What works for affiliate managers and what doesn’t?  How can you work more creatively with super affiliates to tap into their true selling power?  I convened around 10 advertisers and 2 respected affiliates to find out.  What we learned may surprise you.

As part of an effort to deliver quality professional education materials to online advertising professionals, I’m releasing (below) a free, partial transcript of the audio program, “Best Practices in Affiliate Marketing: What Affiliates Want”.  A full transcript and audio CD copies of the program are available at the Molanderassoc.com Web site.

The entire program may be streamed or downloaded below.

Best Practices in Affiliate Marketing: “What Affiliates Want” (Part ONE)
Moderated by: Jeff Molander

Twelve small, medium and large brands discuss the ins-and-outs of affiliate marketing in 2006.  Discussants range widely from marketers in financial services to commodity marketers, lifestyle fashion brands, housewares and sporting goods marketers.  Two “super affiliates” join in to discuss how marketers should be working with affiliates to drive increased sales and leads. 

The program’s participants include:
A major beauty and a major lifestyles clothing brand.
Figleaves.com
Batteries.com
Lamps Plus
Golfsmith International
Factory Card & Party Outlet
VF Imagewear, Inc.
Batteries.com
Team Express, Inc.
Kitchen Collection
Rugman.com
iGive.com
Vesdia Corporation (BabyMint.com, Schoolpop.com and others)

Press PLAY button to listen now or download as MP3.

Best Practices in Affiliate Marketing: “What Affiliates Want” (Part TWO)
Moderated by: Jeff Molander

In this segment 12 small, medium and large brands (and 2 affiliates) focus on discussing how to best work with cranky affiliates who can often be un-communicative and how to work with affiliate networks that sometimes don’t go beyond handing a list of URL’s to marketers (affiliate recruitment assistance).

Press PLAY button to listen now or download as MP3.

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AUDIO TRANSCRIPT SAMPLE
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Announcer:  The following presentation is brought to you by The Partner Maker, connecting you with super affiliates and taking the work out of affiliate marketing. Learn more at ThePartnerMaker.com.

Molander:  Hello everyone, Welcome to our discussion on to collaborate more closely with Web affiliate partners. My name is Jeff Molander and I’ll be facilitating our discussion today.

Joining us on our call I’ll just run down real quick we have, of course, Vintage Tub & Baths’ Allan Dick, who is one of our industry’s greatest networkers in my opinion. Thanks, Allan, for the opportunity to commandeer your group. And I’ll do my best to keep us focused and productive.

Joining Allan is Christine Richmond from Vintage Tub as well. Julie is on the line from a major name beauty brand. Jamon Heller, I believe is on, from Factory, Card and Party Outlet Center. Jamey Maki from Golfsmith International joining us and if I mispronounce anyone’s name, I apologize ahead of time, please correct me. Bobbie Zucker Bryson, is on the line. Trish Tickle, of Kitchen Collection, joins us. Rachel, who is with a major lifestyle brand in the clothing and accessories sector. John Bankroft of VF Corporation is here. Richard of Baseball Express. Patrice Colancecco Milligan is here, a long time affiliate manager and currently in the financial services space. Kristin Collier and Dale Petruzzi of Batteries.com. I think Shane Wagg of Rugman is with us. And I’m told that we also have, yes, Heidi Chu, is also with us from Lamps Plus. Did I miss anybody first of all?

Robert Grosshandler:  I’m here.

Molander:  Oh, yes I’m coming to you next… And Robert Grosshandler also joining us. Yes. CEO of iGive and Todd Jirousek of Vesdia Corporation (Schoolpop.com, Babymint.com).

Molander:  Some of you on the call, may or may not be partnered with one, one or both of these companies that are affiliates. So for the sake of discussion, each maintains, I’ll just give you a quick update here.

Each of these gentlemen maintain shopping portals that cater to a specific kind of interest group. Rob’s company caters to philanthropic cause, cause minded type of individuals, and Todd’s company is kind of taking a major life events approach to shoppers, helping them to save money and achieve lifestyle milestones such as building a college and retirement savings.

So, without any further delay, I’ll stop talking and we’ll get some discussion going around how marketers might work in more creative ways with affiliates. That’s our subject for today and hopefully, perhaps, we’ll find out some ways in which they have not considered before working with affiliates.

Rob I’d like to come to you first if you don’t mind and then back over to Todd regarding your thoughts on, in particular, data feeds. Before we had the call, I heard from people via email that they were very interested in this aspect of distributing their products and services. Maybe you can start by telling us how I give works with marketers using data feeds and how this is somewhat unique.

