Creating a new software affilate program - seeking opinions

[SunnyMike]

Hi everyone. I am a software developer in a small company. We have a downloadable product and website live and ready, and want to start an affiliate program to get our product out there into the public eye. I would like to outline the basics of our proposed affiliate program (without identifying the product or ourselves as I don’t want to break any forum rules or appear to be advertising) and get feedback from seasoned affiliates on whether you think it’s a good idea; whether it would appeal to you; what pro’s and con’s do you see; etc.. This is the first time I’ve stepped into the world of affiliate marketing. I’ve done some research, but I know the people in this forum will know way more than I do about it. The details are:

· Affiliates advertise the software on their website, or to their audience via their blogs or email lists.
· The software operates on an annual subscription model. It can be single or multi-user. It starts from around $120 per annum for a single user up to around $1,000 per annum for 15 users. Customers can also pay for more than 15 users if they wish.
· Affiliate commission is paid per customer subscription as follows:
- First 100 subscriptions (1-100): 20% of subscription fee
- Next 100 subscriptions (101-200): 30% of subscription fee
- Subscriptions beyond that (201+): 40% of subscription fee
· The commission will be residual for an additional four years after the first sign-up by a customer, which means that as long as the customer continues to re-subscribe each year, the affiliate will continue to receive 20-40% of each annual subscription fee up to a total of five annual subscriptions by the customer.

· Customers will pay on our website via PayPal.
· Affiliates get paid via PayPal.
· Affiliates get paid 45 days after the end of the month the sale occurred in (to assist with fraud prevention).
· The software can be downloaded and trialled before the user has to register, so there will be a time lag between customers downloading and then signing up.
· To link an affiliate to a customer, each affiliate will be given batches of unique codes (guids) that customers must use when paying, so a potential customer will have to contact the affiliate for a code.
· Also, we will be taking non-affiliate sales directly on our website, but if the customer doesn’t have an affiliate code our prices will be 25% higher that if the customer goes through an affiliate, and we will clearly display to the customer that they can get a 20% discount if they find an affiliate and get a code from them.

Additional Info
· The software has been submitted to the major download sites but we’ve found once it drops off the ‘new items’ list it becomes invisible among the masses of other software on those sites.
· Our software doesn’t come up in the first ten pages of Google search results when searched using relevant keywords.
· We’ve had around 350-400 downloads since mid-August – mostly from the download sites.
· We want to avoid using middle-man affiliate networks if at all possible to avoid paying their commission.
· We feel we are well-priced vs. our competitors for the market we are targeting – small-medium sized businesses, especially considering customers can install and try the software themselves and aren’t paying for consultants which would usually be the case for this kind of software.
· All prices are in Australian dollars.

That’s about it so if you could please let us know what you think we would appreciate it. I know this is a long post but I’ve seen in forums when people ask this kind of question the replies are usually “well give us the details”.

Cheers…

 

[Tim King]

Hi SunnyMike,

I've not launched a product in that way, but will be soon and will also be using the affiliate model at a later stage so can only off basic guidance. With regards to your issue of the product to being as visible as you'd like or expect, check the video below out as I think some of his techniques to drive up a super high influx of sales traffic might be something you could look into:

Is it reasonable that your software will be selling in its thousands? The reason I ask is compared to other models those %'s for affs are starting low for the total sold by them. If they don't think they can sell more than 100, then they may not bother, and instead go for a flat rate aff model with another product that cuts them at 50% no matter how many they sell.

With the management of the subscriptions/payments/commission, what are you using for this?

 

[YourMlmTools.biz]

Part of using established affiliate management companies are them taking care of legal issues, refunds, thefts etc.. Are you sure you want those headaches?

Rick

 

[SunnyMike]

Hi Tim & Rick. Thanks for your replies. I take both your points about how are we going to handle subscriptions/payments/commission and legal issues, refunds, thefts etc.. I’m a database programmer so I was going to build my own app to store affiliate info and use PayPal to handle money transfers, but if using an existing affiliate network is going to satisfy affiliates that they will get paid, improve our reach to affiliates, and handle all the crap, then now I think maybe it’s a good idea not to try and re-invent the wheel.

Tim I watched the video – very informative. I liked the bits about affiliates’ trust in merchants (or lack thereof); re-enforcing how affiliate networks handle everything; and how their internal search engines are like a mini-Google and if you’re not at the top you won’t get found by affiliates.

I do believe it’s possible that usage of our software could get into the thousands - based on our pricing and that it’s self-installable, and that’s definitely our aim and what we’re hoping for, but we are starting as a brand new, small player, so it’ll be all about reaching potential customers and gaining credibility. Presently we haven’t got the knowhow to do a co-ordinated affiliate launch, nor the cash to put up prizes for affiliates so we’ll have keep that for down the track ;-). Regarding the commissions, we had a meeting about the commission percentage scales and that’s what we came up with. I’ll take your words back to the man who holds the purse strings and see what eventuates.

One main problem I see for us is going to be the lag between download and sale. You have to give people the chance to try the software for free for a while before they buy and that’s probably going to turn off most affiliates, and how do you connect the sale with the right affiliate when the time between download and sale will probably be months (you can enter so much stuff into the software and then you have to buy)? Also we use a third party website to handle our software’s product keys, which allows us to increase/decrease the number of users in the customer’s organisation, and revoke product keys if required. I don’t know how this would integrate with affiliate networks’ systems. It might have to be a “your product key will be emailed to you within 24 hours” situation.

I appreciate the advice and information you both have provided. It has given me a possible way forward as follows:

1. We set ourselves up in an affiliate network to satisfy the concerns of affiliates, and to make our lives easier by having all the administration and payment work taken care of (now I have to research which would be an appropriate network).
2. Our assumption will have to be that because our model is not “instant-sale” then we won’t appeal to most affiliates, but we will still be in an affiliate framework and that aspect will at least cover the logistical concerns of potential affiliates.
3. We then have to seek out our own affiliates and invite them to join us through our affiliate network and help sell our software. These affiliates will have to understand the lag between download and sale, and will probably have to have some kind of ongoing, trusting relationship with their audience where there is regular two-way communication between them so they can recommend the software and court the customers, and where the affiliate will have more confidence that their audience will return to them when it comes time to buy. We'll probably start with business and industry associations around the world to help us promote it.

Thanks again guys for your advice – much appreciated, and if you have any advice for anything I’ve said above I’m all ears.

Cheers,

SunnyMike.