Mar 12 2008
Next – An Affiliate Marketing Disaster
I haven’t written about Next until now but I’ve been watching in disbelief as the program lurched from one bad decision to another over the last few months. How far they have fallen from winning Best New Merchant of 2007 at the a4uawards last year.
If you’ve somehow missed everything that’s been happening regarding Next then there are a bunch of links at the end of this post for some background reading
If you don’t want to read through all those links then a quick summary of mistakes includes cutting commission rates to 1%, switching networks without respecting the cookies, lack of communication, competitor brand bidding, trying to stifle discussion and an intrusive questionnaire.
However if we now leave Next to lie in the bed they have made what are the key mistakes that Next have made which other merchants could learn from?
Never Reduce Commission Rates – Any reduction in commission rates is going to hurt an affiliate program so always be realistic and take care with your planning to make sure you never end up in this position. If you reach the point of reducing your commission rate from 2% to 1% just close the program instead and affiliates will be less insulted.
Communicate – Throughout the last few months one of the biggest problems with Next has been a lack of communication. No one has raised their head above the parapet to try and engage with affiliates which has made the situation all the worse. When you get this one right make sure you consider the next point…
Respect Your Affiliates – When Next finally decided to try and engage with affiliates it has been in such an insulting & flippant manner that they just seem to be digging a bigger hole for themselves. Making the accusation that affiliates “pollute natural search space with negative comments about the brand” is going to go down in affiliate marketing history alongside Grubbygate. Read this post and maybe even print it out and stick it on the wall.
Accept Constructive Criticism – One of the most worrying aspects of this whole issue is that Chris Frost was rejected from the program due to simply voicing his concerns on his blog. Realise that affiliates are passionate people running serious businesses and although it might not be what you want to hear, try to understand there is a reason for any criticism and look at what you could learn from it and improve.
Good Affiliates Are In Short Supply – There are a finite number of affiliates out there and once you treat many of them badly it’s going to be hard to recover. Take care not to think that your precious brand name is going to have affiliates knocking your door down to promote you. Any good affiliate will have more requests for promotion in a week than they have time to handle so it’s not a case of you ‘allowing’ affiliates to promote your brand it’s more a case of affiliates ‘choosing’ to promote your brand so you better make sure the whole package that you are offering is attractive.
That’s just a few points that I’ve been thinking over but I think Jason at One Little Duck sums up the whole issue in this excellent post
Every affiliate manager action will result in an affiliate reaction!
In simpler terms, if you make a good or bad decision about your affiliate program then your affiliates will react accordingly.
Newton’s Third Law of Motion & Affiliate Marketing
And finally I’ll leave the last word to a merchant that doesn’t have much to learn about affiliate marketing…
Affiliate Marketing is Easy – there’s no excuse to fluff it!
Background Links
Blogs
- Next Affiliate Programme Is A Disgrace To This Industry
- Next – Do They Care About The Affiliate Marketing Industry?
- ‘Next Directory’ – next.co.uk are now saying affiliates are polluting the space?
- Next Directory – Are They Bad To the Bone?
- £313,000 Worth of Next Traffic Up For Grabs
- Cross Brand Bidding – Next.co.uk Tut-Tut !
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14 comments | Leave your comment | Feed for this Entry
Mar 13th, 2008 at 12:18 pm | #
Nice post. This is the first time I visited your blog and through your blog I stumbled upon some more.
Just a token of appreciation.
Mar 14th, 2008 at 8:21 am | #
I agree 100% with you – apart from your first advice. Never reduce commission rates – that’s not very realistic. I agree that merchants should make their calculations very carefully when deciding how much of their margins they can afford to pay affiliates, but that doesn’t mean that the decision cannot be revisited later on. Additions to the product range, supplier changes, stock problems, increase in overhead costs, aggressive pricing policy, all these affect margins and can potentially lead to commission reductions. Always with the 30 day notice and with plenty of communication. The merchants, at least on our network, are very well aware of the damage the reduction can have on their program, so they do not take the decision lightly.
However, reducing it to an insulting rate (from an already pretty awful one) is indescribable. And I particularly enjoyed the excuse “we convert very high, so you won’t see the difference” – for me, that’s an intelligence insult.
Mar 14th, 2008 at 11:45 am | #
I agree with Hero. Merchants should be able to control their commission rate. There are often changes to margins which have a great affect on their business and they need to be able to adapt to make a profit. It works both ways, what if merchant were never allowed to increase commissions?
Mar 14th, 2008 at 1:24 pm | #
hero & HonestAM – thank you both for your comments. I agree that merchants may have to reduce commission rates at times but I still stand by my advice which is “Never Reduce Commission Rates”
I’m not saying it will suit everyone as Hero said (“The merchants, at least on our network, are very well aware of the damage the reduction can have on their program”) reducing commission rates is damaging so I recommend you never do it!
Mar 14th, 2008 at 1:41 pm | #
well, Fraser, it’s either reduce commission now & do damage limitation by being honest why you do it and communicate correctly, or shut down your program in 3 months and possibly your business too, as you will be continuing a non-cost effective channel eating on your profits big way.
Sometimes commission reductions are inevitable, provided they are substantiated. In my eyes, “hey, we’re a well known brand and the numpties will continue promoting us cause they won’t dare not list us for their customers, so why pay them more than we have to” is not good enough reason.
Mar 14th, 2008 at 1:45 pm | #
Thanks Hero – I take your point and I think we are both saying pretty much the same thing
I’ll concede and amend my advice to
Avoid reducing commission rates if at all possible and do it very carefully if you absolutely have to.
We definitely agree about the attitude of big brands
Mar 15th, 2008 at 4:02 pm | #
excellent post fraser!
Mar 17th, 2008 at 11:25 pm | #
Perhaps the advice should be “Reduce commissions at your own risk”, and of course that old classic “don’t give affiliates a label (such as grubby or polluting) that might come back to haunt you”
Mar 18th, 2008 at 12:16 pm | #
It just goes to show that big brand companies are trying their hand at lazy bum marketing with all the added extras of a tramp on acid (no offence to tramps they add to the ecomony in some way!)
Communication is important, but maybe they won an award and that went to their heads and stupidly thought that they would gain more affiliates as a result, but anyway in this game even the big guys have to market often and regularly, and that’s the way it should be.
Cheers for this blog by the way, it presents useful information targeted towards affiliates anywhere, and it targets towards affiliate programs that are linked to real retail companies, that is a huge step away from the usual internet marketing affiliate programs on other blogs.
Mar 20th, 2008 at 11:57 am | #
Just to clarify Next have not reduced their commissions from 2% to 1%. The program is currently running at 2%.
Mar 20th, 2008 at 12:02 pm | #
Next also bonus affiliates £6 for new customer aquisition.
Mar 20th, 2008 at 12:26 pm | #
Hi thanks for the info about next, I do not know the program and I will never.
I hope some day a new affiliate program will try to put it’s affiliate at the top of it’s priorities. they are it’s free salesmen. and they need to have the best support, training and marketing material with the best commission could be paid.
In reality affiliate programs are seeing their affiliate only as potential costumers.
Mar 20th, 2008 at 1:56 pm | #
Fionah – thanks for the clarification. Next did reduce their commission to 1% though didn’t they?
Mar 20th, 2008 at 2:52 pm | #
Hi Fraser. Next paid 1% commission during the January sale period. This lasted between Friday 21st December 2007 at 5pm and Friday 28th at 6am. This is to take into account large reductions in pricing for sale items.
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