Robert Grosshandler:  Well, we really love getting data feeds, both catalog data feeds and as well as offer data feeds. We view our role at making our site as simple for our consumer to use as possible, and to be that portal, to be the place where our consumer, typically women, comes to figure out where she’s going to go shopping in order to help her favorite charity.

We use the data feeds from about 300 merchants to do that; it is a newer part of our site and it’s been highly successful. We find that folks both search broadly as well as deeply. The kinds of terms we’re seeing go through our search engine, shopping comparison engine, look exactly like what you might see going through Froogle or one of the bigger brand names. We find it very valuable for our consumer, and therefore we find it very valuable for our merchants that we partner with.

Molander:  Todd, I’m not sure if your sites of all of your sites, and perhaps if you can name a few for us if they get involved in data feeds, but I know there are some creative means for marketers to work with you guys, on and off the Internet. Maybe you can speak to either or of those subjects?

Jirousek:  On the data feeds, we don’t really work now with the data feeds. But we realized that we’re going to need to.

Little history on Vesdia: We primarily run loyalty programs on behalf of clients such as Citi and we’ve been primarily dealing with in store merchants. That’s history of the company.

We recently made more of an investment on online marketing. So, we recently acquired Schoolpop and some other Websites as well. And, one of the things we are really starting to do now is redesigning the Websites to make them more user friendly and incorporate product enhancements like products level search, which we haven’t done in the past. I would say, while we don’t have that, one of the neat opportunities we have is direct mail.

Since we work with Citi, we’re able to include our merchants who we work with via the network, indirect mail pieces, credit card statements inserts, catalogs etc., that Citi sends out and that reach roughly five million people on a regular basis. So that’s kind of a neat way to reach customers. I don’t think most affiliates can offer.

Molander:  Absolutely, that’s what, I think, makes you guys fairly unique in that regard.

So having warmed up our affiliates guest with a few questions here… I can certainly ask some followups, but I’d like to hear from others, we’ll got a lot of retailers and catalogers on the line here. I’d like to see if you all have any questions that we can toss at our affiliate guests today.

Christine:  Yes, I have a question. This is Christine, from Vintage Tub & Bath.  We’ve been doing a lot of recruiting over the past month and one thing that we’ve come across, that is new for me because I’m fairly new to this position, is different publishers that actually have a setup fee or an insertion fee in order for them to become one of your publishers. I was just wondering if our two guests have any insight into what value added services are provided when a publishers actually charges?

Bryson:  I didn’t understand that.

Dick:  The question, what we’re concerned with up here at Vintage Tub, is that certain affiliates charge setup fees.

Bryson:  Oh, like a slotting fee or something?

Dick:  I’m not certain why, if we are paying in commission, why do we have to pay a setup fee as well. It almost seems as if the affiliates would want to be paid their commission in advance. I necessarily don’t have a problem with that, but if I have to pay my commission ahead of my sales. Then I think a reduced commission rate afterwards is merited. I’m just curious as to what the affiliates would have to say about that, or if they have any experience with that or what the group has to say about that.

Molander:  I know Rob, works that way at iGive. Maybe you can help answer that.

Grosshandler:  Yeah, I’ll be happy to: We actually have what we think is a rather low slotting fee compared to some of the other folks who charge slotting fees. We do it for at least three reasons.

First we have a finite amount of merchandising space and we want to make sure that our partners are serious about partnering with us. There are, I don’t know, two or three thousand retailers that we could choose to offer to our member base of a 1/4 million people and we need some way of at least, easily, filtering that out. So that’s way, we have, I think, our slotting fee is either 700 bucks or 1000 bucks, something along those lines. So for it’s a quick filter for helping separate the wheat from the chaff.

Second, we do bundle in things to our slotting fee, that we hope are attractive. We have lots of different merchandising opportunities on our site that go beyond a mere listing. And so for us, a slotting fee will include newsletter listings, more prominent placement on our site. And so forth.

Third, because we do have a scarce resource which is the attention of our consumer… we want to make sure that the folks that we partner with are serious about working with us. That it’s not simply, O.K., let’s just go get a listing at iGive and see what happens. We want to make sure they are interested in working with us, to maximize the messages that we put in front of our consumers.

Allan:  Your problem, or the problem you are trying to address, is that you get retailers that come to you that aren’t serious partners. That seems to me the theme – you want to vent out the bad retailers, or the ones that aren’t going to pay attention to it and you would rather have active merchants on your side.

Grosshandler:  Without a doubt.

Allan:  O.K..

