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Creating an Affiliate Program for a client - looking for insights

by Nemecky
12 replies
I'm looking to implement and manage an affiliate program for a (web design) client in the financial services industry, but I have never done this before. I have lots of experience running campaigns as an affiliate and belong to numerous networks, but have never been on the Merchant/Advertiser side of things.

They are a credit repair / debt settlement company, and want to build a network of real estate agents, lenders, etc. that can refer them business. Once I get this up and running I want to open up the program to the public and list it on some networks, like ShareASale, CJ, etc.

For the most part I'm good with the technical aspects of this project, like integrating a WP plugin, autoresponders, etc., but I'm more curious about the financial/operations side. I'm doing all the technical research, market research, will be setting everything up and then also managing the program - so getting creatives ready, recruiting affiliates, day to day operations, etc.

What I'm most interested in is how I should structure the arrangement? i.e. the monthly retainer/management fee amount, commissions/bonus amounts, etc.

Any insights are greatly appreciated, thanks!
#affiliate #client #creating #insights #program
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  • Profile picture of the author Steve B
    Learn from the competition. Google the top five or six keyword phrases for your industry and niche. See which business competitors are at the top of the SERPs (search engine results pages). Visit their web sites, look at what they are offering, their terms, their price points, what they deliver for the money, etc. By learning all about several profitable and competitive businesses, you will begin to learn about how they operate internally.

    Good luck,

    Steve
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  • Profile picture of the author Nemecky
    Hi Steve, thanks for the reply.

    Sorry, I don't think I explained my situation correctly. I'm trying to figure out how to structure my side of the arrangement, not really the affiliate side. For instance, how much of a monthly fee and bonus/commission should I take for managing everything...e.g. $2,500 and 5% of all affiliate payouts?

    Or I've thought about creating a 3 or 4 tiered program, where essentially all affiliates (and affiliates under them) would actually be signing up under my affiliate ID? I of course would only get paid for the next 2 levels...

    Or some combination, or something different altogether, etc

    I've already been doing what you've suggested, with lots of competitor/market research already done. Which is why I'm trying to finalize the JV side of it, so I can make my final pitch to them.

    Thank you!
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  • Profile picture of the author DIABL0
    So the affiliates will be developing leads.

    So the company could pay per lead. You then take a percentage off the top and the remainder goes to the affiliate.

    You could also charge a setup fee.

    Tiered programs suck. As an affiliate, I would want the highest payout possible. Which isn't going to happen if it is tiered.
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    • Profile picture of the author Nemecky
      Correct. I will be recruiting/managing affiliates, which in this case are mortgage brokers, real estate agents, car sales/finance people, and so on. They will be submitting leads (people who need their credit fixed) to my client.

      We haven't determined that pay structure yet, but it will most likely be a flat fee when a lead signs up, i.e. $75 or something....that will be client's final decision, as I don't know their profit margins or what they're comfortable with. But they know they need to be competitive.

      One reason I was also thinking tiered is because I have several contacts/friends who manage brokerage offices, and this way I could get them signed up and then they could get all of their employees in their office to sign up under them. For instance, I found this passage on a website of a similar company...

      "We will pay out 10% of our gross profit from any referrals that you generate. We have referral partners that are making thousands of dollars in additional income per month by simply referring clients that could use our services. In addition to that, we have a sub-affiliate program that allows you to sign up your own affiliates. You will receive 10% of the revenue generated by your sub-affiliates, while they receive the 10% affiliate commissions as well."

      I will definitely be charging a setup fee lol
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  • Profile picture of the author AshleyRivera
    I am part of an affiliate program where you get paid for leads. For example, whenever a contact form is filled out the affiliate will receive $10 per leads. Maybe you could try something like that?
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  • Profile picture of the author DIABL0
    As a publisher (affiliate) for CPA network, credit repair leads are paying out around $9 +/- per lead depending on the advertiser. Debt consolidation is like $22 +/-. Obviously, the network is charging the advertiser more. But that is where pricing is at.

    I don't like anything that is a percentage of profits. No way to verify and I don't want to have to wait more than a week to be paid. Also, if the salesman sucks, that becomes my problem...which isn't cool.

    You need to be competitive with both the advertiser and affiliate for it to last.

