ideas work is trust, for instance: a real world affiliate might come round to your house and pick up 20 T-shirts & 20 CDs on a sale or return agreement, then proceed to market them to his friends - choose the wrong, aggressive salesman and it may harm your band, not help it!
1. This first method isn’t really an affiliate scheme, it’s promoting your band through ‘affiliate style’ marketing in the real world. This should be a casual and friendly project that you can expand, develop and improve.
To start, pick ten close friends and offer them five CDs each at cost price (e.g. 5 CDs x £2 = £10). They can sell the CDs for whatever they feel is the correct price (e.g. recommended retail price: £7 each). They keep all the profit. You give them a complimentary CD and a fake tattoo - get yourself a photograph of them for your website. BTW, make sure you include all your contact information on the CD and rear inlay or cardwallet.
I also recommend that you get your music on to a website like http://www.tunecore.com/, they distribute to itunes, amazon, emusic, nokia music store and others. Fans, friends and family can join amazon’s affiliate program and promote your music from their social media. Tune Core is always looking for affiliates as well!
At this early stage it would be worthwhile creating a database of names and emails of superfans, friends and family who may be interested in helping your band. Use http://mailchimp.com/ a brilliant free email marketing program.
2. An advancement of the first method would be the “Sale or Return.” method; Sale or return is an arrangement whereby the merchant (you, the band) sends CDs to an affiliate (the reseller) who pays the band when they’ve sold the CDs. The CDs (or goods, merchandise) remain the band’s property (the band is known as the ‘title holder’) until they are paid for in full (by the reseller). The band should allow a reasonable period before unsold CDs are to be returned by the reseller and/or payment is made, say 30 days; the reseller receives an agreed discount (a commission payment) of say, 20%, depending on their performance (how many they’ve sold).
Obviously you, the merchant, will need to set up a Reseller Agreement. The terms of agreement should include: Ownership and copyright details. Recommended retail price. Commission rates. sales/payment time scale and recovery of CDs due to late returns. Loss or damage. Transit liability. Their consumer legislation responsibilities, and your liability waiver. Etc. etc.
The reseller, affiliate is able to sell your music (and merchandise?) under agreement from their online shop :)
3. I’m sure you are thinking what most people are thinking by now, affiliate marketing is, “a fan sticking up our banner add on their Facebook page and selling our music to their friends!” O.K., here is how you do it Low-Fi style:
Sign up to PayPal and get yourselves a merchant account. When you have joined, go to: My Business Setup & click: Website Payments Standard. Go to: Create A Button Now. Set up a buy now image button (your CD cover) for each affiliate (could take about 15 minutes per affiliate, no advanced programming skills required!). Send your new affiliate the code to paste on their ‘web pages’. When “Joe Public” clicks and buys your music, you get the email from PayPal, so *You *Must keep records of the who, which, where and why affiliates, are selling your music. Then you pay-out a commission (10-15%) to the referrers/ affiliates.
Big Tip: treat your affiliates like gold dust. Why not get some distinctive and individual fake tattoos made, send them (maybe as a prize) to your top affiliates and post images of them flaunting themselves and having fun on your website’s blog. Definitely blog about your top affiliates and link to their ‘web pages’, it encourages others to join and buy.
Please be aware that most of your affiliates will only sell to about 2% of their audience - no one is going to make a fortune.
The Serious Online Marketeer
I’ve been an online/ affiliate marketeer since about 1994, that’s a long time in the affiliate world. Here is some sad news if you are a band looking to join an affiliate network like Commission Junction to market your music; NO serious online marketeer is going to touch your band with a barge pole - unless they are sleeping with the lead singer! Why? Because there wont be enough reward for the effort. It is the same for you (the band), joining an affiliate network (to market your music) would be too expensive! However, serious online marketeers do look for niche products and good profit margins - what’s your product & what’s the PM? Affiliate Marketing is a numbers game and it doesn’t matter what side of the affiliate marketing equation you are on, whether it’s the merchant or the affiliate, understanding the numbers is important - BTW, they’ll check you out!
However, the benefits of running an affiliate program could be worth the effort and expense: you should increase your website’s targeted traffic by 100+%. You will widen your fan base and get the opportunity to engage with, and reward your true fans. And ultimately sell more product.