Affiliate marketing appears to be a very attractive form of marketing for ecommerce businesses due to the security of only paying the affiliate a percentage commission from every guaranteed sale. This seems far less risky than spending £1000's on a marketing campaign with no guaranteed return.
However, I wasn't sure if I was missing the full picture here. Are there any negatives to using affiliate marketing services? Or any other information I am missing before proceeding with this marketing technique.
To people who have history using affiliate marketing services please advise as I am sure I'm not the only one wondering this?
Thanks in advance,
I'm researching affilliate programmes myself. Only paying out on a guaranteed sale removes a lot of risk (such as sites with fake traffic showing your ad or generating clicks). The main one I've found from research that remains is fraud.
E.g. affiliate generates sale, you pay affiliate, sale gets cancelled as fraudulent, you can't get your money back from affiliate.
Having fraud checks, or a longer payout cycle should help.
Tom, you will get a lot of benefits when implementing a referral program for your customers. It's a fact that referred customers have higher retention rate and their value is 16% higher than regular customers. So you're getting customers that will stick with your business.
Steven, you are right fraud is a big concern but it's also manageable. The easiest way to get rid of fraud is to put a hold on the redemptions requests, some companies do 3 month and some less. It really depends on your business and how you want to do it. We recommend 3 months as you won't get chargebacks after 3 months.
GeniusReferrals is very inexpensive, you get 20 advocates for free and you pay as you grow. 1000 advocates are just $45/month.
Also, you will get a full set of features to set up, manage and monitor your affiliate program and a fanatical support team.
Check it out, you won't regret it.