Learn From Proven Entrepreneurs

Have you noticed that affiliate programs don’t make it to the cover magazines like BusinessWeek or Wired? Maybe it’s because affiliate programs aren’t as cool as social networks or aren’t as fun to talk about as iPhone apps. But I got to tell you, they’re a huge growth engine online.

In this program, you’re going to learn from the man who took Zappos’s affiliate from making thousands to making millions of dollars a year. His name is Brook Schaaf, founder of Schaaf Consulting, which specializes in outsource turnkey affiliate program management.

The FULL program

Video excerpts

About Brook Schaaf

Brook Schaaf is the founder of Schaaf Consulting. He has over eight years’ experience in Internet Marketing Strategy. He was the Affiliate Program Manager for multi-million dollar programs at Zappos.com, Shoes.com, and Edmunds.com, growing one of them from $25,000 to over $1,000,000 in monthly sales in less than two years.

8 Affiliate Lessons From This Program

1) Conversion rate is the single most important metric. As Brook said, “if your competitor is converting twice as well as you, you probably can’t double your commission to keep up with that.” (Listen to the full program for how to increase it.)

2) Leads-based affiliate companies can start their affiliate programs early, but retail-based companies should be more established before they start building their programs.

3) To figure out how much you should pay your affiliates, ask an affiliate network (like CJ.com) what similar programs charge — but keep in mind that the posted payouts could be misleading. You want to know the private prices because that’s what you’ll compete with.

4) “Lead quality is of paramount importance,” says Brook. “Don’t think that just because a credit card is required that that will defeat the fraud because there are so many stolen credit cards out there.”

5) You can protect yourself from paying for bad leads by negotiating how much time you have to evaluate a lead before paying for it. Of all the networks, CJ.com seems to give merchants the most time to evaluate leads, up to 60 days.

6)  Online retailers usually get most of their traffic from Search Engine Optimization. Affiliate programs and ads in search results are often the second and third biggest sources of revenue. (Not necessarily in that order.)

7) The biggest impediment to increasing conversion rates is often a site that’s built so rigidly that it can’t adjust based on research. (Listen to the interview to hear Brook’s shocking experience with this at Shoes.com.)

8) Affiliates are under fire. From Performance Marketing Alliance: States are attempting to define their resident affiliates as having a sales presence for out-of-state merchants. Therefore, these out-of-state merchants would now be responsible for collecting sales tax from residents in that state. Many online merchants cannot afford that expense, and will need to end their affiliate programs in those states.

Also: We didn’t talk about it in the program, but Brook suggests these resources to research leads prices: affspy.com and offervault.com

Full program includes

- How Zappos.com got its affiliates and how you can find yours. (Lots of helpful discussion on this.)

- An overview of the affiliate networks you can work with.

- What’s the biggest metric for affiliate programs and how understanding it can get you more customers without spending more money.

Suggested comments

- Who else should I interview about affiliate programs?

- Where there any questions I missed asking Brook?

- Was the “8 tips” method that I used to summarize this interview helpful?

- Are you using affiliate programs? How?