The office supplies retailer say it sacrificed some sales to improve online profitability. It also redesigned its business-facing e-commerce site, StaplesAdvantage.com.
TicketsNow’s personal touch helps affiliates attract more eventgoers and boost sales
When Tim Manley set out to build a side business creating web sites to direct traffic to large Internet retailers-earning affiliate fees as the middleman-he identified online ticket sales as an area with strong potential. “What I like about the affiliate programs is that tickets are not something people shop for online and then go buy somewhere else,” he says. “You can buy electronics at almost any store, but people are limited to where they can buy tickets. The Internet has opened up a way for people to get access to premium seats to what often are sold-out events.”
His instincts proved right. Since he started his business in 2003, he has had 30,000 confirmed sales and generated almost $12 million in revenue for TicketsNow, a secondary market ticket seller that buys tickets from licensed ticket brokers and sells them to consumers on the Internet. On his site, BuyTickets247.com, he features event information and enables consumers to check availability and order tickets through TicketsNow, with Manley receiving a percentage of every sale.
While Manley works hard to advertise his site and promote the right events to customers, his success has been bolstered by the personal attention he receives from TicketsNow’s affiliate program, he says. When his sales started to rise, the company flew him and his wife from their home in Montana to Chicago to meet its team, learn more about the company and take them on a tour of the city. Just as a large company might lavish attention on a top independent salesperson, TicketsNow showed them the town.
“I have worked with many different affiliate programs, and no one has ever done that,” he says. “It was a good chance to get to know them better. You could see they went the extra mile to get to know us and establish a good relationship so they could understand our needs. What it’s turned into is that I can pick up the phone and give them a call at any time.”
Cementing that relationship was just what TicketsNow had in mind, says Joe Domek, director of e-commerce and head of the affiliate program at TicketsNow. About 20% of the e-retailer’s annual sales come through affiliated web sites.
Catering to affiliates that serve as ticket e-retailers themselves, such as Manley, to web sites that simply want to offer a link to TicketsNow.com, the affiliate program has played a major role in the growth of TicketsNow, CEO Mike Domek says.
He founded the company in 1999, launching the web site as a way to better capitalize on a ticket-selling business he had built throughout the 1990s. It has grown steadily. In 2006 TicketsNow had revenue of $202 million, up from $142.3 million in 2005. In March the 300-employee firm received its first influx of venture capital funding-$34 million from Chicago’s Adams Street Partners that’s slated mainly for building brand awareness.
But capital was scarce early on, and back then the affiliate program drove more than 40% of revenue, Mike Domek says. “When we launched, we didn’t have any outside funding and we were very cautious of what we spent money on. We fell in love with the affiliate model, where you can literally advertise on somebody’s web site for free, and you don’t have to pay anything unless they sell something for you.”
Combing the ‘net
At first, a part-time person combed the Internet looking for sites that would be a good match for a ticket sales link. Today a five-person team manages the affiliate program. And even with 15,000 affiliates and enough capital to advertise on billboards and radio as well as online, the company continues to pursue new affiliate partnerships.
“We are always looking for web sites that have relevant content and contacting the webmasters, owners and marketing professionals at those organizations to discuss the business model,” says Joe Domek. “There are a lot of sites that could capitalize on it. A baseball-specific site, for example, might take advantage of the fact that the people visiting their site might want to actually buy baseball tickets. By adding a link to TicketsNow, the site is providing visitors with a resource-and creating revenue for itself.”
Unlike many other consumer goods sold online, the cost of tickets adds up quickly as individuals attempt to get the best seats possible for high-profile events, meaning affiliates are able to make substantial income. Only 13% of e-retailers with an affiliate program have paid a single affiliate more than $20,000 a month, according to the 2007 AffStat Affiliate Marketing Benchmark report, and TicketsNow is one of them.
“The tickets category lends itself to an affiliate network because of how ideal it is to buy tickets online,” says Jim Okamura, senior partner at retail consulting firm J.C. Williams Group Ltd. “Affiliate traffic leads to better conversion than it does in other retail categories in which you can buy more easily offline. Affiliate sales in other areas are really plateauing, but they continue to do well in tickets.”
Links to customization
The technology behind the TicketsNow affiliate program has grown over time as well. TicketsNow has remained with its initial vendor, Kowabunga Technologies.
“We’re now able to provide data feeds to our affiliates so they can keep the user on their web site longer,” Mike Domek says. “We can populate their web site with the data, and present the inventory and even the order form on the affiliate’s site, and the order comes through to TicketsNow once it is complete.”
Affiliates still can choose to simply offer a link to the web site, and a range of options in between, Joe Domek says. Affiliates, for example, can create links to specific events. About 90% of TicketsNow affiliates take this simpler approach. But the 10% that uses the integration capabilities, where content is sent to their site, are driving the majority of revenue within the affiliate program, he says. All affiliates are able to track their sales through reports. Affiliates typically earn a 7% commission on gross ticket sales. “Being that our average sale is $425, we are paying on average $30 per transaction,” Mike Domek says. Affiliates that drive a large amount of volume can earn a higher percentage per sale, he adds.