Flipping the Switch
By: John Gartner
Making the decision to change affiliate networks provides an opportunity to clean house and examine your relationships.
Maybe your relationship with your network has soured. The reports are frequently late, revenue is down and your questions are not being answered in a timely fashion. You're thinking about switching to another network, but that means learning new tracking processes and establishing relationships with an unknown group of affiliates.
So, is it really worth all the potential trouble to move over to another network?
Switching networks is a disruptive business decision that temporarily reduces income and requires additional commitment of resources to restart your affiliate program. Yet merchants large and small are choosing to change networks primarily out of frustration.
Anger Management
Merchants cite a variety of customer service reasons for jumping to another network, but they share a common theme: Merchants aren't happy with the way things are and think they can get better service elsewhere.
While increasing revenue is the ultimate driver of most business decisions, the impulse to switch is usually a reaction to negative experiences. A nagging feeling of neglect from the network foments the frustration and leads a merchant to end the relationship. These feelings of frustration can be found on merchant and affiliate blogs and message boards and are aimed at each of the largest networks.
Ask a dozen people about the performance of their network and you are likely to get a range of opinions from highly positive to very negative, according to Noelle Bermingham, site manager of affiliate SavingsWatch.com. Bermingham says it is similar to the opinions rendered about mobile phone companies. While some people switch from company A to B to get better customer service, others are switching from B to A for the same exact reason.
Each network also has its strong and weak points, according to Bermingham, who worked as a consultant for Home Depot on its affiliate program before becoming a publisher.
The networks "all have their issues," says Bermingham, who has worked with many of the leading networks during her career, including Performics, LinkShare and Commission Junction.
Lee Gientke, affiliate manager of ProHealth.com, was dissatisfied with the service she was receiving and decided it was time for a change. In August she switched from Commission Junction to LinkShare. A few months after the switch, Gientke is thrilled, saying she has already eclipsed her previous high in monthly income.
She attributes her improvement to LinkShare's superior reporting capabilities, as well as a "better commitment to service," she says. She is saving money because LinkShare includes services such as emails to affiliates at no cost that previously required paying additional fees.
Seth Greenberg, who runs eHobbies .com, used a change in technology platform as an excuse to re-evaluate his entire operation and change networks. He shares the blame as to why his program with Commission Junction was underperforming. "We haven't done a great job internally with affiliate programs," he says. "We weren't taking advantage of them in a positive way." Greenberg says that oversight of the affiliates was an internal bandwidth issue.
Greenberg decided to move eHobbies from internal fulfillment and Yahoo's online store platform to Amazon.com's technology and distribution services. Reprogramming the site for a new network at the same time would eliminate the need for another round of updates later.
For Greenberg, the risk was outweighed by the opportunities of starting over. "We didn't have much to lose because we weren't taking advantage of the channel," he says.
Change Is Good
Regardless of motivation for switching networks, merchants undergo a cathartic experience in ridding themselves of a negative relationship. Similar to periodically cleaning out your wardrobe closet, it feels good because you are being proactive, closely evaluating what stays and what goes.
As part of the housecleaning process, merchants will cut the ties with underperforming affiliates and focus on what is being done right with the 10 to 20 percent that are bringing in the cash. While revenue will hopefully increase as a result of the change, you feel better for having done something, which will likely motivate you to work smarter in the future.
During the network switch, merchants also reflect on the internal processes that have been successful. In many cases, this new attitude and focus makes it difficult to determine whether it is the change in network or improvements within the merchant's operation that prompt subsequent increases in revenue. If a merchant reverts to bad management habits, then the improvement could be only temporary.
Preparing to Switch
Reducing the disruptive impact on your revenue flow of switching networks requires several weeks of preparation to bring your most effective affiliates to the new network, as well as learning the new system for reporting and communications. Although sometimes the work can be done within 30 days, a two-month period of preparation will increase the likelihood that a merchant will start earning comparable revenues from a new network.
The first two weeks of a planned switch are dedicated to contacting the top performers who bring in 90 percent of your revenue, according to Todd Crawford, vice president of sales for Commission Junction. Successfully recruiting the top affiliates, setting up their accounts and updating their links can take up to 30 days, Crawford says, after which the attention is focused on the remaining affiliates that merit moving over. Merchants may see a dip in revenue during the transition, but ordinarily that disappears quickly.
During this time Commission Junction also notifies the top 20 to 30 performing affiliates on its network that a new merchant is coming on board. These affiliates often share the news about the new merchant's arrival with their peers, creating the "network effect" of additional affiliate relationships, Crawford says. If done correctly, growing the stable of wellperforming affiliates should boost revenues above previous levels.
Before notifying your current network that you are leaving, merchants should make sure that another network relationship is cemented. Commission Junction carefully screens merchants and accepts only 50 of the 1,000 or more that apply each quarter, according to Crawford. The network looks at the merchant's existing revenue figures, and if Commission Junction isn't sure it can do better, the company will decline to accept the merchant.
"I would rather have someone unhappy that they are not with us than have them unhappy for being with us," Crawford says. He says it is important that both parties agree up front on realistic expectations for revenue growth and earnings per click. "The last thing I want is for people to join from a competitor and be unhappy and go back."
Crawford, who recently won the business of outdoor equipment maker REI and shopping site Buy.com from competitors, says larger merchants are less likely to switch networks than small and midsize merchants because the amount of work and perceived risk is greater. Continued on Page 2...
Tags:
switch, networks, frustration, bermingham, relationships, relationship, better customer service, affiliate networks, change networks, switching networks, mobile phone companies, exact reason, negative experiences, business decision, timely fashion, clean house, business decisions, anger management, noelle, neglect,
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