Affiliate Profit: Are you losing money?
I have bad news for you: You are likely to lose money and you did not care! Let me explain …
If you joined affiliate programs you probably considered the following factors:
- The Commission
- The conversion rate
The winning formula looks like a child playing: Commission x conversion rate = your gain
In fact, there are three large dangers here and if you do not manage them correctly, your profit at risk. Have them consider:
- Price: A high price means a higher affiliate commission for each sale, but it can also reduce the conversion rate … If the product is too expensive, no one will buy. They should not be blinded by the promise of a very high commission. You should keep in mind that is not the best price, the one that gives you the highest commission, but the one that makes the highest profit. An optimized pricing, that satisfied customers and satisfied partner does is, what you should look.
- Recovery Rate: Refunds can kill your marketing efforts! What is it worth the spend, you can see in your account, if customers request their money back? Many sales mean nothing if you keep the money!
That is the whole responsibility of the dealer for reimbursement to be kept as low as possible. A site that sells well is good. A site that also holds refunds is very small much better! There is only one way to get refunds very low: To provide a high quality of services to go beyond meeting the expectations of the customer or that, what they might expect!
- Product quality: Quality is king! Quality makes it superior conversion rates! Allows higher prices and better quality commissions! Quality keeps refunds as low as possible! In a word: Quality should be your compass. Not your company with low quality products or services. Further on the top of the list, only the best. It always will your profits at the top.
How much money do you lose today?
The money that you deserve to lose and is determined primarily by the quality of the affiliate program you have selected as your top pick.
The question is: How do you measure what quality and what is more less?
It is an objective criterion for answering this question and to optimize their commercial use: the refund of your top affiliate program!
A high refund rate express clear that not many customers with what they get, and subsidiaries that lose money satisfied with their sales. On the contrary, a low reimbursement rates with a high level of satisfaction among customers and secure income for affiliates.
If you get many refunds with your top affiliate program, you should understand that the quality of the program is not sufficiently satisfactory for the retention of these customers are and it does not secure the necessary job your income … They are losing money!
What are good, average and poor reimbursement rates?
Refunds can not be completely avoided. There will always be customers who are not even satisfied with the quality product or service. So, expect a zero refund rate in the long run is not realistic. You should request a refund rate as low as possible in your industry. It is important to note that there are significant differences from sector to sector, but as a rule of thumb you can use the following scale:
2% or less: Excellent
3% – 5%: Good
6% – 10%: Central
11% – 15%: Poor
16% – 20%: very bad
21% or higher: Run away!
With a 5% or less refund rate you can be happy. Your affiliate program is reliable and your profit is assured. With a 6% -10% reimbursement rate, you should watch closely to ensure your merchant performance, does not get worst. It would be advisable to scan the market for a better alternative if you can find one. With a 11% -20% (or higher) refund rate you should be very concerned with your profit. Regardless of your industry, you are bleeding and it is likely to promote a better affiliate program.
What is the rate of your top affiliate program?
There are two possibilities, the refund rate by an affiliate program related to:
1) at the statistics provided by your affiliate program Look
Convert it as follows: Refunds / Sales = refund
Let say you make 1000 sales per month, you receive $ 23.50 per sale commission and over 160 customers request their money back each month. The refund is 160 / 1000 = 16%. In this case means that you have earned $ 23 500 for your sales, but you will get only $ 19,740 because of the refund. They lost this case 16% of income or $ 3,760!
One may ask: Is it just me or all the participants for this program have similar numbers? If you promote on Clickbank affiliate programs, you can use the large picture of the whole community of partners to promote an affiliate program.
2) Use Clickbank payment statistics to calculate the average reimbursement rate of an affiliate program
In the market place, published Clickbank payment statistics for affiliate programs. The $ Earned / Sale factor gives us exactly what we calculate the average refund rate of a program need.
The $ Earned / Sale is the average net earned per affiliate per referred sale. This figure is affected primarily by reimbursements, and it reveals the real commission of subsidiaries. This number can be an inside look at the actual performance of the partner programs.
The average reimbursement rate of an affiliate program is:
(Commission – $ Earned) / Commission = Average Refund rate
What is the rate of popular affiliate programs at Clickbank?
As an example, we looked at three affiliate programs selling paid survey databases. We have found that reimbursement rates are very high! You will discover how to lose a lot of money if affiliates can promote these programs may be surprised:
- Survey scout: 16.2% refund rate!
- Survey Platinum: 20.9% refund rate!
- My Consumer survey: 35.2% refund rate!
To get into the details, to 29 November 2005 were figures as follows:
survey scout
Affiliate Commission: $ 23.50
Average $ Earned / Sale: $ 19.69
Reimbursement: (23,50-19,69) / 23.50 = 16.2%
Example: For 100 referred sales you should earn $ 2350. In fact, you get only $ 1.969, as 16 out of 100 customers their money back offer!
Survey Platinum
Affiliate Commission: $ 23.50
Average $ Earned / Sale: $ 18.58
Reimbursement: (23,50-18,58) / 23.50 = 20.9%
Example: For 100 referred sales you should earn $ 2350. In fact, you only get $ 1,858 because 21 customers out of 100 to offer their money back!
My consumer survey
Affiliate Commission: $ 40.84
Average $ Earned / Sale: $ 26.43
Reimbursement: (40,84-26,43) / 40.84 = 35.2%
Example: For 100 referred sales you should earn $ 4084. In fact, you only get $ 2,643 because 35 customers out of 100 to offer their money back!
Note: My consumer poll has a poorly designed website and a high price for the buyer. We appreciate his conversion rate to be significantly less than other programs paid surveys. Despite the high commission affiliates will lose the most money with this program.
We learn three lessons about these paid surveys affiliate programs:
- Many customers are dissatisfied.
- Partner lose a lot of money.
- The quality of these programs is very questionable.
What you should do to stop the bleeding?
You have no influence on the quality of the affiliate programs you promote. Their only real influence on the quality of your recommendation!
By providing your top recommendation for a very professional affiliate program, the highest quality to customers as possible to keep your profits high and as safe as possible.
In the area of paid surveys and mystery shopping jobs, is the most professional program available today MaximumPaidSurveys.com.
Maximum Paid Surveys is a premium database of paid surveys and mystery shopping jobs. It provides superior value to both registered users and affiliates for its very high quality.
How to identify the quality of affiliate programs?
Definition of quality is a difficult task. In general, we can not clearly define what is quality, but they realize when they see it. So what should you look into affiliate programs?
The quality affiliate programs, the right balance between the value they offer customers and the value they generate to Affiliates:
1. Customer Value – It includes:
- Rich Content
- Good looking site
- State-of-the-art organization
- Friendly Functionality
- Affordable prices for most visitors
- Detailed documentation
- Strengthening the offer bonuses
- Timely Customer Support
2. Price for affiliates – It includes:
- High conversion rate
- High commission
- Low refund rate
- Commission paid on time
- Good affiliate support
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