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20% of Your Affiliates Will Produce 80% of Your Revenues

According to Shawn Collin’s AffStat Affiliate Marketing Benchmark Report, Affiliate Programs are starting to fade, and the number of large affiliate programs is also declining.

Here are some of the number’s:

• 9 percent of retailers now have 10,000 or more affiliates. This is a significant drop from the 15 percent last year.
• 37 percent of retailers now have 500 or fewer affiliates up from last year’s 24 percent

Affiliate Programs Are Concentrating on the 20%

But is this a mistake? After all, isn’t one of the purposes of an affiliate program to proliferate your brand across the Internet in a cost effective manner? One of the best parts of an affiliate program (and Internet Retailing in general) is the “long tail” effect of having the ability to have an “unlimited” amount of sites promoting your products. As long as it is not costing you anything, why would you want to make your program smaller?

Why You Should Concentrate on Both the 80 and the 20

Is it easier for 10,000 affiliates to generate one sale per month, or to have 500 affiliates generate 20 sales per month. Theoretically it is easier to have 10,000 affiliates generate one sale each, but getting all of those affiliates to produce consistently is often challenging. It is challenging in the same way that giving 500 affiliates all of unique tools and resources they need to generate 20 sales a month.

No matter what the current size of your affiliate program, you need to pay equal attention to growing your 20% and your 80%. Give your top 20% affiliates unique tools, resources, contests, bonuses, and a dedicated account manager. The cream of the crop wants to know they are the cream of the crop. Treat them like you would your best sales associates, because they are (in an online sense.) Consistently grow your 80% - your affiliate program should be in a consistent state of affiliate growth.

Promote, promote, promote.

Keep your affiliate acquisition costs low by starting an affiliate program blog, where you can attract new affiliates through affiliate tips, news, and information. Find some excellent affiliate directories and get your program included. Even if an affiliate only generates one sale a year, that sale is valuable…How much more will that customer buy from you in the future?

Affiliate Programs Are Not Going Anywhere

They represent one of the (if not the) lowest costs per customer acquisition across all marketing channels. The affiliate marketing game is always changing, and therefore affiliate managers need to stay up-to-date with the latest technologies and trends.

I would highly suggest any affiliate program or affiliate program manager pick of a copy of the 2007 AffStat Affiliate Marketing Benchmark Report. For only $129, you get an in-depth look at the state of industry. There is no doubt this report will pay for itself 10 fold.