OK, I think this is a great time for a story:
Once upon a time there was a cookie store. This cookie store had been around for many, many years and had built a great customer base who liked what they sold. Over the years they had become one of the biggest cookie stores in the world and people came from all around to eat their cookies.
In a small house on the edge of town lived a sweet lady who everyone in town knew and loved. Every week without fail she would open her cupboards, turn on her oven, and bake 3 dozen of the best cookies you could ask for. These cookies were made with years of care and love behind them and only had the best ingredients. Once a week the lady would pack her cookies up in basket and make the trip to the cookie store.
For many years the lady sold her cookies to the cookie store at a very fair price and she delivered three dozen without fail week after week. In the beginning the cookie shop loved getting these cookies but as the years went on they lost sight of how important these cookies were.
Meanwhile, the cookie store received truckloads of factory made cookies every week. Worse yet, after a while there was a group of hijackers who would steal the truck right before the deliveries were made and charge the cookie store even more for the cookies. They also demanded the cookie store pay even more than before for their deliveries and the cookie store did so month after month. Sometimes the hijackers even stole the sweet lady’s cookies while she was delivering. If this isn’t bad enough from time to time there were hijackers in the actual store that stood by the cash register and tacked on their fee while the customers were checking out. To make things even worse the cookie distributors were in the ear of the cookie shop saying they should be doing more business with the cookie factories and hijackers and they are paying these distributors a LOT of money for this bad advice. Did I mention the distributor gets a cut of what the distributors and hijackers are making???
After a while the cookie store inexplicably told the sweet lady they didn’t want her cookies any more. All they wanted were the overpriced, factory made cookies. Don’t get me wrong, the factory made cookies are very tasty but they don’t hold a candle to the homemade cookies from the lady. With the hijacker’s fees and extra costs the factory cookies ended up costing more than homemade cookies but the cookie store was just interested in someone who could deliver hundreds and hundreds of cookies, not just the 3 dozen the lady would make.
Little did this store know that the people who came in and bought the cookies the lady made would no longer shop there once they found they weren’t carrying the delicious cookies they had come to love. They knew the lady and knew how much she cared about the cookies she made and they wouldn’t support the cookie store any more. They started shopping at a competitor.
OK, enough of the story. Do you get the picture? This scenario is happening every day in the affiliate industry. “Small” affiliates (sweet lady) who have been consistently driving sales for years are getting pushed out of the picture by merchants (cookie store) who only want to work with the big coupon/deal sites (factory cookie makers) and toolbars (hijackers). Affiliates who have been driving 5, 10, 20 sales a month and more are being removed from affiliate programs by big, brand name merchants because they aren’t big enough.
I have no idea how the merchants can justify this. I have nothing against the coupon sites who do things the right way (drive new customers, create sales, are compliant with affiliate terms, are responsive, etc… more on that in another blog post) and are benefiting merchants. The toolbars are another story completely and are pretty much of no value to any smart merchant. But to remove a quality affiliate who can drive incremental sales??? I don’t care if that affiliate is driving 2 sales a month, 50 sales a month, or 1,000 sales a month. Any sale that adds to the bottom line of a merchant should be one they covet.
How can we prevent this? Talk to merchants and educate them. Refer them to a quality affiliate manger (contact me if you want some suggestions). Tell them to get away from networks that promote this kind of behavior and go to quality affiliate networks like Shareasale.com. Connect with your affiliate managers and build a relationship with them. Get involved in the industry through groups like The PMA.
Personally I think there will always be plenty of merchants who value the “small” affiliates. The smart ones who know how to value the affiliate channel and know what makes an incremental sale will bend over backwards to work with affiliates who can drive value. These affiliates might get shut out of some of the big brands but in most cases there are quite a few different merchants who would love that traffic. These merchants might not have the brand names but they do have other selling points like better customer services, better shipping rates, cheaper prices, more knowledgeable staff, etc. that give the customers a reason to buy.
Stories like this are becoming way too common. What do you think? How can we keep this from happening?
BTW, if you have a bunch of these homemade cookies drop me a note. I know plenty of merchants who would be happy to work with you.
Joe,
When I heard this story happen in real life recently, I asked “how can the PMA help?” But then when you look at some of the “Industry Champions” of the PMA, they benefit from these actions, so why would they support an organization who hurts their business?
I was sold on the PMA being a trade organization for the affiliate (performance) marketing industry. If they truly are acting in the best interest of our industry, we’ll see some educational materials put out by the PMA and outreach to the big brands who are dropping small, niche affiliates.
I think there are enough good people in the PMA now though that at least those conversations can start taking place. The PMA probably won’t solve all the issues we see in this industry but with people like Brian, Tricia, Pat, Robert and others on the board I think the organization is in good hands.
I like the idea of educational material being available to merchants. But everyone coming to a consensus of what are “best practices” will be nearly impossible.
I’ve been trying to think since I read this last night just what I wanted to say about it. First and foremost, thank you. Not many affiliate managers are willing to take a stand publicly like this to support the “small guys.” Second, I’m really to the point of trying to figure out what can be done in a productive way not just to save myself (which has been my focus so far) but to help everyone else in the same situation as me. I think more than anything we need some help from the networks. If the networks are making it either harder or more expensive for merchants to have a lot of affiliates, unseasoned affiliate managers are going to drop the small affiliates. Conversely, if the networks are singing the praises of working with smaller affiliates (like we saw ShareASale doing at ThinkTank last year), merchants are going to jump at the chance to bring a lot of affiliates on board. The question is how to get the networks to take the smaller affiliates seriously?
Eric – I’d love to discuss the PMA angle.
In general, are you more concerned about:
a) The “hijack” portion, meaning a discussion on toolbars, plug-ins, etc…
or
b) The dropping of Affiliate based on being a “lower performer”, etc…
I believe they are 2 very different conversations.
I will let Eric speak for himself but for the purpose of this discussion I am more concerned about merchants dropping “low performer’ affiliates.
The toolbar thing has been beat to death (and more beatings probably need to be administered) but that is a topic for another day.
Sorry Brian, just saw this. “The dropping of Affiliate based on being a “lower performer”, etc…” is what I was referring to.
PMA Champion Members who are affiliates benefit from small affiliates being dropped. So why would they fight for the small guys?
I’d probably have to generally disagree on that because there are plenty of Industry Champion members who are interested in keeping those relationships. All of the networks, for example, solution providers, etc…
It’s an interesting opportunity though. There are thousands more “little guys” than there are “big guys” – and if all joined and participated at a high level they would have the opportunity to shape mission/policy etc… I’d love for there to be 10,000 “little guy” members participating in Councils, producing content, and running for BOD seats.
The membership of the PMA decides who we are, and who makes up the BOD.
I think the more difficult piece here is…. what piece of education could really help. Short of a PMA “press release” that says “Hey retailers, don’t do this” (which wouldn’t do much good) – the difficult part is coming up with the data, study, education etc…
That’s the part that we would all need to help on if done.
Thank you for your article, I am one of the smaller affiliates that is constantly seeing warning emails about being dropped if i don’t up my sales. It’s discouraging and disheartening. But I have to let it go, not feel bullied and continue to post what’s relevant to me and my readers without succumbing to pressure of pushing out one more post for the bully out of fear of being dropped.