This Is Not How You Work With Affiliates

For over 20 years I have made my living from affiliate and performance agreements. Supplying traffic and customers to companies, building and training affiliate teams, and whenever I run an operation or a company myself, I treat that department as one of the most important pillars of both marketing and revenue.

Two simple reasons.

With in-house marketing you spend money today and commit to the cost, on the assumption that results will follow later. With affiliates you pay afterwards, and only for what actually worked. Economically it is the most efficient channel most companies can run.

The second reason: no company, at any size, can cover every opportunity in its market. Which is why affiliates sometimes generate enormous revenue from a creative channel that only they control.

The paradox

In many cases, instead of treating the affiliate as part of the house, companies treat the partners promoting them as an adversary to be fought and squeezed. Cut into their revenue, shave them down.

That is exactly why I stopped working with companies in Israel on performance activity.

They exploited the fact that payment is post-paid. They rejected very high percentages of leads, and dragged payments out for months. In practice my company stopped being a business that earns from performance and became one that finances corporations.

What happened next was predictable. I stopped supplying them with leads. And then they started courting us, because they suddenly understood the size of the loss.

How it should work

Stop seeing the affiliate as a cost to be reduced. The opposite. This is your opportunity to find the next growth hack.

I am not saying be a pushover, or that you should flatter them. Manage affiliates aggressively at the level of analytics and statistical analysis. But be fair on payments and on commissions.

And never, ever shave an affiliate who delivers you real value. Let them earn, and earn well. The entire relationship rests on trust and on profit.

Take August as an example. In a lot of companies it is one of the weakest months of the year. From my experience, close work with strong affiliates is exactly what has turned a month that should have failed into a profitable one, or at least one you get through comfortably. Purely because I was getting the better quality traffic from partners.