Here An Affiliate, There An Affiliate, Everywhere An Affiliate, An Affiliate…

November 4, 2009

Here An Affiliate, There An Affiliate, Everywhere An Affiliate, An Affiliate…  Can you say that 10 times fast?

Every time I talk with a company about strategies to grow their business, the idea of developing an affiliate program is a major element of the discussion.  Why not?  It should be a no brainer, right?  They can make money “off of us” simply by sending customers our way.  And with Twitter and social media, this should be easy, right?  Well…maybe.

In these days of Twitter, Facebook and social networks, it’s easy to get your name out.  You’ll even get some good references and mentions, and there is clearly value in building a cadre of Twitter followers and Facebook fans.  But when it comes to driving business, these social media relationships are pretty informal, almost like flirting. Flirting is ok for branding. To develop a productive partner or affiliate program requires the development of intimate working relationships that go beyond the casual.  When you give them the attention they need, affiliate partners can truly share in a win-win relationship.

handshake 1

Everyone wants to be an affiliate, and we all want them.  It’s relatively easy to set up a program with Commission Junction or Linkshare, where sites can simply sign up to be your partner. However, once you launch a program you quickly learn the challenge.  Unless you pay careful attention, you’ll generally find that 80% of these “partners”  will end up costing you more than they return in value.  Some of them will start bidding up the price of your brand name for paid placement (despite your contract terms to the contrary).  Others may create a scam which results in a lot of purchases, followed by a lot of returns.  Others will simply be needy and require too much of your time.  But alas, there will be a few who can truly help increase your sales.

So how should you move forward?  Although it’s tempting, don’t just accept anyone to be an affiliate. Having a lot of affiliates may create links to help with SEO rankings, but they will cost you in terms of time, energy, and risk of control of your brand.  If links are your goal, you’re better off creating your own feeder sites.  Only accept affiliates whose sites make sense to you, meaning that they are a portal of products like yours, or they sell complementary products, and they can bring unique value to your sales process.

Once you identify them, it is important to stay in touch with your key affiliates. They are, in fact, another sales channel.  Thus, they need to have insights into your business, new products, and special deals.  Before the internet, annual partner/affiliate sales meetings were important. (My wife even knows this, as she’ll always remember how we had to cut our honeymoon short so I could make it back for one of these events!).  Today, you don’t need big events,  but you still need to be available and communicative.  For major (meaning they sell a lot) partnerships, face to face meetings are still important.

I also believe that to make an affiliate program work well, you need a dedicated internal affiliate sales manager.  This has to be someone who is creative and resourceful.  The manager needs to provide feedback and let your partners know how they’re doing, and hopefully how big a check they are going to get each month.  Affiliates often have unique ideas of ways to sell your product.  Your manager has to have the knowledge and judgement to be able to either go with the vision, or explain why it is not acceptable.  Ideally, you are as key to the affiliate’s income stream as they are to yours, so they need to know you are available when they need you.

At the end of the day, the success of an affiliate program has more to do with quality than quantity.  A properly managed affiliate program can drive tremendous new business opportunities your way.  A poorly managed program will just eat up your energy and time, with little or no sales results.

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Ring in the New, and Bring out the Old

October 30, 2009

 

Years ago, before the dawn of the Internet, I was the regional manager of a consumer electronics company.  I sold products to merchants throughout the Northeastern US.  I sold to some interesting companies, many of whom were as creative at buying than they were at merchandising.  Some of these people are now in jail (Crazy Eddie), many were left behind and went out of business (Lechmere, Caldor, Ames), and some learned to embrace the changing environment and thrive (Staples, CVS).  I have to say, one of my favorite retailers of the time was Spag’s.

Spag's Store

Spag's Store

Spag’s was a one store wonder, the original “mass merchant” which sold everything you needed, with no frills, at a great price.  It was founded by, of course, Spag, Anthony Borgatti, who opened the store in 1934.  Spag was the ultimate merchant of his day.  (Does anyone know if there was even a “Mr. Caldor”?) He believed in a simple principle: give the best value to your customers, build trust with your employees, and treat your vendors fairly. 

