CHAPTER 2: CHOOSING AN OFFER
This chapter is going to help you decide how you’re going to make money. There are lots of ways people monetize traffic – anything from AdSense to creating your own t-shirts. I’m going to focus on affiliate marketing opportunities and teach you how to choose an offer you’ll enjoy promoting and make money from.
In this chapter you’re going to learn:
- How to get started on your first affiliate campaign.
- How to pick your first offer to promote (and the worst thing you can do as an affiliate when you’re making this decision).
- How to choose between similar affiliate offers.
- The potential pitfalls of promoting offers for recurring commissions vs up-front payments.
- Why it’s essential you test everything you do in your campaigns.
What I want to talk about in this chapter is how to start your first affiliate campaign.
With this in mind, if you’re new to the game I recommend promoting physical or digital products via email for a CPS (cost-per-sale) commission. You can make an absolute killing promoting CPA (cost-per-action) and CPL (cost-per-lead) offers, but these offers can be hard to get access to, and the quantity of traffic you need can bankrupt you if you’re not careful.
If you want to learn the ins and outs of CPA affiliate marketing I definitely recommend you start studying up. This is how I ultimately made the biggest breakthroughs in my understanding of offers and traffic sources. It’s just that my advice would be to stick to the basics until you’ve earned enough to quit your day job and have about $10K ‘play money’ tucked away.
When you’re ready to dive into app installs, pin submits, sweepstakes, mobile pops, tracking tokens/postbacks/pixels, scripts, caps, angles, VPS, day parting and placements (just to give you a taste) and jack into life in the fast lane, join STM. You’ll find your way from there.
In the meantime, you can easily get the hang of affiliate marketing without a lot of financial risk by using the simple methods in this book and promoting physical products from Amazon or digital products from Clickbank. Another good network that’s pretty easy to get accepted to is Share-A-Sale.
There are thousands of affiliate networks and programs you can join, but you’ve got to start somewhere and most of the best offers just aren’t available until you have a track record, so just get started. If you’ve already been accepted into any other affiliate networks or programs then go for your life with whatever you like. Otherwise, there’s plenty of money to be made from these three networks.
If you want to read a great article about some other affiliate programs and networks that are mostly easy to join and use, check this post on Minterest:
How to pick your first offer
Obviously, the first thing you need to do before you can start making money as an affiliate is pick an offer. But which one?
To some extent this is a pretty subjective decision you’re going to have to make and I’ve always gone with my gut to some degree if I’m getting into a new niche just to test the waters.
If you know a bit about the market you’re getting into then maybe you already know a couple of reputable products you can promote. For example, if you’re in the fitness niche you might have a home gym and have some experience with some gear. You might want to see if you can find that gear on Amazon and promote it as an affiliate.
But if you’re not familiar with the landscape, you’re going to want to do a bit of research before you dive into promoting something. Often this means at least purchasing the product you plan to promote so you can understand what it’s really about, but that’s not always necessary (particularly if you’re a Hit’n’Quit style marketer).
The worst thing you can do as an affiliate is promote something that sucks. This is going to be hopeless for your reputation (if you’re in the ‘committed relationship’ model).
But even if you’re just running a one-off campaign and don’t care a whole lot about your leads’ satisfaction with the product (i.e. they can get all the refunds they like as long as your ROI stays profitable), you’re still going to make more if you’re promoting something that people will be satisfied with.
There are a few things I look for to start with before I end up with a shortlist of options.
The first thing I want to see is whether the product is reputable. I mean, are there solid testimonials from real people? This isn’t just something that makes a good sales pitch, it shows that people who have bought the product like it and are happy.
You might also want to check the program’s reputation towards affiliates. Does the program or network have a lot of satisfied affiliates/good affiliate managers/good support?
Run away if the offer is on a small network of if it’s an in-house program and there’s a lot of negative feedback. It just isn’t worth worrying about getting ripped off after you’ve put a lot of money or effort into promoting something. I’m speaking from experience here.
Something else I look for, particularly with info products, is how relevant it is today. I mean, there are plenty of old Clickbank products lingering around that were made for a different generation and don’t have all the technology built in that up-to-date products have or just aren’t relevant because things have changed since the product launched (this is particularly relevant for a niche like internet marketing).
The next thing I look for is the price, payout and commission structure.
This can be a tricky thing to compare between different offers and it can be a bit of an art to decide between a couple of different options.
Let’s take an example of two different offers on the Clickbank marketplace in the games/strategy guides niche and see how they compare:
Pro tip: Strategy guides are a hot niche to promote as an affiliate and I’ve been doing it for years (so don’t say I never spilled any secrets)…
At first glance you’ve got Dynasty’s WoW guide with an average $18.96 per sale against Hayden’s WoW guide with a whopping $122.13 per sale.
But let’s have a look at the affiliate programs in more detail.
Dynasty affiliate program:
- Dynasty has been around for 10 years (this is great to know because if I tap a market and generate a good ROI, I want to be confident I can keep promoting this offer for as long as possible and ten years in the business gives me confidence they’ll be there for a while yet).
