Be Careful with Affiliate Marketing

August 4, 2009

Affiliate Marketing can be a great way to make money for retailers online, but there are certain pitfalls and tricks that we come across and I thought I would share one that may be common to everyone else but was certainly new to my client and me.  If you need more information about affiliate marketing please look here.

Full disclosure: The client discovered this trick, I wish I could take credit for it, but it was brought to my attention.

Coupons can be a very effective marketing tool if they are used correctly.  Many affiliate sites are deal or coupon  based  and build a following through visitors looking for deals.  However many of these coupon sites are really nothing more than vulture sites who are taking money from transactions that they did not contribute to.  Here’s how it works:

Let’s say you are at Staples.com and getting ready to checkout.  On the checkout page there is a box for a coupon redemption code.  You don’t have a coupon, but you wonder if there is one out there, so you go to Google and search staples coupon (there are over  190,000 searches for variations of that search every month) and see some sites that offer a coupon.  You go to the site and it says click here for the coupon code, you click, probably see an expired coupon or maybe just a special offer, and staples.com opens up in a new tab, or it just redirects through.  At this point a cookie has been dropped on your computer and when you go back to the site, with or without a coupon, and complete your order, a pixel fires and that coupon site gets paid a percentage of your order.  They contributed nothing to the process but get a nice percentage of the sale.

The client who discovered this did because they have not offered coupons in over six months, yet his highest grossing affiliates are all coupon sites.  This client is going to remove the coupon code from his checkout cart which should alleviate the problem.  But what if he wanted to use a special coupon for email customers?  At that point he would have to consider removing coupon affiliates from his program.

It is kind of like the wild west out there in affiliate marketing, and while I would never recommend that businesses not use it, it is very important to make sure you are managing your program actively and watching out for fraud.  It is programs like this that can keep affiliate marketing out of the mainstream and not allow many small businesses who should be affiliate marketing to take advantage of it due to the time commitment needed to run a clean mutually beneficial affiliate campaign.

Brand Warfare: Book Review

August 3, 2009

At Raise Small Business Marketing we are constantly studying and learning to help our clients.  We follow many message boards, blogs, web sites, articles and books to make sure that we stay on top of current and future trends and ideas.  On our blog we will offer “reviews” of these learning tools, but not in the traditional way.  Our goal is to find the three to five things that stood out the most to us in our niche and how we might be able to use these ideas.

Brand Warfare

By David D’Alessandro with Michele Owens copyright 2001

Brand Warfare is an interesting book written by David D’Alessandro, the CEO of John Hancock.  It is subtitled 10 Rules for Building the Killer Brand.  That is the way the book is set up is through the Ten Rules and include such chapters as, It’s the Brand Stupid and Do Not Allow Scandal to Destroy a Brand.  It is about how companies can build their brand, get employees on board, plan advertising, and protect and take care of the brand.

The Three Main Things We Took from This Book

1. The word Brand is still very hard to define.  Even though the book is completely dedicated to brands and building your brand there is no simple one sentence answer to what is a brand.  The book talks about how everyone from big business to Hollywood stars talk about their “brand”.  In the end, our working definition of the brand is what consumers think of you, what you  think of yourself, and everything that goes into creating those ideas about your business including marketing, products, and services.  Business people often have n idea of what their brand is that is completely different than what their customers think and sometimes even what their employers think.
2. If You Want Great Advertising You Have to Fight For It.  This is the name of a chapter in the book hat really made sense.  Oftentimes advertising campaigns have too many people involved.  The creative team comes up with a great concept and shows it to the client who is allowed to make changes based on intuition, advice from friends or employees, or just because they don’t like it.  Trust your creative people; you hired them for a reason.  Business owners should not allow incorrect information into their ads and should make sure that main themes are included but should trust the people they are paying to bring a clear consistent message.
3. David D’Alessandro  foresaw the demise of Circuit City all the way back in 2001.  Well maybe not exactly, but in the Chapter “Make Your Distributors Slave to Your Brand” he talks about an unnamed Superstore that could easily be Circuit City.  He talks about how the stores are messy, cashiers are hard to find, and salespeople are not knowledgeable.  That was my experience every time I walked into Circuit City.  Compare that to Best Buy, which prides itself on it’s customer service and the knowledge of the salespeople.  Best Buy is in business and Circuit City was liquidated earlier this year.  Know you niche, and market to your niche.  Some things, like high level electronics, will never just be commodities even if some consumers want them to be.  Sell on value, not on price.
4. Viral Marketing is not for small businesses.  Viral marketing is all the rage.  Some very forward thinking business owners attempt to start a viral marketing campaign using social media, YouTube and word of mouth.  But this is very hard for an unestablished brand.   D’Alessandro  uses he dot com bust to illustrate this point.  All the new tech companies had these funny ad campaigns and spent millions on SuperBowl ads that had nothing to do with their business.  Many were trying to follow Apple’s iconic “hammer throw” ad.  But Apple already had a known brand.  That commercial didn’t launch them; it propelled them to the next level.  You have to do all the hard work of brand identity before you should even think about getting cute or too subtle with your advertising.  Lay the groundwork first.

I did like this book and would recommend it to anyone with interest in the idea of brand.  Most of these strategies are for businesses much larger than the ones we normally deal with.  For instance we haven’t had any clients ask us about the pros and cons of being an Olympic Sponsor or buying the naming rights to a stadium, but the concepts remain the same.  After all what we always try and do is bring big business strategies to small businesses.