Spag’s was know as “no bags Spags”, offering boxes to customers to carry out their merchandise to save overhead.  They didn’t take credit cards, there were no frills in their displays, and they remained closed on Sundays so employees could be with their families.  Spag’s was an integral part of the Shrewsbury/Worcester Mass community.  As a customer, you always knew that you would get the best price at Spag’s. More interestingly though Spag always got the best prices from his vendors, without any wild buying tricks, Why?  Because as a vendor, you were as much a part of his community as his customers.  Spag always paid vendors on time, asked for minimal “market development funds”, and made selling to them enjoyable.  Generally, as a vendor, you sold product to the the salesman on the floor of the store, as there were no formal buying efforts, no games, just fair deals. And if you had a chance to interact with Spag himself, it made everything you gave them worthwhile. I have a vivid memory of Spag walking into a meeting that I was having with my buyer one afternoon and starting to tell stories about his store and his life.  Next thing I knew, it was 7pm on Friday night, and I was learning so much from his experience that I still didn’t want to leave.

Spag made a fortune in his store, much of which he gave back to his community through various foundations and grants. One would also often hear stories about how a family in need would see Spag himself drive up to their house in his old station wagon, leaving a crate of food and household goods at their doorstep, as anonymously as he could.  He took care of his customers, community, and vendors. He was truly an amazing man.

Spag was successful because he embraced his community, developed a great reputation, gave great value, treated his employees and vendors well, all the time running a profitable business.  His store was part of him, and he was a part of the community.  This is the attitude that we need to be truly successful in business.  With social media tools, we now have the ability to interact with our larger community just as Spag did with the Worcester community.  It’s up to us to use these tools correctly

Spag's Website

Spag's Website, 1997

Spag himself passed away in 1996, before he had a chance to bring his community online.   His daughters took over the business, and made a noble attempt at continuing the business.  I even built them a website in 1997.  They weren’t ready to consider eCommerce, but they used it as a means to try and communicate their values with the community. Our strategy was to leverage the Internet to allow people outside of the local newspaper area to see what was on sale each week. They had all the good intentions, but they could not make the leap as to how to extend their value and community to the web. They lost their uniqueness:  They began having bags, taking credit cards, and opening the store on Sundays. The business was ultimately sold to Building 19 in 2004 and faded into the history books.  If only…!!!

Spag knew how to build community the old fashioned way.  Can you imagine what he could have done if he had lived to embrace the web?  All the blogging and tweeting in the world can’t replace those core values of community building, but boy can they leverage it.  In some ways you can argue that building an Internet Retail site and community is easier than building a retail store.  All you need to do is buy some key words, do some tweeting, and put optimize your site for SEO, right?  No!  If you want to survive, you need to be more than the ad or the tweet of the day.  While you need these tools to build awareness, you also need to build and embrace your community. You need to build trust, legitimacy, and unique values.  You need to make it easy and fun to shop on your site and do business with you.  You need to build a loyal following that will think of you first, turn to you for advice, and tell their friends to visit your site.  Ultimately it becomes a matter of brilliant use of all you have at your disposal.  Spag knew how to merchandise in unorthodox ways.  But he most importantly he knew how to build the confidence of his community, and keep people coming back for more.

There is so much that can be learned from the principles that made Spag’s store successful. On the Internet, everything you do is much more transparent than before.  You can learn how to use the new social media tools pretty quickly, with no instruction, and become pretty effective at it.  You can implement software to have a shopping cart in a matter of hours.  But you can’t replace the lessons that you can learn from a man with 60 years of success.  Neither the experience, or knowing how to use the tools on their own will survive in today’s ecommerce environment.  But figure out how to bring them together the old and the new… and you will most definitely succeed.


Just a Quick Comment On Minis!

October 27, 2009

After reading my blog entry, my friend Dan from ZebraTickets sent me the following YouTube video about Mini Drivers.  Although it is somewhat off-topic,  I include this for a couple of reasons:

1: It’s a great video, and a great example of using YouTube to create and reinforce a viral following ( A topic for a later blog entry)

2:  It’s actually interesting to contemplate the branding image of Minis. Even though the car has changed tremendously, to the point of having a different manufacturer, the brand image  has brilliantly evolved, not changed.   I actually had the experience of tooling around in a Mini a good part of the summer in Luxembourg in the early 1970s.  It was clearly a “cool” car back then too.