Grosshandler:  When Jeff invited us to the phone call, we were really excited about it, because we’re in the business with our merchant partners of making sure that consumers who come to our site, get the best experience that they can possibly get. Part of that is making sure that we have the right merchant mix for them, and that we have the right kinds of offers for them, and that they’re expressed in the right kinds of terms, so that we’re not interested in partnering with every Tom, Dick and Harry retailer. It’s much of the same issue that retailers have with affiliates.

Molander:  How about Vesdia, Todd? Do you guys ask for anything in terms of a fee upfront?  I know from experience actually in working with you all in the past with some of my clients, when I used to do program management work that you do ask for a very serious commitment. I don’t know of, if there is a slotting fee involved. But I do know that you ask for usually, the commitment to a larger type of relationship. And you mentioned earlier the direct mail aspect of that.

Jirousek:  On Schoolpop we also have a slotting fee, we call it our new merchant launch package: For a new client, it’s a 15 hundred dollar, one time fee, and it includes a couple of Hot Deals weekly newsletters that go out to 150 thousand people each and banner placement on the category of your choice.

One thing we believe in is really introducing a new merchant to our membership. We can’t just put thousands of merchants up on our site with a text link because you are never going to find them, so for new merchants, we like to announce them to our membership, include them in newsletters that our members read and get you in above the fold banner placement, so that there is a greater chance of long term success for our partnership. We found that if we just bury a text link somewhere, hardly anyone is going to find it, and it’s not going to be worthwhile for either party in the long run.

Molander:  Great. Anybody else have some follow up questions to that? I believe that Jamon recently joined us. Did I hear you chiming in there, Jamon?

Heller:  Oh, I’ve been here.

Molander:  Great.

I know you have some data feed questions. I think actually I received an email from Christine, I believe, suggesting someone had a brand new affiliate program and I know you’re pretty new to the game. Is that right?

Heller:  Actually we don’t have one. We are considering one.

Molander:  O.K.

Allan:  They’re a very good thing.

(Laughter from all sides)

Molander:  I don’t know if we’ve covered that deeply enough for the folks on the call: That’s why I’m bringing up data feeds again, we touched on them briefly.

Rob’s got an affiliate also like Flamingo World. They have their own proprietary comparison search engines, that’s what they are doing with those data feeds. Does anyone else have any probing questions on data feeds?

Heller:  How prevalent is it as a part of the affiliate marketing program? And that’s related to my naive idea of an affiliate program.

Grosshandler. : I can speak to the folks who are in the loyalty and the incentive space.

We’re seeing either they have it today or we expect them to have utilize data feeds or searching comparison engine kind of practice within the year. Or they’re creating individual landing pages that better merchandise some of the products when use the catalog based data feeds for that.

The other trend that we expect to see is more and more of the special offers that we all like to see from merchants coming through an automated interface data feed if you will, but it’s offer oriented data feeds as opposed to a catalog oriented data feed.

That of course means that the bigger the data feed and the more accurate the data feed, the better we are. We’re seeing a significant portion of our member base using data feeds and then shopping from the links in the data feeds, and I know that, in our case and I suspect in most of the affiliates who are using data feeds, there is no additional charge for being in that search engine, so that we’re using the traditional affiliate’s commission to pay for that service.

Bryson:  This is Bobbie of Figleaves.  I think that Rob brought up a good point. Even a year ago, data feeds work, if you had one, it was a nice to have kind of thing. But more and more affiliates are making that a bigger part of their business model. If you are thinking about launching an affiliate program, you’re really going to have a step up on the whole game, if you include that as part of your launch.

Heller:  Well, is it still worth having an affiliate program if we can’t handle that type of thing?

Bryson:  Oh, oh, yes. I wouldn’t say that don’t have an affiliate program if you can’t have a feed; but if you can, it’s a nice to have, because more is going to become part of the norm rather than the exception, if it hasn’t already.

Colancecco:  If you don’t have a data feed, I would say if you are going to go launch without one, be prepared with an answer for every affiliate that ask you for one.

Bryson:  Exactly.

Colancecco:  Because they will.

Tickle:  This is Trish Tickle of Kitchen Collection. I’m sorry I joined late… Your resident geek should be able to build you a data feed pretty easily.

Heller:  O.K..

Trish:  They are really not that hard to build, because most of your affiliates will give you an example of how they want it built.

Heller:  O.K..

Trish:  Which will make sense to your resident geek.

Heller:  O.K..

Molander:  A lot of times — and correct me if I’m wrong everyone — the problem, the real challenge is not creating the data feed, it’s creating the data feed in a manner that is acceptable to more and more affiliates. The more folks who keep asking for it, while there really isn’t a standard out there yet.

