When does it make sense to use an automated Affiliate Sales Platform?

I am working with a client on the launch of their company. Yeah!

They would like to use ClickBank as a platform for selling membership in their online resource center. We would be supporting this sale through a variety of marketing and advertising. In addition the client is hoping that they will pick up affiliates through the ClickBank platform to promote their product.

After a review of the type of product/service that are sold through ClickBank there seems to be lots of market synergy with my clients' market segment. As a total cost of goods it is expensive as a credit card processor, but with the added value of affiliate tracking, and posting into an established vendor network it seems attractive.

I am see that there are many other options:

• ShareaSale,
• LinkShare
• Affiliate Scout
• Plimus
• Google Affiliate Network
• Click2sell
• RevenueWire
• Commission Junction

Who has experience with these for a start-up company? How effective are they? What options should be considered? What variables should be reviewed?

(As an added benefit if anyone has used one of these platforms with Joomla -- that would be critical for me to know as well.)

How effective are they? It completely depends on your product, the market-to-publisher match, and most importantly your hard work to make them effective. They can be very effective (see: Amazon), but most people underestimate the work to make them effective.

What should you consider? The costs, and the required level of commitment. Affiliate programs are expensive both in terms of the fees you pay, and the maintenance needed by a human. Without that active, engaged human component however, they will not work.

This is because the vast majority of affiliates (publishers) are not going to do anything for you. The secret to successful affiliate marketing is to find, and cultivate the right publishers. The affiliate platform is simply a tool to help you exchange with them, but affiliate programs are not "set it, and forget it." Finding and cultivating these affiliates is work, and involves research, marketing to the affiliates, working out special deals with them, and making them money by having an offering that converts well.

When done well, it can be very effective, but if I were to give any advice, it's to make sure you don't underestimate the costs and challenges of doing it effectively.

So to answer you initial question: it makes sense to do it when you've got something that can very effectively be promoted online (i.e. you've already figured out how to convert traffic very, very well - without this, the good publishers won't be interested), when there's a strong group of potential publishers who match your market, and when you can afford to do it given the above.

I think in any online transaction scenario there are four main points you should consider before moving forward, or deciding upon an vendor.

1. Know the Fees: In addition to credit
   card processing, there are many fees
   that can be tagged on for services
   the vendor may provide. Storage,
   reporting, accounting, even a per
   use fee for confirmation emails sent
   to your client/affiliate. Basically,
   every option you choose (and some
   you don't) may have an associated
   fee. These fees can add up to over
   40% of cost of sale!
2. Location, Location, Location: Just
   as you
   wouldn't open a Men's Warehouse on
   Venice Beach you need to scout out
   potential sales platforms locations
   or malls. Each vendor has a unique
   suite of pre-formatted forms and
   pages that will present a certain
   image to your affiliate. Look
   through these and make sure you can
   select one that fits the theme of
   your site. Is it all business? Then
   you wouldn't like a "fun" set of
   forms with "comic Sans" fonts and
   vivid colors. This is the FINAL LOOK
   your affiliate will have of "your"
   website so be as picky as you were
   when it was designed!
3. What relationship do you want to
   have with your affiliates? : Do you
   want click and go, or do you want
   to build a relationship with email
   exchange and links to social media
   etc? Many platforms are focused on
   the transaction much more than the
   relationship, so go in knowing the
   relationship you want to build and
   be prepared to pay extra for that
   email generation, link back, and
   marketing throughput.
4. Finally, Build a strategy of
   Success!: If this site and
   transaction is your only strategy
   for gaining these affiliates then
   YOU WILL FAIL. If you are even
   considering that then stop right
   here and save your money. You must
   have a multi-tiered approach to
   acquiring new client/affiliates.
   Drive potential business to the
   website using SEM (Sales Engine
   Marketing) AND SEO (Sales Engine
   Organic), enhance reputation through
   social media, evaluate and improve
   your sites through independent
   research. And for god's sake use a
   CRM to capture all your website
   leads and begin creating and
   utilizing the metrics that will make
   your sales more profitable and your
   business more powerful!

If all you're doing is basically a membership referral, then I would say rather than using a reseller/affiliate type program, it might be better to go with a viral route with person to person referrals. The automated systems make much more sense if you're a drop-shipping company where your business success depends on volume rather than a membership system where your existing customers will be happy to advertise for you in exchange for decreasing their costs.

I'm going to roll my own referral system for a SaaS business that I'm working on where the person who refers me business will get a discount based on what the person they referred buys. I've not worked out the exact percentage, but if the referrer refers enough business, then they could get their services for free.

Because they're earning a discount off their own services rather than actual cash that I have to pay, then the costs to me will never exceed the relatively low referral percentage. That's basically the same as a permanent coupon that anybody can take advantage of and I can plan for in structuring my fees.

To be perfectly honest I've not used any of those platforms that you linked, but I would strongly recommend that you consider the viral referral route if not as your primary marketing tool then at least as an addition to your marketing strategy.