The Ecommerce Expertise Blog

October 24, 2009

Ecommerce Expertise Blog

Welcome to the Ecommerce Expertise Blog.

My professional focus is on helping companies improve their eCommerce presence and sales results.  I have expertise in the technical aspects of eCommerce implementation, site optimization to improve conversion, and the application of 20+ years of marketing experience to new social media tools and processes.  That said there are plenty of blogs and articles that talk about how to do this.  From time to time, I’ll post links to articles or write about tips to improve your site.  But I’d rather use this blog to discuss the more esoteric applications of life and business experience to improving web presence and results.  So here we go!

Steps to an Ecology of Ecommerce (with apologies to Gregory Bateson)

Throughout my career, I have been struck by the challenge how to embody proven experience to innovate into the future.   One of the most enlightening books I ever read during my teen-twenty self discovery years was Gregory Bateson’s Steps to an Ecology of the Mind.  It was there that I first internalized the concept of embracing entropy, or evolving disorder and change,  as the way of the world.  Bateson argues that probability favors disorder.  To me, success in business (and life for that matter) is the ability to find patterns to build on the growing disorder and complexity, view every change as an opportunity, and thrive on the edge of innovation.

This doesn’t mean that you can’t survive if you ignore the entropy and the exploding connections that surround you.  Here’s a simple analogy. Think about operating a car (and I am careful to use the word “operating” rather than “driving”).  At its most basic, operating a car today is the same as it was driving a  Model T Ford.  You push the gas to go, the brake to stop, and use the steering wheel to direct where you want to go.   I drive a Mini Cooper S.  The Mini is a retro design based on the original British Car first developed in 1959.  In its original incarnation, the Cooper was a British response to the Volkswagen, a basic box with minimal features, and one simple gauge in the middle of the dash to tell you how fast you are going.  Today’s Mini looks similar, and someone who drove a 1959 Cooper would have no problems acclimating to the new car.  BUT…think about what’s in this new car:

The Old and The New

The Old and The New

That one gauge in the middle now has a speedometer, gas gauge, indicators for the traction control, maintenance indicators, a thermometer, a readout of my fuel economy, and little lights to warn me that I haven’t paid attention to the gauge that tells me I’m out of gas.  It’s surrounded by buttons for the electric doors, electric windows, automatic air conditioning, 3 airbags (which we never want to use), even an “openometer” to tell me how long the convertible has been open.  So what’s the point?  I can drive without any of these features, but to fully operate the car and maximize the experience, I need to manage all of these instruments and features.  Only then can I gain full utilization of the machine.  Someone who drove a Cooper in 1959 would absolutely feel at home in the new car, with its familiar features.  But in many ways, that familiarity would blind him to the marvels of the new technology, and prevent him from recognizing the capabilities of the newer tools.  They would only realize half of the experience.

So how does this relate to eCommerce business?  As the operator of a store, all you really need are the basics that merchants have had forever:  merchandise to sell, a way to take money, and a way to deliver the goods.  Eventually, with the assistance of big brother Google, you will be found, and you will probably sell something.  But how do you truly optimize your efforts?  You need to become aware of all the instruments and tools which surround you, and how to use them.  You need to learn both the internal widgits, such as comparison features, add-ons etc., but also all of the tools that can extend your reach into the internet.  You need to grow beyond the familiar, and embrace the entropy of all the new tools that your competitors are using to be found!  But you also need to take a holistic approach, and build on your own skills.  The ultimate winner is the merchant who can leverage  the “best practices” of the new social media tools and eCommerce techniques to build on what their years of experience has taught them in their gut.  To do this successfully often requires some coaching, passionate debates on what might work, but ultimately taking calculated risks based on the expertise that you surround yourself with.  Often, you need a guide or coach to help you see what’s new around you.  Don’t be afraid of what they can show you.  Only by embracing these new capabilities, but still keeping your hand on the wheel, can you hope to explore new ways to grow your business, and become the best in your field.