ClassicCloseouts.com looks outside for cost-effective affiliate management
Over the past 14 months, online apparel discount retailer ClassicCloseouts.com has experimented with many ways to staff its affiliate program, but it wasn’t until about six weeks ago that it found a model that it believes will work: turn virtually all the day-to-day management of the program over to its affiliate network provider, Commission Junction Inc., Daniel Greenberg, the company’s executive director, tells Internet Retailer.
“We have had up to six people working in-house to run the affiliate program,” says Greenberg. “We’ve hired seasoned Internet professionals, we`ve hired qualified but untrained people and tried to train them; we tried untrained people working under professionals. We couldn`t find the proper set-up to justify the expenses we were incurring in that department.”
The problem was that the strength of an affiliate program can also be its greatest drawback, Greenberg says: the breadth of advertising exposure that thousands of partner sites can bring to a program, balanced against the cost of maintaining those relationships. “We realized doing it in-house wasn’t going to be cost-effective on our end because we couldn’t figure out a way to do that,” Greenberg says. To solve the problem, ClassicCloseouts assigned that responsibility to provider Commission Junction, whose affiliate network it already had been using under its earlier efforts to run the program internally.
Under its new agreement with Commission Junction, instead of having as many as six employees working on managing its program in-house, ClassicCloseouts has what Greenberg estimates is about 40% of one affiliate manager`s time at Commission Junction and about 10% to 15% of as many as three others at Commission Junction who work on various aspects of his affiliate program. Greenberg himself spends a few hours a week overseeing the program and monitoring results, while his designer staff of three and his programming staff of three are available to push banners, copy and other creative elements through to Commission Junction or address affiliate integration issues as needed.
Greenberg says it’s too soon to assess how much time the new arrangement, barely a month old, will require of his programmers and designers. But he’s prepared to hire extra capacity in those departments if program results justify it. "If Commission Junction needs time from my designers, that means they are doing the work and generating sales, recruiting new partnerships and establishing new relationships. If they are doing that, they can have all the creative they want – that’s what we are paying them for,” he says. ClassicCloseouts compensates Commission Junction on a revenue-share basis.
Greenberg, who estimates that under the earlier arrangement with Commission Junction affiliate sales represented only about 5% of annual sales that are forecast at about $10 million this year, would like to see that number increase to 20% or more. “It’s up to Commission Junction to really go at it,” he says. “There’s really no limit.”
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