I don’t know if all of you received an email, if not, I know I missed a few of you before the call. I will be sure to follow up with a link to an article that just came out a couple days ago regarding movement with regard to standardizing data feeds and how some retailers are moving to look into that very seriously.

Colancecco:  You might be in a unique position if you don’t have an data feed yet, with all this coming out now. You might be in a pretty unique position and be able to align yourself with standards. That’s instead of being in the position of a lot of other data feed merchants, where they might now have to change what they are doing currently to align to standards if that goes through, or must have different data feeds based on different partners needs. It may not be a bad thing to be starting out on a data feed now.

Heller:  I heard at the Shop.org conference that some providers can take the data feed, separate it out and sends it to various engines and such, on behalf of the vendor.

Molander:  Sure, Performics is in that business. A company called Mercent, Channel Advisor. There are a few companies that do that as a service.

Grosshandler:  As a consumer of data feeds, we actually don’t care so much about the format as we do how we go get it. I don’t know the economics involved, but if you use the Performics or the Linkshares of the world to help be the middleman for that, that makes it easier for us and therefore more likely we’ll use it and use it to it’s fullest extent.

Tickle:  A lot of us on this last call were Commission Junction people and we all have the option of putting up a data feed through Commission Junction. Does anybody use it?

Richmond:  We use it. At Vintage Tub, we use it.

Heller:  How hard is it to use?

Tickle:  That’s what we have our resident geek for.

(group laughter)

Bryson:  This is Bobbi at Figleaves. We were with Commission Junction, now we are with Linkshare. And you also get easily through Linkshare through their merchandiser program. And as long as you maintained a certain level as an affiliate across their entire channel, they don’t charge you.

Heller:  Would you ever need a data feed not for an affiliate program? And if so could you use the data feed through your Linkshare?

Bryson:  You can, that’s another whole topic.

Tickle:  Actually the data feed that sometimes go up to different shopping comparison engines. They like to read those a little differently than the ones we put up on our commission conjunction site.

Heller:  O.K.

Tickle:  That’s where either you have, probably the hardest thing about data feeds is being sure that it’s done on a consistent basis, and you have to pick out what that timing is, whether daily, weekly or monthly is too far apart based on your inventory.

Heller:  O.K.

Rachel: We had a data feed that was pulled for another reason, and just somewhat reformatted it so that it was useful in Commission Junction, so it can be done. And so ours was threaded for a while, for search purposes.

Colancecco:  Yeah, it usually does help if, once you pull together the information the first time, you can have your resident geek, slice it and dice it, depending on where you going to go. The first one’s the hardest, and subsequent ones are much easier.

Molander:  On the same subject of what people are doing on the merchant side, on the advertiser side, I’d like to shift a little bit and talk about what some of the… Again the whole conversation here is about how to creatively work with affiliates, either how have you creatively worked with affiliates or looking forward, how you are planning on, and what you can do and that’s why we’ve actually invited couple of the affiliates on the line to talk about what options there are.

Anybody out there on the marketer’s side that would be willing to tell a success story or maybe a horror story about something they’ve tried, creative maneuvers within an affiliate that maybe either a home run or an abysmal failure?

Dick : We’ll share one from the Vintage Tub, and this was on the bad side. Jeff, you’re intimately familiar with this one, so we had you help us iron this one out…

Last year we had a situation where the prices that were on one affiliate site for our products were at half price, or 80% off, and customers were beginning to call us saying we would like to buy that 1200 tub for 200 dollars! I told my affiliate manager, who was different person at that time, to immediately get that changed.

Well, she wrote to CJ, saying, please stop this immediately. Instead of investigating, CJ turned around and immediately cancelled the account which annoyed the affiliates. They didn’t realize they were doing anything wrong, they were just using our feed, and our feed I think was corrupt.

I never really found exactly out what happened at that time, but we didn’t have any direct contact information with her. This affiliate turned around and then blogged about us and it actually got some traction online. Not a huge amount, but it just goes to show you that if you don’t have a direct means of communication with your most important affiliates, this is the kind of stuff that can happen.

This was a mistake that just grew well out of proportion to what was really going on.

One of the things that I wanted to ask the affiliates that are on the call: We seem to have trouble getting affiliates to communicate with us. We actually have a higher commission structure for affiliates that we have direct contact information for. Now as direct result of this, we never want to repeat that mistake again. We want to be able to talk to folks and get the situation resolved without having to communicate through a third party, which is why I think the problem happened. So that was a mistake on our part. We don’t want to repeat it. And I’m curious as to what the affiliates have to say about… how can we improve our relations with our affiliates. How do we get our affiliate to give us contact information?

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