- Lifetime cookies (this is great because if someone clicks my affiliate link and buys something 5 years later – or buys the upgrades every year for 5 years – I’m going to get the commission).
- Upsells (this is great because the entry price is lower so I’ll get more conversions and then boost my commissions on the back-end to proven buyers)
- Email marketing (I love promoting a product that then continues to promote for me. This means I can hit & quit once and then rely on the vendor to do the email marketing part of the equation for me)
Hayden’s affiliate program:
- Hayden’s guide has been around for four years (which isn’t as long as Dynasty, but it’s still a decent period of time)
- $1M in affiliate commissions (so there’s plenty of money to be made)
- There seems to be a lot of testing going on behind the scenes to work out what price points and products convert the best (this is good to know because that’s less testing work you have to do)
- Hayden’s recurring subscription retention rate seems high (which is great news because recurring commissions aren’t always what they’re cracked up to be).
So which one do you choose?
Well, let’s look at one more statistic from the Clickbank spotlights above.
Dynasty’s guide has an average initial $18.78 commission per sale. This is the amount you’ll be paid on average on the first day the sale is made.
Hayden’s initial $/sale is a lot lower: only $2.65.
So the decision really comes down to three things:
- Do you want to turn a profit quickly (choose Dynasty)?
- Are you willing to wait while the recurring commissions stack up over time (choose Hayden)?
- Does your own testing confirm the stats on Clickbank?
Ultimately, as you build your email list you’ll be promoting both of these offers because they’re both going to interest your subscribers.
On the surface the idea of recurring commissions seems like a brilliant option for making bank with affiliate offers and to some extent this is true, but be careful – there are some serious pitfalls when it comes to recurring commissions.
To give you the most obvious problem with choosing a recurring commission over an upfront payment is what happens when someone signs up for only one month. In this case, you could have pocketed the big upfront commission when you otherwise only end up with a couple of bucks.
Usually it isn’t a big problem because if you want to promote a particular product you probably also get to promote the other, particularly if you’re doing email. But it gets tricky when you have a choice.
In my experience if you have a choice then always choose the up-front payment.
Well, consider what a recurring commission really means over time.
Let’s use the example of web hosting, where it used to be common to get a choice between two options – fixed upfront payment or monthly % of the plan (note that most hosting affiliate programs only offer upfront now).
Let’s imagine it costs you about $15 in expenses (e.g. traffic) to make a sale.
You have a budget of $150 per month and you plan to reinvest half of everything you make to increase your monthly budget.
Your first month you make 10 sales.
If you choose $50 upfront then you’ve made a cool $500.
Awesome, you’ve got a positive ROI instantly.
With an increased budget, you get 15 sales the next month.
That’s another $750.
Now you keep going with this strategy (keep half/reinvest half) for a full 12 months. At the end of the year you’ve made a profit of about $68,000.
Now let’s consider where you’d be if you chose the recurring option and get paid $5 per month per customer.
At the end of the first month you’ve made $50 and by the end of the year you’re almost $12,000 in profit. But now, if you stop advertising you might continue to make over $7,000 pure profit.
But even at this rate (and assuming no one ever stops their monthly subscriptions, which is a terrible assumption) it’ll take you another 8 months to reach the same level of profit as you did with the upfront commissions.
If there’s one thing I’ve learned over the years promoting affiliate offers, particularly doing CPA, it’s that you’ve got to test everything.
All the advice I’ve given above about choosing an offer is dependent on this one overriding principle.
Clickbank stats are a great first glance at an offer, but the averages just don’t mean anything unless your campaign is getting the same results, which it won’t.
You’ll always get either a better or worse results that an average statistic.
Testing is the big separator between success and failure in this game.
I mean, let’s assume we decide to test Hayden’s guide with one campaign and get an initial ROI of 60%. Does this mean it’s a loser?
No. It means nothing when you’ve only tested one campaign.
Maybe you’re doing media buys and have only a banner to get people’s attention. In that case, I’d probably want to test at least 10 different banners before I thought I had a good indication of what my ROI could be. And then I could test all kinds of other things too – using a lander vs direct linking (and testing multiple landers); using an email series to promote multiple times; and changing up the targeting for my traffic source.
The problem with testing is that if your ROI is in negative territory then you’re losing money to start out with. This means you need to know when to quit the offer before you go broke. This isn’t something easy to decide and sometimes you might get to the point where you’re bringing an offer into positive ROI only after you’ve been right at the point of calling it quits.
A great way to test an offer is using ClickFunnels. I’ve already started creating an update to 10K30 called ’10K30 Enhanced’ and one of the case studies I’m including in the new version will show you how I use ClickFunnels to quickly test a new offer (I’ll send you the update when it’s ready). Alternatively, if you have an existing website then you could devote a page to put up a lander and see what happens. If you don’t have a website then I highly recommend LeadPages.
Which brings us nicely to the next chapter, where you’ll learn exactly how to build a marketing funnel, the right way.