Affiliate Profit: Are you losing money?

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Summary:

You are most likely losing money with your affiliate program and didn’t even know it. Let me explain …

I have bad news for you: You are probably losing money and you didn’t take note of it! Let me discuss …

When you signed up with affiliate programs you most likely considered the list below aspects:

– The commission
– The conversion rate

The profit formula looks like a kid play: Commission x Conversion Rate = Your Profit

In reality, there are three huge pitfalls here and if you do not handle them effectively, your revenue is at threat. Let consider them:

– Rate: A high rate indicates a higher affiliate commission for every sale however it might result also in a lower conversion rate If the product is too costly, nobody will purchase. An optimized rate that makes satisfied affiliates and satisfied customers is what you should look for.

– Refund Rate: Refunds can kill your marketing efforts! What deserves the sales you see in your account if consumers request their cash back? A great deal of sales indicate absolutely nothing unless you keep the cash!
A site that likewise keeps refunds really low is much better! There is just one method to keep refunds very low: To provide really high-quality services meeting consumers’ expectations or going beyond what they could expect!

– Item Quality: Quality is king! Quality makes remarkable conversion rates! Quality keeps refunds as low as possible!

How much cash are you losing today?

The money you earn and lose is considerably identified by the quality of the affiliate program you have actually picked as your top choice.

The question is: How do you determine what is more qualitative and what is less?

There is an objective criterion to use for answering this concern and for optimizing your profit: The refund rate of your top affiliate program!

A high refund rate expresses plainly that lots of customers are not satisfied with what they get which affiliates lose cash on their sales. On the contrary, a low refund rates indicates a high level of complete satisfaction amongst consumers and safe earning for affiliates.

If you get numerous refunds with your top affiliate program, you should understand that the quality of this program isn’t enough for keeping these customers pleased and it doesn’t do the essential job for securing your earnings You are losing cash!

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What are great, medium, and poor refund rates?

Expecting an absolutely no refund rate in the long run is not practical. You must want a refund rate as low as possible in your industry.

2% or less: Excellent
3% – 5%: Good
6% – 10%: Medium
11% – 15%: Poor
16% – 20%: Extremely Poor
21% or higher: Escape!

Your affiliate program is reliable and your revenue is secured. With a 6% -10% refund rate, you ought to keep track of closely your merchant efficiency to ensure it doesn’t get worst. Whatever your market is, you are bleeding and there is most likely a much better affiliate program to promote.

What is the refund rate of your top affiliate program?

There are 2 methods to discover the refund rate of an affiliate program:

1) Look at the stats provided by your affiliate program

Do your math as following: Refunds/ Sales = Refund Rate

Let say you make 1000 sales per month, you get a $23.50 commission per sale and about 160 customers request their refund each month. Your refund rate is 160/ 1000 = 16%. In that case, it implies that you must have made $23,500 for your sales however you will get only $19,740 since of the refunds. You lost here 16% of your earnings or $3,760!

You can ask yourself: Is it only I or all affiliates for this program get similar numbers? You can get the big image about the entire community of affiliates that promote an affiliate program if you use Clickbank to promote affiliate programs

2) Using Clickbank payout stats to calculate the typical refund rate of an affiliate program.

In its market, Clickbank releases payment statistics for affiliate programs. The $Earned/Sale element offers us precisely what we need to calculate the typical refund rate of a program.

The $Earned/Sale is the average net quantity made per affiliate per referred sale. This number is generally impacted by refunds and it exposes the real commission made by affiliates. With this number, you can have an inner look at the real efficiency of affiliates programs.

The average refund rate of an affiliate program is:
( Commission – $Earned)/ Commission = Average Refund Rate

What is the refund rate of popular affiliate programs at Clickbank?

As an example, we have taken a look at 3 affiliate programs offering paid studies databases. We have actually found their refund rates very high! You will be shocked at discovering how much money affiliates can lose when promoting these programs:

– SurveyScout: 16.2% refund rate!
– Survey Platinum: 20.9% refund rate!
– My Consumer Study: 35.2% refund rate!

To enter into the information, on November 29th, 2005 figures were as following:

SurveyScout
Affiliate Commission: $23.50.
Average $Earned/Sale: $19.69.
Refund Rate: (23.50 – 19.69)/ 23.50 = 16.2%.
Example: For 100 referred sales you ought to earn $2,350. You will get only $1,969 since 16 customers out of 100 have actually requested their money back!

Survey Platinum.
Affiliate Commission: $23.50.
Typical $Earned/Sale: $18.58.
Refund Rate: (23.50 – 18.58)/ 23.50 = 20.9%.
Example: For 100 referred sales you should earn $2,350. You will get only $1,858 because 21 clients out of 100 have actually requested their cash back!

My Consumer Survey.
Affiliate Commission: $40.84.
Average $Earned/Sale: $26.43.
Refund Rate: (40.84 – 26.43)/ 40.84 = 35.2%.
Example: For 100 referred sales you ought to make $4,084. You will get only $2,643 because 35 consumers out of 100 have requested their cash back!
Remark: My Consumer Survey has actually a poorly created site and a high cost for buyers. We estimate its conversion rate to be significantly lower than other paid surveys programs. Regardless of its high commission, affiliates will lose the most cash with this program.

We find out three lessons about these paid surveys affiliate programs:.
– A great deal of clients are dissatisfied.
– Affiliates lose big cash.
– The quality of these programs is extremely questionable.

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What should you do to stop the bleeding?

You have no impact on the quality of the affiliate programs you promote. Your only real influence is on the quality of your recommendation!

Providing your leading recommendation to a very expert affiliate program that provides the utmost quality services to clients will keep your earnings as high and as safe as possible.

In the field of paid surveys and secret shopping jobs, the most expert program available today is MaximumPaidSurveys.com.

Maximum Paid Surveys is a premium database of paid studies and mystery shopping jobs. It provides a remarkable value to both signed up users and affiliate partners due to its really high quality.

How to determine quality in affiliate programs?

Defining quality is a hard task. In general, individuals can’t define plainly what quality is but they acknowledge it when they see it. What should you look at in affiliate programs?

The most qualitative affiliate programs find the best balance between the value they use to consumers and the worth they produce to affiliates:

1. Worth to consumers It includes:.

– Rich material.
– Great looking website.
– State-of-the-art company.
– Friendly performance.
– Economical Cost for many visitors.
– In-depth documents.
– Benefits strengthening the primary offer.
– Timely Client Support.

2. Value to affiliates It includes:.

– High conversion rate.
– High commission.
– Low refund rate.
– Commission paid on time.
– Great affiliate assistance.

But it’s all up to you to make the best choice for you.

Learn Affiliate Marketing From One Of The Best In The Business Click Here.

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