Back in 1999, Crucial Technology faced a dilemma. A division of Micron, they were the only supplier of factory-direct memory upgrades to end users. This means they had a lot of websites knocking on their door offering to promote their products to consumers.
While many of these sites had the right demographics, they did not satisfy the company's media buying criteria in terms of size or other factors. To make use of this untapped marketing potential and reach, Crucial launched a pay-per-sale affiliate program, and soon after hired Jared Williams to manage it.
He says, "There's a huge customer service element to running an affiliate program. That's when Crucial decided to go ahead and make the leap, and get me in there full-time."
His goal was to turn the program into a significant sales channel.
Williams focused on two ways of increasing affiliate performance:
Tactic #1: Providing a wider range of creative
Crucial uses Commission Junction (CJ), a web-based advertising network that deals only with pay-for-performance, to handle the program.
Affiliates log into their account, view a collection of linking methods and creative promoting Crucial, choose those they want to use, then copy and paste the relevant HTML (which includes appropriate tracking codes) into their site or email campaigns.
Williams offers affiliates the use of as wide a range of linking formats and creative as possible, so they can choose the ones best suited to their site, marketing approach and audience. (Link to samples below.)
The emphasis, though, is on text-only links, which fall into three categories:
a. Just the company name: Crucial.com
b. Advertisement-type text links: Short text advertisements, such as a sentence extolling the benefits of a memory upgrade.
c. Top-selling product name text links: e.g. "128MB PC100". Each link leads to that product's specific purchase page.
Aside from links, Williams also offers affiliates a range of more "traditional" banner creative; banners, buttons and skyscrapers in various sizes.
Williams continually updates this creative. As soon as the product bestseller list changes at the site, for example, he modifies the affiliate link collection to reflect it.
He also updates banners to feature the latest prices (computer memory is a commodity market, so prices can change quite often). Since affiliate websites call banner images from CJ's servers, Williams changes a single image file and sees that creative updated across all publisher websites.
"If I didn't do this, I'd probably get about 10 phone calls on the first day they weren't updated. The affiliates earning a consistent income stream from the program are always on top of the changes that I push out."
Tactic #2: Building closer relationships with affiliates.
Williams targets both a general improvement in the merchant- affiliate relationship, and closer relationships with his top- performing partners.
While a lot of other merchants have people running their affiliate program as an adjunct to their main job, Williams is 100% devoted to managing performance marketing partners. He spends a third of his day on the phone to affiliates and much of the rest dealing with affiliate email.
"I give out my personal email to the whole affiliate base. I don't hide behind any generic email address, so I spend a lot of time working one-on-one with both our highest-performing publishers and the little guys."
He also sends out a regular newsletter for affiliates (link to sample below), typically containing: o News of new products or promotions o Examples of appropriate creative for promoting the above, with direct links to the relevant HTML o Current pricing and lists of top-selling products o Links to Crucial-produced content that affiliates can use on their sites.
In the absence of direct competition, Williams worries less about top affiliates drifting away to other merchants and more about helping them grow their sales.
He offers top performers incentive payments to reward them for sales improvements, with targets and rewards designed on a case- by-case basis.
When an affiliate asks to be bumped to a higher commission structure, Williams first examines their past performance record. Then he and other members of the Crucial marketing team consider the affiliate's potential, based on an examination of their website(s), their target audience and any metrics they can provide.
If they show sufficient promise, they'll be offered cash incentives. "I evaluate their past performance, set goals for them, and offer cash in exchange for reaching those goals."
Since June '01, affiliate-driven orders have risen 27% at Crucial's US site. Williams says, "The affiliate program brings in a great deal of revenue - we bill it as a multi-million dollar program. It's grown into a really viable sales channel for us."
The program has attracted around 12,000 affiliates. Of those, Williams considers roughly 5000 to be active participants in the program, producing at least one clickthrough a month.
"The average top performing affiliate is making over $3000 [in commissions] a month with our program alone."
Williams puts Crucial's ability to attract top-performers down to the relatively high commission rate for computer hardware sales (the base rate is 7%), the ability of creative and Crucial's site to attract and convert visitors, and his communication efforts.
"One of the things that sets us apart is our ability to work one on one with affiliates. There's a person who can be contacted at any time. When they get an email response from me, they can't believe that someone's actually contacting them. That kind of personal attention goes a long way."
1. Surprisingly over the history of the program, the best performing creative is simply the hotlinked word "crucial.com."
Why? Williams says that many of the successful affiliates write up a short pre-sell piece on memory upgrades and then include the simple link as part of that. The use of the Crucial.com domain also exploits the advertising and branding work done by the Company.
"We do a lot of other types of advertising media; print, radio, television etc. That serves to build up our brand name. Affiliates can play off of that effort by using the Crucial.com text link - and it's proven that you get sales by doing so."
2. Text links in general outperform image links (banners etc.) by 5:1, based on CTR and sales data. Williams gauges the performance ratio within the text links as 5:4:2 for Crucial.com / advertising text / product text.
According to CJ Open Marketplace data, each click generated through the simple "crucial.com" affiliate link is producing an average of around $4.5 in sales (as measured over a recent three month period). The equivalent figure for the program as a whole is about $2.86.
The resultant equivalent payout rate per click to affiliates places the Crucial program in the top 10% of the 1200+ merchants using CJ, which helps attract more and larger affiliate partners.
Next: Williams is developing an info hub to provide affiliates with current articles and copy they can use on their sites. This would support those affiliates building mini-niche sites around Crucial's program or specific memory products.
"They don't have ten hours to spend on our website to educate themselves about memory, so they just need some simple text copy they can use to build their pages, and promote us and our products."
The views and opinions expressed in the articles of this website are strictly those of the author and do not necessarily reflect in any way the views of MarketingSherpa, its affiliates, or its employees.