    Anyway, just my 2 cents.
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    • Profile picture of the author Nemecky
      As an affiliate, I agree that I'd rather just be paid per lead, because of the reasons you mentioned. If I am sending leads to a roofer or some other contractor, I'm definitely doing PPL, but in this space, paying out a % of profits seems to be fairly common. I think that might be due to some niche-specific affiliate tracking/dashboard options which makes things more transparent, than let's say the roofer scenario.

      I think that also might be due to more rigid pricing in this niche. Most credit repair companies I have seen so far advertise a flat monthly rate, so you're either in or out, also making it easier to track.

      For instance, one I found (on a network) charges $49.99/mo and pays affiliates $20 per sale. Another program I found on a network charges $179/mo and pays affiliates $95 per sale, but only $1.25 per lead.

      With my research into competitors programs, I have seen quite a wide range of payment amounts. I know the client's sales team has a good closing ratio, so we just need to work out the numbers and see what works best for them, me, and the affiliates. Initially it will just be an internal program I will be running, but eventually I will get it on some networks.

      Thanks for the reply!
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  • Profile picture of the author jondiggle
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  • Profile picture of the author yukon
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    Don't they usually sell the bad debt?

    Why would they want to be an affiliate when they could simply sell out, get paid and no longer be involved?
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    • Profile picture of the author Nemecky
      Originally Posted by yukon View Post

      Don't they usually sell the bad debt?

      Why would they want to be an affiliate when they could simply sell out, get paid and no longer be involved?
      I don't follow...Are you referring to what my client does?
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  • Profile picture of the author JohnMcCabe
    Originally Posted by Nemecky View Post

    Sorry, I don't think I explained my situation correctly. I'm trying to figure out how to structure my side of the arrangement, not really the affiliate side. For instance, how much of a monthly fee and bonus/commission should I take for managing everything...e.g. $2,500 and 5% of all affiliate payouts?
    This is something to hash out with your client. Work with them to establish a monthly management fee plus override percentage that is fair to both of you. Typically, the higher the monthly fee, the lower the override.

    Originally Posted by Nemecky View Post

    Or I've thought about creating a 3 or 4 tiered program, where essentially all affiliates (and affiliates under them) would actually be signing up under my affiliate ID? I of course would only get paid for the next 2 levels...

    Or some combination, or something different altogether, etc.
    Before you pitch something like this, be aware that anything with more than 2 tiers (the original affiliate and one level below that) probably falls under the rules for running a network marketing scheme (and I use scheme without negative intent). That means extra regulation and scrutiny.

    One other thing to be very careful of when approaching mortgage brokers, realtors or anyone else that may have fiduciary responsibility is to avoid even the appearance of conflicts of interest.
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    • Profile picture of the author Nemecky
      Thanks, I appreciate the feedback...

      Originally Posted by JohnMcCabe View Post

      This is something to hash out with your client. Work with them to establish a monthly management fee plus override percentage that is fair to both of you. Typically, the higher the monthly fee, the lower the override.
      Correct, this will definitely be something we need to work out, I'm just looking for input, as I've never structured something like this before. I was hoping someone had done this before to get some real examples to reference.


      Originally Posted by JohnMcCabe View Post

      Before you pitch something like this, be aware that anything with more than 2 tiers (the original affiliate and one level below that) probably falls under the rules for running a network marketing scheme (and I use scheme without negative intent). That means extra regulation and scrutiny.

      One other thing to be very careful of when approaching mortgage brokers, realtors or anyone else that may have fiduciary responsibility is to avoid even the appearance of conflicts of interest.
      Good point, I am leaning towards anything tiered because of that perception. People that are not familiar with affiliate marketing might start thinking MLM or whatever once I explain to them there are more than one level.

      Thanks again!
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  • Profile picture of the author amuro
    You can start off with JVZoo as it is free to list your products as compared to Clickbank where you need to pay $50.

    That is why I prefer to promote Clickbank products as affiliate and JVZoo as seller as JVZoo only has internet marketing related products and only a handful of other niches at the time of posting this.

    For the operations and financial side, I will suggest you talk to your clients and ask them what they want and expect first before coming up with anything.

    Once you do, that is when you can start to get your brains and hands working.
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