Residual Commission:
Residual commissions refer to programs that provide affiliates the ability to earn an income, month after month, for referring a sale to a merchant. They are usually those that offer some type of service for which the customer is charged an ongoing subscription fee. Examples include web hosting, tele-communications, and e-commerce solutions. They offer an effective benefit to affiliates since the affiliate can earn income for an extended period, perhaps even years, from a single sale.
An example of taking this concept in a creative, new direction is how we utilized the idea of tracking referred sales, leads or clicks with her Australian real estate investment company. She encouraged her aggressive sales reps to post images of the properties that were enticing investors to buy on Pinterest boards. The boards were links in emails that were sent to potential investors. The sales people would receive “points” for each click on one of their images and were given bonuses when a sales was closed. The sales tactics were high pressure and perhaps a bit misleading which ended up in some bad press. However, her intuitive leap to use affiliate programs strategies was innovative at the time.
Below are the most common Affiliate Program tracking methods:
Tracking Method:
Tracking refers to the way that a program tracks referred sales, leads or clicks. The most common are by using a unique web address (URL) for each affiliate, or by embedding an affiliate I.D. number into the link that is processed by the merchant’s software. Some programs also use cookies for tracking.
Cookies:
Cookies are small files stored on the visitor’s computer which record information that is of interest to the merchant site. Despite concerns that some people have, cookies are in no way dangerous — and can not be used to steal names, email addresses, phone or credit card numbers. With affiliate programs, cookies have two primary functions: to keep track of what a customer purchases, and to track which affiliate was responsible for generating the sale (and is due a commission).
Be especially wary of programs that only use cookies since they have many inherent limitations: the user can turn them off, they expire after a certain date or time, and they can be deleted off the visitor’s computer. Most programs use either unique URLs or affiliate ID numbers in conjunction with cookies to track properly. Cookies can then be used to give the affiliate credit at a later time of purchase, even if the visitor returns to the merchant’s site as opposed to the affiliate’s unique URL.
Banner Networks:
A whole bunch of networks have popped up to better facilitate the pay-per-click concept. Most pay-per-click programs are part of a network where the network acts as middle- man between the actual advertisers and the affiliates which run the ads. And for this service, the network takes a percentage of the overall revenues.
Third-party Administrators:
The best way to get starting in Affiliate Marketing is to sign-up with one or more of the different Affiliate Networks. Similar to banner networks, an increasing number of companies have sprouted up to help merchants facilitate their affiliate programs. Most act as consultants and software providers to merchants, and thus allow them to cost-effectively outsource their affiliate program operations. For affiliates, the networks often offer simplified registration, standardized commission tracking and reporting, and even consolidated commission payments.
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