Here's a list of things to pay attention to, and to avoid, when developing an affiliate marketing program.

Affiliate marketing doesn't just happen. Here are the ten steps to take when implementing a program:

1. Think through the program

Affiliate Marketing (AM) can be a powerful addition to your company’s marketing arsenal. But you greatly reduce your odds of success if you shoot from the hip or fail to anticipate any of the key challenges. So do your thinking in detail before you launch the program.

2. Recruit the best affiliates

The success of your AM program depends on the results of your affiliates, who will generally fall into the common 80/20 pattern: 20 percent of your affiliates will generate 80 percent of your business. The more you do to find the best fitting, hardest working affiliates, the more you tilt the playing field in your favor.

3. Take care of your affiliates

Your affiliates are the engines that produce these sales, so it’s prudent to keep your affiliates happy, motivated and knowledgeable. Every investment in your affiliates will come back many times over in additional sales. While you can’t do their job for them, you can give them the tools and information they want and need to be successful. 

4. Pay a top-rated commission

If you’re stingy with commissions, you’ll attract lower-quality affiliates who will produce fewer sales. To get the best, pay what they’re worth to you.

5. Establish a second tier

Top affiliates are attracted by the potential for secondary income, over and above what they personally generate in sales. So structure your commissions to provide overrides on new affiliates that existing affiliates bring into the program.

6. Support your affiliates

The most successful AM programs utilize newsletters, informative Web sites and other kinds of community-building, sales-building communications that help the affiliates do their jobs. It’s also important that you respond quickly to feedback so your affiliates feel they can get their problems solved and their questions answered.

7. Monitor affiliate performance

Your AM program will produce a better bottom line if you’re tracking the results, and perhaps also the efforts, of each affiliate. This way, you’ll be able to see who is producing and who isn’t, and where you can make a change to increase the results of your affiliates.

8. Tweak your product line

AM works best when prospects can choose from a variety of products and services, allowing more people to find something they’re happy to buy from you. Look for opportunities to adjust, expand and proliferate your offerings to increase their appeal.

9. Make new customers part of the family

The most difficult task is getting someone to make the first contact with your company. So it’s generally fruitful to repeatedly contact prospects and customers drawn in through your affiliates. Over time, they will buy from you again and again.

10. Use viral marketing elements

AM feeds off the power of the Internet, which makes it a great environment for viral marketing elements: the emotional and psychological cues that encourage people to drive others to your site. A sales-generating system all its own, viral marketing can provide a natural synergy with your AM program.

Here are some things you shouldn't do:

1. Expect to get something for nothing

AM is a legitimate approach to prospecting for and closing sales that follows the same rules of business as every other sales channel. You must do it right, invest wisely and follow through responsibly if you want it to produce for you. There is no free lunch in this, or any other, method of doing business.

2. Offload too much responsibility to your network vendor

You’ll probably want to hire an outside vendor to handle most of the grunt-work involved in managing your network of affiliates. But these are primarily technical vendors, and cannot substitute for commitment and involvement from your company’s key managers.

3. Make the program a stepchild

You get out of AM what you put into it, so you’re making a mistake if you let it find its own way, piggy-backing on other sales efforts and making do without sufficient resources. Give your AM program a fair shot by allocating enough time and energy, and by providing every Web site and tool it may need.

4. Let problems fester

AM is a trial and error exercise, particularly in the first year. If you let things proceed too far in the wrong direction, you’ll have a hard time dragging the program onto the right track later on. Catch problems early and address them aggressively.

5. Commit only for the short term

AM is also a momentum business. If you expect quick results from a short-term commitment, you’re going to be disappointed. Give your program a year or longer to find its legs and begin delivering on its promise and potential.

6. Appear on Link Farm sites

There’s a significant quality aspect to successful AM, where more is not always better. Sites that offer nothing but dozens and dozens of links to merchants like you are unlikely to appeal to your best prospects or drive much business your way. Stay away from affiliates who do nothing but add your name to a long list of offerings.

7. Discourage your affiliates from being individuals

Involvement and commitment from the top should not translate into micromanagement or severe restrictions on your affiliates. Each successful affiliate will have his or her own way of attracting prospects. Don’t stifle their individuality, or you’ll limit your AM program’s results.

8. Let the program run on auto-pilot

AM programs require attention and guidance. They can’t thrive in an atmosphere of indifference. If you aren’t willing to provide an in-house manager, you’re severely handicapping your program from the outset.

9. Let costs get out of hand

There are lots of ways to throw money down the drain in AM. Be careful to avoid all of them! If you discard your normal business acumen when approving AM expenditures, you’re making it almost impossible for the program to generate a satisfactory return on investment.

10. Let the program stagnate

There’s a normal attrition rate among affiliates. If you don’t take steps to grow your AM program (at least enough to offset the steady loss of affiliates for reasons beyond your control), your program will wither and eventually die.

Related Features:

Affiliate Marketing 101
What is it, and what are the benefits and challenges for marketers?

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

Counting More than Cash
The success of an affiliate marketing program doesn't rest solely on profit.

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."