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This morning I received bad news from a merchant that my members (and I personally) love. The merchant was “streamlining” their program and decided to drop us. I checked our stats and saw that we had 34 sales in about 9 weeks. That’s not huge, but it is consistent. My first thought was that maybe they decided to drop incentive sites for ROI reasons. So I checked my “big dog” competitors and found that they were still there.
I know that our quality of sales is always good because we have been receiving that feedback from our merchants for 8 years. I also know that we are known for playing by all of the coupon rules and carefully monitoring for fraud. We try to promote merchants in unique ways to our loyal base and do not even get much coupon search traffic. We’ve received numerous awards over the years in all different categories from the consumer side and the industry side. But the bottom line is that we just aren’t big enough for a lot of merchants to want to work with us.
Why Do Merchants Drop Small Affiliates?
In talking to merchants, affiliate managers, and OPMs over the years, I’ve heard various reasons why merchants will not want to work with smaller affiliates. Some programs only want X number of affiliates and do not have the time or inclination to work with a bigger number. On the flip side, I hear affiliate managers saying that the more affiliates in the program the better…even if the affiliates are not sending a single sale.
Some merchants only want to work with big “brand” affiliates. So if you are an affiliate that does not have a big brand name, they do not want their brand associated with you. It’s more about image than anything else.
Sometimes it is only about the sales. The affiliate manager is looking purely at numbers. If you cannot sell at a certain level, it does not matter the quality of your sales or the reach of your audience. If you cannot stay at the level of sales that they want, they don’t have any use for you.
Benefits of Working with Smaller Affiliates
Despite all of those reasons, there are even better reasons that merchants should consider working with affiliates that don’t pull huge numbers.
First, smaller affiliates are usually cheaper to work with. They don’t usually charge any kind of placement fees and will often give preferred placement just for commission increases. What do you have to lose by offering them a higher commission for front page placement? If they don’t have enough traffic to sell anything, you are not paying them anything anyway.
Second, they are usually more agile. There isn’t much red tape in a company with only one employee. You don’t have to wait for the people in the graphics department and the newsletter department to approve things. Nothing needs signed by the VP of Advanced Placement to make a deal. You and the affiliate email back and forth a couple of times and you might get on their homepage by afternoon.
Third, the site might not have a huge reach, but it might reach people that you are not already reaching through the bigger sites. Not everyone reads the same blogs. You’d be surprised at the number of people who intentionally avoid big news sites and overly commercial sites. Affiliates of all sizes have a knack for creating audiences of loyal visitors.
Fourth, you have better control over your data when you allow a smaller affiliate into your program given their other alternatives. I work with a very big branded merchant that only pays 4% back to me, so I pay 3% back to my cash back members. I send them sales pretty much every single day. I saw that I could get 6-8% if I pulled their links through Viglink or Skimlinks instead. When I reached out to them and explained this to them, they told me to use those links then. I was floored! Here I was as an affiliate with proven sales who wanted to try to work directly with them where they would be able to track their ROI with me and they couldn’t be bothered to even discuss it. Affiliates have a lot of alternatives when it comes to sub-networks that make life REALLY easy for the affiliate. If the affiliate is willing to do the extra work to work with a merchant directly, the merchant should at least be willing to negotiate with the affiliate.
Fifth, affiliates talk. When you treat an affiliate right, word travels. Affiliates talk in private Facebook groups, public forum, and conferences. Affiliates of all sizes share stories and experiences. Working with one small affiliate may end up being what gets you great exposure to a lot of other quality affiliates. Conversely, an affiliate that has a bad experience when you drop them out of the blue is likely to share that information with other affiliates who are on the fence about working with you.
Lastly, you never know a site’s potential. Working with a big affiliate doesn’t guarantee that you will get sales, and working with a small affiliate doesn’t guarantee that you won’t get sales. Sites move up and down in rankings and visitors all the time based on Google’s whims, a lucky mention in the press, a viral blog post, etc. When you take the time to work with an affiliate and build up good will, you never know how that will boomerang to you in the future. I like to think that some of the affiliate managers who helped me out in the beginning have seen me pay them back over the years by promoting their up-and-coming programs, pushing sales that no one else would, and going the extra mile with creative promotions.
I know that not every program is a great fit for every site. Merchants have to make decisions based on ROI and the strength of their brand. And yet, I think too often they underestimate the value of a truly loyal partner as opposed to one that just has big numbers.
I’d love to hear your thoughts either as 1) a small-ish affiliate who deals with this same problem, 2) a merchant who has a different take, or even 3) a big affiliate who thinks I just eat too many sour grapes!
Anyone who overlook the “small guy” is clearly missing out.
Hey Tricia, one must calculate the rank or size of an affiliate via the traffic of his/her blog is having. No affiliate is better without the quality traffic and I think this is the major point for considering an affiliate as big or small.
I only shop online. 99% of the time it’s at a store through Sunshine Rewards. The 1% belongs to stores that don’t have an affiliate program. Every penny counts! Especially when you are trying to earn them. Therefore, if you aren’t listed as a merchant on Sunshine Rewards and you have a program I won’t be shopping at your store! Simply stated! If enough of us boycott, you just may become a SMALL merchant!
