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Thoughts on offering an affiliate program

Are you considering offering an affiliate program to get customers? Here are some thoughts on making it effective:

1. Most affiliate bonuses are too small to be meaningful. Make it an amount that grabs my attention, or relate it to the cost of the service (i.e. affiliate bonus of 25% of the final contract)

2. Determining the bonus amount:

a. What is your total cost to acquire a customer (include networking, advertising, marketing, websites, everything, then divide by the number of customers signed up)

b.The affiliate bonus should then equivalent to your customer acquisition cost.
(i.e. do not run an affiliate program to decrease customer acquisition costs… at least not at first)

3. An affiliate program should primarily have as goal to save your *time* to get customers (not necessarily cutting customer acquisition costs). Getting quality referrals is also a benefit, if the system is well set-up.

4. For service providers (coaches, consultants, etc) make the offer you are promoting through affiliates very clear. Make all promotional material, etc easy. Provide the words and the scripts for me as your affiliate to approach my contacts.

5. Have a good tracking and accounting system in place so that the bonuses go to the right person.

6. Offering your services as bonus is not necessarily a good motivator. See my article on pro-bono offers here: http://is.gd/iPdA that has applicable arguments against offering your products and services for no money or as exchange.

7. Think long and hard before offering an affiliate program. It does not work well to start or revive a customer base, but it is okay as an add-on to existing marketing efforts. Your best connectors are usually not motivated by money (and may even be turned off or even insulted when you offer it to them). Sometimes love is a bigger motivator than money!

What are your thoughts?

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