Affiliate Marketing is an industry built upon relationships. Working with each other to try and pursue mutually beneficial goals. It’s a simple concept that makes affiliate marketing great. Clients want sales; affiliates get paid for making sales. Everyone is in it together.
But it doesn’t always work like that. Part of business is trying to maximise your revenue. You pay less per sale, you make more profit. If you’re an affiliate, you get paid more per sale, you get more money. So to a certain extent there will always be an element of conflict as both parties try to maximise the profitability of the channel.
But is ‘winning’ always the best for your maximisation of the channel? Quite often as an affiliate, you may receive emails about how clients are ‘optimising’ their affiliate commission. I love the phrase optimising. Code word for decreasing. Speaking from experience, an ‘optimised’ affiliate commission is supposed to give more room for ‘strategic campaigns’. But so often the end result is affiliates being paid less with the previous default commission never being troubled. Optimising = cost cutting.
But it’s not all one sided. Often you get affiliates making unrealistic demands from clients, asking for commission well beyond their margins. Or my pet hate, the ‘tenancy terriers’, who try to upsell at every opportunity regardless of whether the client will ever see a return on investment.
Sometimes When You Win, You Really Lose
I love a good analogy and films are always a nice place to start. One film sprung to mind for this. In “White Men Can’t Jump”, Billy’s girlfriend tries to explain to him the concept of winning:
“Sometimes when you win, you really lose. And sometimes when you lose, you really win. And sometimes when you win or lose, you actually tie and sometimes when you tie, you actually win or lose. Winning or losing is all one organic globule, from which one extracts what one needs.”
Long winded … but let’s take this back to the above examples. What I often see with the ‘optimised commissions’ is a reduction in cost, but also in sales. Sure, you’ve saved yourself a few pounds paying commission, but you’ve also reduced your sales (often dramatically). You might even lose affiliates who have spent time promoting you in the past, but now see better rewards or opportunities elsewhere. After all, if somebody cut your salary by 50% at a weeks’ notice would you remain in your job?
With the affiliates who chase the unrealistic commissions or push the tenancy that will never work for the client; you will be found out. If you want to win now at the expense of your relationship with clients you will certainly lose later.
Working Together is Key
Now this isn’t to say that you can never reduce commission if you need to. Times change and so do margins. Where you might have had massive margins in the past, the economic situation might have cut into your profit. It also doesn’t mean that affiliates should ask for more if they think it can benefit all parties. What this is about is taking into account the long term effects of your actions and working to create negotiations where everyone wins. Real relationships that are long-lasting are built from respect, mutual understanding and common goals. Look to align your goals with your partners if you want to achieve a real win-win negotiation and grow long term.