This is why it’s so important to network and build relationships! Anyone who has a relationship with you can see the value in keeping you in a program, especially if you’re driving sales! I know it’s somewhat impossible to have a relationship with every affiliate in your program, but c’mon, there’s no reason EVER to remove someone who is actively driving sales unless it’s fraud or a huge policy shift (like removing all incentive or coupon sites, etc., as you noted).
You are right Tricia. I agree with you first and second point that smaller affiliates are cheaper to work with and are also flexible to work with. Actually, those who have reached the big blogging position had also started out small. So, the one who is a small blogger now and doesn’t send much affiliate sales will grow with time and if they are rejected now, the inspiration among them will be gone. When they grow big as a blogger, they might not have the urge that time to work as affiliates.
I have been a member of Sunshine Rewards for 6 1/2 years and I have earned almost $7,000 of which $2000 is from shopping. I only do online shopping if I can get rewards thru SR. I use other rewards sites but not for shopping. When Land’s End cancelled their program with SR, I stopped shopping there. When e-bay cancelled their program with SR, I stopped shopping there. I will not shop at a store/website if they are not on Sunshine Rewards. I am even willing to forgo the use of coupons or special deals if they are not available on SR.
I am very loyal to SR because of the owner, Tricia is an amazing person (I don’t know her personally but feel like I do!). She works hard for her members, always finding new ways for us to make money and trying to add new merchants when members ask.
I don’t know if I can mention the merchant because I haven’t seen anyone post it but I will no longer shop there online and maybe even in their stores.
Little drops of water makes the sea and so anything small is an important part of making something humongous.I liked the fifth part where you talked about the affiliate talk.
I really appreciate all of the feedback from the merchant/network/OPM sides. It’s a nice affirmation that not everyone is so short-sighted in their program management!
Tricia, One of the best and most insightful posts on the “WHY” of “smaller” affiliates and the how of not treating ALL affiliates with respect and care. We’ve only had a couple of instances in over 14 years of managing programs of an advertiser telling us to remove small affiliates. Only once was this request driven by any kind of rational reasoning (though it was being driven by a new SEO company our client had hired). In ALL cases, sales dropped almost immediately. Some of the programs never recovered their prior vitality and sales volumes.
I am going to keep this post bookmarked to show to my clients and any who may consider not building a longtail long term affiliate following.
Keep up the good work!
Every “super” affiliate was a little guy once. I’m with Joe in believing that it’s healthy for a program to have a large number of small (but productive) affiliates who are sending in 1-10 sales a month. They add up when you bring in enough of them, they tend to be excited to learn and succeed and you never know who is going to break through and become a medium to large player.
Diversification of contributors is good for business.
I’ve been a small affiliate, merchant and now I’m with a network, so I’ve seen it from all perspectives. Small affiliates are vital to a program! To echo Joe, there’s always churn in every program, but losing a large affiliate is a punch in the stomach; there’s much more stability working with numerous smaller affiliates who either don’t change merchants as often or can be more easily replaced when they do. There’s also much less noise on smaller sites, so I know my merchants have a better chance to be seen than competing for space on a larger site.
Whenever I’ve had a merchant who thought that their program would improve or somehow rank higher because of eliminating smaller affiliates, I’ve always talked them out of it by pointing out the true value those affiliates bring to every program.
You are so right that affiliates DO talk! That’s why it is so important to always treat all of them right. In fact I count on that to help grow my programs, that word will spread that both the merchant and the network treat affiliates right.
So sorry that you got dropped basically for no reason. So wrong – that Merchant needs some serious education!
Clueless and short sighted managers remove small affiliates to make their numbers look tighter. Whether its incentive based for them or not. They look at ways to bump the EPC, conversion or number of active affiliates. Look boss, last month only 12% of our affiliates were driving 5 or more sales. This month, 78% of the affiliates are driving 5 or more sales. Can I have a raise?
I have been on the small affiliate side of things and now am on the big merchant side of things so I have seen this from a few different angles.
From the merchant side of things I really enjoy working with the smaller affiliates. Like you mention, they are much more agile, easier to work with, and willing to test things out more than the big affiliates. Are the sales anywhere near what the big guys can drive? Nope. But I would rather spend 30 minutes on the phone or exchange 20 emails with a small affiliate thinking through new ideas for their site, helping them see how they can integrate our products, showing them products that would resonate with their audience, etc. than spend a couple minutes sending out a coupon code? Of course. Not from a bottom line perspective but from a job enjoyment perspective.
From a business standpoint though, 100 affiliates making 10 sales a month would be much more attractive to me than 10 affiliates making 100 sales. If one of the big guys decides to violate our terms and we have to can them that is 10% of our sales down the drain. If one of the small ones needs to go away that is only 1% and we can replace that fairly easily.
Great stuff as always Tricia. And yes, you are one of the “small” affiliates we love working with.
Thanks, Joe. You make a really good point about the percentage of your business tied up in a big affiliate. I had not even thought about that! And I am sure that it happens more often than merchants would like.