20% of Your Affiliate Base Will Most Likely Account for 80% of Your Revenue

Following a pattern found in many other situations, the 80/20% rule seems to apply here as well.

To run a successful affiliate program you must establish an efficient and effective sales channel. Once your program is up and running, your next priority is simple: recruit, recruit, and recruit. After a ramp up phase you will realize that the bulk of your revenue is brought in by a small group of affiliates. At this point you should start segmenting your affiliates by revenue and content. This will help you to determine not only who is responsible for the revenue, but it will also guide you in what type of sites you should try and recruit in the future. In addition, this segmentation will also help you to put together customized communication plans.

Be Free, a leader in performance based marketing solutions, also recognized that these affiliates should be offered additional services. They recently started a so-called Super Affiliate program that supplies the top revenue producers with consolidated reporting and technical support via phone and email. This program has been well received by the participating merchants and affiliates. The merchant still owns the relationship, and is therefore responsible for keeping the affiliate motivated, educated and engaged. Relationship management with super affiliates is crucial to the success of your program. You might want to consider a tiered compensation structure, supply them with targeted creatives that complement their site content and just keep in close contact like you would with any other of your strategic partners and customers.

Building and maintaining relationships with your strategic affiliates takes time. You have a couple of options: you can either add an additional resource to your team or you can outsource it to a third party affiliate management service provider. Keeping this task in-house allows you to build up your own expertise. On the other hand, it requires additional training of your staff in the area of affiliate and relationship management. The other option is to outsource strategic recruitment as well as super affiliate relationship building. This will give you the freedom to concentrate on your core business and still be assured that this sales channel will contribute to the success of your company. In either case, keep in mind that more and more companies are adding affiliate programs to their sites. You don't want to lose your top performers to your competition just because they pay a little more attention to them than you have in the past.

We'd like to hear from you. Please feel free to contact us at comments@affiliateperformance.com.

Executive Summary

20% of the affiliate base
captures 80% of the affiliate revenue.
These "Super Affiliates" are
becoming strategic selling
partners. They deserve specialized
attention through personalized
support and a compelling,
motivating compensation