Categorize Your Affiliates

What are Affiliates? They're one big mass of people that have the same kind of site, same kind of visitors, the same needs and deserve the same commission - right?

Well, of course not. But - if you think about it, that's how most Affiliate Programs treat their Affiliates. They give all Affiliates the same commissions, the same linking methods, the same incentives, same, same, same! They fail to recognize that Affiliates have a variety of needs, diverse reasons for joining, visitors from all walks of life, different marketing styles and varying degrees of interest in making a sale.

The hardest part of administrating an Affiliate Program is deciding what your Affiliates need to help them make the sale. But, by carefully categorizing your Affiliates, you can easily determine what their needs are and how to accurately meet them.

Here is a six step plan designed to help you accurately categorize your Affiliate Members:

STEP ONE: Pick at least three types of Affiliates.

Take a look at your Affiliates and try to determine one outstanding characteristic that can easily be compared across the board and choose at least three types of the characteristic. Here are some examples:

Level of Sales: You may find that your Affiliates are so completely different or so alike that its hard to find something to classify them by. Try classifying them by the level of sales they've reached with you. You'll most likely find that you have a few forerunners that lead the pack with a number of sales, quite a few Affiliates that have sporadically made a sale or two and some that have yet to make a sale. Right there you have three types: High Sales, Med Sales, Low/No Sales. Just determine the levels at which each type begins and ends.

Products: If you sell a wide variety of products for specific interests/needs you may be able to classify your Affiliates by product. A pet shop owner can easily pick several types: Dog, Cat, Bird, Reptile and Fish. A financial site could classify types like Personal Finance, Small Business Finance, Corporate Finance.

Industry: If you market commodities like office supplies, health and beauty products, housewares and so on, you may find that your Affiliates come from a wide variety of industries. You can most likely classify your Affiliates according to their industry. For example, if you sell Health and Beauty products, you may find the Affiliates in the following industries: Home-based, Vitamin outlets, Fitness, Self-Help, Fashion, Women's Organizations and so on.

Profile: If you sell a product that relies on recommendations from high-profile individuals - you may consider classifying your Affiliates by their profile. Your three types could be High-Profile, world-known names, Med-Profile, industry-known names and Low-Profile, average Joes!

STEP TWO: Determine the needs of each type.

Each of your Affiliate Types will have different needs -- some of their needs will overlap, but you should find a distinct difference in many of their needs. If you find that they all have the same needs, go back to step one and re-think your Types.

Here are some basic things to look for:

Linking Methods: Different Types of Affiliates will need different linking methods. Let's use the example above where we had the Types: High Sales, Med Sales, Low/No Sales. Your Low/No Sales group may be satisfied with a banner or two to place on their site -- maybe in an extensive directory of "Online Resources". Your Med Sales Type may be interested in an article or two for added content on their site. Your High Sales Affiliates will probably pass up banners for articles, guestbooks, email ads and signature files.

Visitors: Capturing visitors is what you want. In order to do so -- you have to know what they want. Visit your Affiliates' sites to see what visitors are looking at and looking for. Ask yourself, "How does my product relate to what I am seeing?"

Commissions: Different Types of Affiliates may expect different commissions. You'll have some Affiliates that have joined your program "on the side" and others that plan on earning a substantial income from the program. Determine what effort they are putting into advertising, how much other programs in your industry are paying, the amount of time they devote to your program and so on.

Affiliate Support: When dealing with a large number of Affiliates, you're going to run into some support issues. "How do I place a banner", "When are commissions paid", "Can you write me a different article" and so on. Take a look at your Affiliate Types, determine which Types will need the most support.

STEP THREE: Create and compile Linking Methods for each type.

Based on the needs you identified in Step Two, create and compile linking methods for each type. Here are a few linking methods to think about:

Banners: Though they aren't as effective as other linking methods, banners are still widely used and expected. Make banners in a variety of sizes to fit tops of pages, bottoms, toolbars, sidebars and other miscellaneous areas.

Articles: These are great for Affiliates that need content for their websites and newsletters. Be sure that your Articles are Articles and not ads!

Email Ads: Your active Affiliates may be interested in placing ads in e-zines or their own newsletters. Try writing a few ads in different lengths.

Signature Files: Dedicated Affiliates may even add your tag to their signature line. Give them a few witty lines to choose from.

Guestbooks: Let your Affiliates help you build your Opt-In email lists with guestbooks. Offer them a commission for each email address they send you, or each resulting sale from the subscribers they send you.

Product Images: Give your Affiliates images that show and link directly to specific products. They'll be able to choose an image specific to their site, or choose several images to display.

Review each Affiliate Type and match them up with your new linking methods. You may have some linking methods that overlap Types -- this is okay. Just be sure you are concentrating on the Affiliates' needs!

STEP FOUR: Decide on compensation for each type.

Your ideal: 0% commissions
Your Affiliate's ideal: 99.9% commissions

Since neither you or your Affiliates live in a perfect world, it's up to you to decide on a fair commission level. Your first decision will be to determine whether you want to pay a flat rate or percentage of each sale.

Percentages: A percentage pay scale is easy for your Affiliates to digest -- the bigger the price tag, the more they make. This type of commission structure can work well for you if the same holds true for your company -- after the Cost of Goods Sold, the bigger the price tag, the more you make.

Flat Rate: A flat rate commission will work well for you if your profit after Cost of Goods Sold is roughly the same across the board. In other words, if you aren't making considerable more by selling higher priced items - neither should your Affiliates.

Based on the needs you identified above for each of the Affiliate Types, decide on a commission amount for each Type. If you have a two-tier program, consider the possibility of different second tier rates as well.

STEP FIVE: Develop a plan for effective yet painless management.

This could be one of the most difficult parts of your categorization process. You have your Affiliate Types, the linking methods for each and a fair compensation plan for each. Now, how do you manage it all?

Most software programs aren't set up to handle Affiliate Categorization. So, you may have to develop a database or a spreadsheet to keep track of your Affiliates and their Types.

There is one Affiliate Program Solution on the market that handles Affiliate Categorization called MY Affiliate Program.

My Affiliate Program Software will allow you to manage an unlimited amount of Affiliate Categories. The software makes customizing commissions, click-through pages and linking methods fast and easy. You simply set up an Affiliate Type, name it and choose its characteristics like commission rate, linking methods and so on. Then, as new Affiliates sign up, tell the software which Type you'd like them included in -- that's it. The software handles the rest.

STEP SIX: Develop Promotions for your Affiliate Types.

Once you have your Affiliates properly categorized and your system under control, consider developing promotions for your Affiliate Types. Give them special incentives to sell more during a certain time frame, move seasonal products, or increase business during your slow months. Offer them additional commissions, or even bonuses for reaching a specific amount of sales.

Whether your Affiliate Categorization strategy is complex or simple -- just keep in mind that your Affiliates are not clones of one another. They have different vistors, different backgrounds and different needs.