Perceived as a “free” way to build more sales, affiliate marketing actually requires a great deal of time, effort and resources.

On the surface, affiliate marketing is a neat, clean and easy way to increase sales by enlisting the help of multiple distribution outlets that already have access to a pool of your prospects, particularly ones with whom you may not be adequately communicating.

But there’s many a slip twist the raw notion of affiliate marketing and the practical reality of establishing and maintaining an effective program.

In brief, here are some of the obstacles and pitfalls you will face:

Identification

Who are the people who will be your best affiliates? What are their characteristics? Where can you find them?

It’s a sad fact of the affiliate marketing environment that some of the most eager affiliates bring the least to the table. You can easily find a great many people who will sign up for any and every affiliate marketing program, and who will then put in very little time or trouble to make a success of any of them. But as the marketer, you should not be interested in throwing a lot of this kind of meat at the walls and working with whatever sticks. Every affiliate you sign up is out there representing your product or service, and adding to or detracting from your reputation. One bad apple can ruin an entire bushel of prospects.

That’s why it’s important you identify the characteristics of successful affiliates early on, and restrict your affiliate marketing efforts to people who are most likely to succeed.

Recruiting

As you might expect, the affiliates most likely to succeed are not always the most eager to sign up with you. They may be working with other marketers (perhaps even direct competitors), and may be reluctant to switch or to take on additional responsibilities. Even if they’re looking to affiliate, they may not see the benefits of joining your program. You need a plan for convincing top-quality affiliates to sign on and stay with you.

Reward structure

One of the keys to signing and retaining the most successful affiliates is the reward structure you put in place. Whether you pay a 5 percent or 25 percent commission, whether you pay for impressions or only for sales, it’s important that your reward structure make it possible, even likely, for your affiliates to earn a significant income from their efforts on your behalf.

What’s more, most of your sales are likely to come from a small percentage of your affiliates -- certainly on the order of 10 or 20 percent, perhaps as few as only 2 or 3 percent. Thus, the most effective affiliate programs tend to skew rewards so these heavy hitters reap significantly more rewards than run-of-the-mill affiliates who don’t contribute nearly as much to your bottom line.

Referral mechanisms

Another key to a successful affiliate program is the mechanisms you put in place to bring new prospects into your sales system, and to track their entry points back to your marketing affiliates. You have the fundamental choice of paying for impressions, for leads or for sales. But whichever way you go, it’s vital that your tracking mechanism be accurate (so hard-working affiliates are rewarded for their efforts) and bullet-proof (so hackers and other criminals cannot hijack your system and put themselves in line for payments they haven’t earned). 

Some programs are extremely time limited, so an affiliate gets rewarded only if a prospect buys at the first opportunity. Others are relatively open-ended, so an affiliate earns money whenever a prospect buys, for example, any time within a year of first inquiring. Some programs even offer rewards for “second generation” sales, such as those produced by affiliates that a prior affiliate has recruited to your program.

Coaching

Despite what you may hear and read, most affiliates are far from savvy Web-masters who understand the nuances of either Internet technology or successful marketing. Because affiliates are often single-topic experts who know very little about the larger world of doing business or working the Web, an effective affiliate marketing program must convey a significant amount of marketing “how-to.” At a minimum, you’ll want to help your affiliates decide what kind and size of banner or advertisement to put on their site, as well as how best to integrate your offer into their existing content and appeal. You may also want to provide coaching on how to reach out to a broader audience, and how to build “stickiness” into a site so prospects stay longer and visit the site more often.

Support

There are also technological issues to be addressed. What will you offer your affiliates in the way of Web banners, buttons, links, advertisements, landing pages, shopping carts, and payment mechanisms. Each of these choices may have powerful implications for the Web sites of your affiliates. It’s a mistake to assume they will all know how to handle these technological issues in ways that work best for your offering. The more hand-holding you can provide, both in proactive information and quick responses to affiliate inquiries, the more likely it is that your affiliate marketing program will operate seamlessly the way you want it to.

Logistics

It sounds exciting to sign up thousands of enthusiastic affiliates and turn them loose on a world of prospects. But at a minimum, every one of those sign-ups involves matters of registration, training, support, performance tracking, two-way communications, accounting and payment. It’s important that you understand what you’re getting into before you begin your affiliate program, and that you make sure these items are planned, executed, and -- let’s face it, paid for -- by the cash and other benefits the program generates for you. Otherwise, you’re simply building a quagmire that will cause more headaches and turn off more prospects than you have imagined. 

Launch and sustain the program

Once you’ve got your program designed, tested, technologically implemented, and enthusiastically supported within the company, you’ll have to make a strong effort to make it widely known among people most likely to become effective marketing affiliates. This involves submitting your program to affiliate directories, developing a presence on discussion lists, getting mentioned in affiliate marketing newsletters, establishing co-marketing arrangements, networking with other affiliate marketers, establishing and supporting a community of your affiliates, attending relevant conferences, and more.

Often perceived as a “free” way to build more sales, to be done well affiliate marketing actually requires a great deal of time, effort and resources. But current Web activity shows that the benefits of an effective program can be extreme.

Robert Moskowitz is a consultant and author who speaks and writes frequently in the U.S. and abroad on such topics as white collar productivity, knowledge management, practical use of the Internet, telecommuting, caring for aging parents, and business applications of information technologies. He has authored several books, including "How To Organize Your Work and Your Life," and "Parenting Your Aging Parents," and teaches several "online courses."