This presentation is from Affiliate Summit East 2016 (July 31-August 2, 2016 in New York City, NY). Session description: Learn how to apply general negotiation tactics specifically to affiliate relationships regarding placements, commissions, and promotions so that both sides come out happy.
Negotiation Tactics for Affiliates and Affiliate Managers
1. Affiliate Summit East 2016
Negotiation Tactics for Affiliates and Affiliate
Managers
Tricia Meyer, MeyerTech, LLC, @SunshineTricia
2. Agenda
• 5 Most Important Steps to a Successful
Negotiation
• Tips for Any Negotiation
• How They Apply to Affiliate Marketing
• Bonus Download of 5 More Steps
• 12 Minute Q&A
4. Do Your Research
• Commission Rates (Current, Your
Competitors)
• Traffic Levels (Trends)
• Social Media Following and Interaction
• Newsletter Subscribers, Open/Click Rates
• Exclusives Given to Other Affiliates
• Affiliate Worth to the Merchant
• Affiliate EPC Compared to Competitors
10. Use Objective Standards
• Terms with Other Affiliates
• AffiliateBenchmark Survey Averages
• EPCs According to Network
• Profit Margins
• YOY/MOM Growth
12. Confirm in Writing
• Email with List of Expectations
• Change of Terms in Network
• Insertion Order
• Formal Contract
• Start and End Dates
13. Top 5 Negotiation Steps
• Do Your Research
• Prepare Options You Can Bundle
• Counter Offers Make Everyone Happy
• Use Objective Standards
• Confirm in Writing
One of the best CLE classes I ever took was on negotiation. What I loved about it was that I was able to learn things that I could use in my job but also in LIFE. My hope is that you will feel the same way about this session. Not only will you be able to more effectively negotiate as an affiliate or affiliate manager, but you can take these skills into negotiations with sales people, business partners, and even your spouse or kids.
Before any negotiation, you need as much information as possible. You need information from your side AND from their side when possible. If you were buying a car, you would want to know what that same car is selling for at different car lots. Calculate numbers and organize them.
Both sides are going to want this same information, but some of it is easier to get than others. Some of it you may have to extrapolate from other data that you CAN find.
Pro tip: Look what cash back sites are paying out for the merchant. Sites like CashBackHolic and CashBackMonitor will show you ranges. Top Cashback advertises that they pay 100%. For others, they are paying about half. If you are a deal or coupon site, you should be in that range. If you are a content site, you may be able to leverage for higher.
ShareASale—find out what the merchant is paying other affiliates by comparing the average sale to the average commission. You will know if you are getting paid higher or lower than everyone else.
Merchants should pay attention not only to how many followers someone has on social media but how many THEY are following and how much interaction each post gets.
Many times a simple Google search will show you blog posts and social media mentions by other top affiliates for a particular merchant. Look to see if they are getting exclusive coupons, vanity codes, etc.
Find out how much of the merchant traffic is coming from one affiliate (see my blog post on how to calculate). Merchants can easily do this to compare across affiliates.
So many options! Most of the time when you are negotiating, there are a lot of side items that can go into the mix. If you were buying a house, what kind of things could you bundle into the contract? Carpet allowance, move out date, curtains, appliances, etc. These are things that you could take or leave but give you flexibility in the negotiation.
Make a list of all of the different options and permutations you have available and that you know the other side has available. Consider things that might not make a difference to your bottom line at all but that would be important to the other side.
The goal is to have two opposite sides come together so that both are happy. Anticipate that there is going to have to be some compromise. It’s like when I cook dinner and then my husband does the dishes. Every successful negotiation ends with both sides coming away happy. It’s particularly important if you plan to continue to work together after this particular contract is up.
Use counter offers to find a way to come together….like these two!
Counter offers can include the big terms such as commission rates or those “other” items that you prepared to bundle. It’s easiest to counter offer with things that can be quantified in numbers because you can “split the difference”. For example, meet in the middle on commission rates, cookie length, social media mentions.
If a merchant doesn’t want to give a placement fee or flat bonus, offer bonus tiers based on volume of sales. An affiliate who trusts in their traffic will see the opportunity.
Rather than basing your negotiation on feelings or supposition, use objective standards to reach a deal. Not only does this create a fair agreement but standard terms can help prevent future problems with the execution of the contract. It shows that neither side took advantage of the other.
Accurate measurements are important.
Normal criteria include: market value, precedent, professional standards, costs, tradition, etc.
Objective standards in affiliate marketing could be published results such as surveys or numbers that you have compared to competitors. Don’t forget that year over year and month over month growth stats are objective indicators.
Every negotiation should end with a statement of terms. It makes it clear who is responsible for what. The formality level is dictated by the size of the deal and the expectations of both parties. The more money and time involved, the more formal the contract needs to be. Sometimes the contract will actually have to be in writing according to law. Don’t ever assume because you had a “verbal commitment” or an “oral contract” that it is binding. Not only are these hard to prove, but they are often not upheld.
The most basic written confirmation is an email with the expectations for both sides. You can also change merchant terms in the network to indicate commissions, bonuses, cookie lengths, etc. Insertion Orders and more formal contracts would be required where the dollar value is high or the term commitment is long. They might also be used in the absence of network tracking.
Get all 10 steps including the 5 that we talked about today.