Are affiliates a viable growth model for health and fitness companies?
It seems like the health and fitness industry, especially the weight loss industry is littered with affiliate offers. Just go to Click Bank or one of the many other affiliate networks and you’ll see there is no end to the number of offers listed.
The reality is that only a handful of these offers on Click Bank and others are really crushing it. All the others are performing lukewarm at best and often times worse. You can easily sort by gravity score to see what’s converting.
This is great for the big boys who dominate the affiliate networks, but what about everyone else?
Affiliate traffic can be very attractive to the new health marketer with no list, or a small list. But you’ll likely not get much traction on any affiliate network if your offer does not already convert well. And even if your offer does convert well to your list does not mean it will be a winner on Click Bank or any other affiliate network. Often times the reality of how your offer performs on an affiliate network is quite the eye opening experience.
One sneaky trick is to send your own buyer list to an affiliate offer listed on a network just to drive up your gravity, and that works to give you a boost. But may not be sustainable over a long period of time.
What many health marketers will do is make joint venture partner deals on their own, on an individual basis. Sometimes paying commissions or even a flat fee per click or conversion or even an email swap in each others newsletters.
But, partnering with affiliate marketers and joint ventures, be they just pure affiliate plays like putting your health product on an affiliate network or a one-on-one partnership email swap with a fellow direct marketer in the online health and wellness space can be a dicey proposition if you’re not careful.
Because there’s a lot more to it than simply getting traffic to your offer if you want to be a player in the online health industry.
You’ve Got To Have Your Numbers Dialed In
The really attractive affiliate commission deals offer lifetime recurring revenue, and you’ll likely need to offer this or a very high percentage 90% or even 100% commissions if you’re unproven.
Which means…
You’ve really got to know your numbers.
How much is a customer really worth?
What’s your customer lifetime value? This should be in the $100+ range to really make it work.
And how long will it take on average to reach that total customer lifetime value? That is, what is the length of that lifetime for your business?
What’s the breakeven point and how long does it take to get there? The faster the better and the really big guys in this space are breaking-even on day one.
Knowing your numbers and what you need to make affiliate traffic work is required table stakes.
Without a good grasp of your numbers you could easily loose your shirt on a launch or promo. And I know many businesses that have.
It’s Expensive To Scale
Relying too much on affiliate marketing and joint ventures means that you’re really relying on someone else to grow their list. Relying on this so that you will have fresh blood to show your offers to next month is not a strategy for long term growth.
For one, the velocity and quality of their list growth is completely out of your hands so you can’t do anything to effect it.
Secondly, no two affiliates are equal.
Sure they have some level of relationship with their list. So the hope anyway, is that the traffic is a bit warmer than just buying ads across the web but the truth is that each affiliate list is totally different.
So the offer and sales copy you use on one won’t necessarily perform the same on another, making it difficult to scale. This really gives you only one shot with each affiliate send so you can’t really scale across sends, leaving you to go with a wider approach to your offer and sales copy.
Or tailor your sales copy directly to each affiliate, which usually just stops at the email send level and rarely makes it’s way to be congruent with the sales page or individual lists. In the cases where the email copy is congruent with the landing page copy, and it always should be in my opinion, it makes it tougher to scale and is a strategy usually only reserved for the big list swaps.
It’s Difficult To Scale
Eventually you’ll run out of partners to swap emails with, as there are a limited number of partners with decent list sizes and the market will continue to get crowded, meaning more competition for swaps with a limited number of open slots on the marketing calendar.
This means your revenue is capped at a certain point when you can no longer scale affiliate or joint venture traffic and you’ll need to ramp up additional traffic at some point to make up for the loss or stagnant growth over time.
Plus as other competing companies invade your niche, they will go after the same affiliate swaps that you are, making them even more attractive deals just to break in, driving your margins even lower.
Not to mention, that offers do go stale over time, and need refreshing because over time they will lose effectiveness. Therefore they constantly need new copy and new design treatments just to stay up to the average level of conversion.
The plus side of this is over time, you’ll have a lot more different variations or angles with which to promote your lander across other places, such as blog posts, advertorials, sister feeder sites, etc.
All of this makes it difficult, but not impossible to scale.
It Could Work For You If…
Affiliate and joint venture traffic can be great and they certainly have their place for the right stage of a business.
And it could work very profitably if you have your numbers dialed in.
And if you matched your creative to each individual traffic source, but…
Let’s not forget about promoting joint venture and affiliate offers to your list.
With the traditional swap, it’s a quid-pro-quo. They send your offer to their list and you send their offer to yours. This means that one, you’re sending your list an offer that could have been yours, where you have a larger margin on. And two, your list is getting more emails from you, making them less responsive over time because the need to constantly ask for more from them increases the more partnerships you do.
Third, your opt-out rates could increase, you could have a lower quality sender score or at the very least a negative effect on open and click through rates over time as offers become less relevant and or more frequent, where by teaching your audience to pay less and less attention to your emails over time. This will dramatically effect your business over both short term and long term.
One way around this is to just add affiliate offers in your up sell funnels, backend email sequence, if you don’t have enough targeted products or offers of your own, or on your thank you pages or thank you pages of partners.
Another way around this is to segment your list and only send affiliate offers to stubborn leads, non-buyers or lower life time value customers on your list. where by protecting your most valuable bread and butter customers.
The problem of course is that you really need a big list in order to segment and still make it with while for the partner you’re sending for and perhaps the even bigger problem might be that because the list segment is of lower quality, they may not buy your partners offer making it much less likely for them to want to swap sends in the future.
So What Do Health Marketers Need To Make It REALLY Work?
When it comes to joint venture partnerships and affiliates, while it may be the right move to jumpstart your health business with affiliates, especially if you’re just starting out, it’s not a good long term play.
Sure there are some advanced ways to use affiliate offers like adding their offer on your thank you pages to capture some low hanging revenue. Or segmenting your email list to siphon off the low value buyers, and send them only affiliate offers as a way to keep your list from getting pounded with too many offers that are not your direct products.
Using affiliates and joint venture partners as part of your marketing traffic strategy needs to be handled with a bit of care and an eye on the larger goals of your business.
Affiliate and JV traffic is often very expensive in terms of both the direct payout cost and sales impact on your business. If customers just bought from an affiliate offer a couple of days ago or even last week, what’s the likelihood they will buy your product today or this week? Probably not so good.
Affiliate and JV traffic is a crutch. To really make a health business work in todays market you need to scale traffic broadly from across multiple sources.
All the big players in the health industry are scaling paid cold traffic online.
Either from pay per click which is arguably a bit warm or true cold traffic from banner ads and email drops from list brokers, like true direct marketers.
In order to do this you really need to have a conversion and testing process and strategy down to a proven science because you’re not likely to hit it on the first try and will need to dial that in over time. But once you do, no one will be able to catch up with you.
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