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The Seven Step Action Plan
Step 1. Begin Thinking Like Your Customer:
Discover Where They Meet Online and Define Your Niche Markets
At first glance it may seem simple to assume that your customers just go to visit certain Web Sites; set these up as affiliates and the rest just happens. This narrow vision has undermined many affiliate programs.
Your customers will go to a variety of resources besides the top Web sites. While Tier One portals will generate a dramatic portion of your sales, long term customer development lies in mining the Tier Two and Tier Three Web Sites, where word of mouth advertising and list development really happens. Most of all, customers will check out the wide variety of automated email mailing lists, newsgroups, and special discussion boards that give them what they need. Web Sites are just the tip of the marketing iceberg.
The following covers your target strategy, with suggestions to gather lists of sites that you can mine for customers.
Tier One Travel Sites and Portals
Everyone wants to work with the bigger players in the industry. From search engines to the leading Web sites, it seems ideal to form relationships with these high traffic sites.
The problem with these high profile sites is the length of negotiation time and cost of customer acquisition. Sales quotas and a hybrid model of advertising costs with affiliate sales are commonplace, but come at a cost. These types of partners will generate their own repeat business, which may affect your bottom line. Select these partners carefully, and be wary of what they claim.
For example, search engines are not good places to search for many products as a customer; with the development of brand names like Travelocity and Expedia in the travel industry for example, the search engines are not where they are searching. Given the search phrases listed in your business plan, be sure that your customers would enter these specific words. The fact is, people rarely search for the specific keywords we all assume.
Many of your Tier One portal sites may not be ideal partners, bringing a high cost per transaction and limited returns. The irony of working with high traffic sites is that they will continually be able to generate repeat business for you. Your profit margin should be tailored towards this situation; in many cases, the bigger the partner, the lower the profit margin to them, because of the volume of orders generated. It all depends on your situation, but be sure that when you negotiate with a Tier One portal, that you can afford to work with them.
Tier Two: Destination Sites (5,000 visitors or more a month)
Tier Two sites are where you can mine the Internet for many of your customers. From sites hosting localized information or other related information, these sites should be generating a minimum of 5,000 unique visits a month.
Contacting Tier Two sites involves a mixture of email, telemarketing, and fax. The busier the site, the less likely they are to answer your email. The beauty of this niche is that they often respond quickly to inquiries and can be signed up right away.
The key to remember about Tier Two sites is the lack of repeat traffic as compared to Tier One sites. You will find sites with a specific customer base, which will likely generate immediate results within the first 2-3 months of affiliating, then give you diminishing returns. Once you have mined a Web Site's customers, the sales will even out into a more steady flow.
Often people visit Web Sites out of a specific information need, like someone buying a car. They would go to the information site first, then click on a link to the showroom, the Web Site to buy a car. This is an example of a very qualified lead that may generate more sales. Be sure you target qualified leads. Many of your sub-categories of products and target customers run into the same, busy, last minute approach. This is another reason why email is critical to your success; they are rushing to get where they need to go. You need to contact them frequently to develop sales.
One common focus is to generate content for your audience, but be careful. Instead of trying to create more content, which is saturated throughout the Internet, you could organize this as a guided tour of the best sites to go for information. These are your target Tier Two customers, and by rolling out your approach with your affiliate network, you could offer to just link to them, and invite them to return the link and get paid.
Take the MiningCo approach to the Internet; instead of focusing on cost intensive content, use other's research and content to augment what you do. You can invite participation at your site. For example, New Orleans is a heavily trafficked subject on the Internet. You could evaluate the best sites for New Orleans in terms of traffic and content; contact them as affiliates and list them in the travel select directory as a benefit, if you were offering travel related items.
Other suggestions for Tier Two Sites:
- Investing: A hotbed for information and Web traffic.
- Career/Student (high school, graduations, new jobs, retirements) plus people looking for career information.
- Auction Sites: The proliferation of auction sites provides an interesting opportunity. You could offer select pieces of your product through the eBays, OnSale.com, and WebAuctions to develop brand name. Given your pricing structure, an auction site could be a likely affiliate. Give the discount to their visitors instead of paying them.
- Senior Sites: One of the most ignored segments of the online world is the 55 and older demographic. These are ideal target customers and sites like SeniorNet and Third Age provide ample, easy opportunity to reach them. Best of all, these people love email!
Tier Three: Your Target Customers
Tier Three sites have less than 5,000 visitors a month; throughout the GeoCities, Tripods, and online communities, there are many small sites sharing a business opportunity or point of view. These are ideal sites to turn into customers; this is the territory where you develop your tens of thousands of affiliates and convert them into tens of thousands of customers.
Remember that you are setting up your sales force online; typically, the 80/20 rule applies. If 20 percent of your network generates most of your sales, you can either let the other 80 percent fade away, or turn that attrition rate into customers. It is quite easy; sign them up as affiliates to make money with you, and offer them the chance (via customer loyalty programs, buyer's clubs, memberships) to save money with you. More will save money, buying from you, than will generate sales.
The beauty of Tier Three sites is that you can automate most of the sign up and marketing via email. With little traffic, these sites often welcome a personalized message. This is where your customer acquisition costs can be dramatically improved. As you expand your target marketing, Tier Three sites will yield many more sign ups. Be sure you offer to convert these affiliates to customers, because no matter what they do, sales will be limited because of lack of traffic. Here are some examples of sites to target:
- Urban City Directories: The Internet is currently dominated by a few, urban areas where the Information Age is exploding. Be sure to target certain, heavily visited cities in the U.S. and Canada. For example, Austin, Texas, is one of the most heavily "wired" cities in the U.S. This is a good target for local affiliates.
- MiningCo, Tripod, and GeoCities individual sites
- Targeted Email Marketing and Market Research (newsgroups, mailing lists, ezines)
- The unfair advantage you will have over your competitors is the email list. This specific approach should be publicized and spread throughout the Internet. Building your list into hundreds of thousands of ezine subscribers should be a primary focus.
Here are several easy ways to achieve this:
1.
Promote your efforts through cooperative ventures with other ezines and mailing lists at:
2. Target influential newsgroups at http://www.dejanews.com; find out the person who either moderates or significantly contributes to discussions on newsgroups or mailing lists is an excellent way to either develop an affiliate or simply promote awareness.
3. Include professional email services in your marketing rollout; you may try to affiliate with these companies as well, or simply buy targeted runs to their email lists including:
ADNet: http://www.adnetintl.com
4. Look for Web Rings and ICQ groups to promote this to: http://www.webring.org
There are hundreds of sites on these Web Rings who would be excellent targets.
ICQ http://www.icq.com is another excellent site to target. Many sites and lists of ICQ members (over 20 million) are available to spread awareness of your affiliate programs.
Rewards Programs
You may want to approach the various reward-centered companies online and offer your products as a special bonus to their customers. Apply your affiliate percentages to their rewards system. Fewer customers will redeem their points as much as buy your products through a special price.
Examples are:
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