What do you picture when you hear the word “negotiation?”
For some, it might be the interchange between a used car salesman and a potential buyer, trying to decide on a price mutually beneficial to both parties.
For others, the word may invoke the image of an email chain between a new apartment tenant and a Craigslist seller looking to offload their old corduroy couch.
But where exactly does the term “negotiation” apply to the world of affiliate marketing?
When is it applicable?
How do I negotiate within the affiliate space?
The answers to all these questions are, at best, somewhat nebulous. So I thought I’d do a bit of detective work and get some concrete answers from veterans of various industries in the affiliate world.
These veterans include:
- Media Partner – Darrell Allen, Capital Intellect (BeFrugal)
- Network – The Account Management Team, Avantlink
- Affiliate Agency – Chris Park, JEBCommerce
Without further ado, let’s dive into these burning questions as we begin our quest to understand the logistics of negotiations within the Affiliate Realm.
What have you seen as successful negotiation tactics in the past?
A successful negotiation is this: I have all the information I need right up front.
From the affiliate side of things, these questions were contrived from the viewpoint of optimization: this includes placements, exposure options, co-branded landing pages, etc.
I found one core tenet that resounded true across the board.
Preparation is key. If expectations and goals aren’t set up front, you could instead be setting yourself up for failure.
“Specifically outlining what the merchant goals are and what exposure the affiliate can offer to get the brand to reach those goals [is a successful tactic].” – Avantlink Team
“If I’m discussing a new placement with an affiliate we don’t have a lot of experience/history with, I like to try to discuss what type of a result we expect from the placement, and ask about a make-good up front in case we don’t see a good return on our investment.” – Chris Park
“A successful negotiation is this: I have all the information I need right up front.” – Darrell Allen
The same goes for deciding on a makegood – mapping out expectations and contingencies is also vital before pulling the trigger on any prospective opportunities.
“Once goals are outlined, optioning make-up placements if goals are not met.” – Avantlink Team
“It’s always much more difficult to get an affiliate to agree to a make-good after the fact, and it’s always best to get the promise of a make-good included in the I/O.” – Chris Park
In the high-speed tech world we live in, email has become a staple in our communication channels. But many times, confusion and ambiguity can be eliminated by simply hopping on a phone call.
Conversations involving affiliate negotiations are no exception.
“At times, negotiations via email take place a little too long when more of a personal touch gets the job much faster.” – Avantlink Team
“I wouldn’t use the word negotiation, I’d use the word communication. If you came to me and said I had $2k for Q4, and they expect an ROI of 7 to 1. I have everything I need. At that point we can…have a phone call.” – Darrell Allen
What in negotiation discussions do you see as a big red flag, or at least a minor annoyance?
A lack of information before entering negotiations can not only induce frustration, but also be a waste of time.
“I’m bothered when negotiating a placement with an affiliate, and they don’t really know much about my client. How can they recommend a placement, or know how well the placement will do for my client, if they don’t even know what sales via our partnership were last month?” – Chris Park
“Literally not getting good information from the get-go. You want me to guess? A red flag and the annoyance: getting bits of information that require lots of back and forth.” – Darrell Allen
The Avantlink Management Team offered a great list of some items that could also hamper the negotiation process:
- When a budget is not clear.
- When flat fee is due before the placement.
- When legal hurdles get in the way of placement negotiations.
- When parties are not responsive or slow to respond.
- When there are no outlined prices on rate cards.
What information do you find most helpful, or wish to know from the onset?
The more information that you can provide for the negotiation process, the better.
From the client’s perspective, receiving a clear-cut idea on what the opportunities are and how they work is paramount to a successful conversation.
“When negotiating placements for a client…I love it when a partner is specific regarding what will be included. “Homepage Placement”, “Newsletter Inclusion” and “Social Media Mention” don’t give me what I need. Where on the homepage or in the email? When? For how long? Is an offer and/or creative required? When an affiliate includes the details, I can present a detailed offer to the client, and get an answer that much quicker.” – Chris Park
From the media partner’s vantage point, knowing what the client is looking for and what they can offer is also crucial for the discussion to help ensure a successful partnership.
“What’s the [merchant’s] date range, and what’s the budget range? I do appreciate…understanding what the client wants. I would want to set them up for success.” – Darrell Allen
Lastly, garnering some sort of forecast or prediction is extremely helpful.
Avantlink noted that an “Expected ROAS of a Placement” is high on the list, as well as “Competitive analysis of placement or how similar brands have performed utilizing same tactics.”
In short, the more information that you can provide for the negotiation process, the better.
Many see optimization and negotiation as dull and mundane. What could be done to make these discussions more exciting?
Innovation within the affiliate space can be a great way to sprinkle a bit of pizzazz into an otherwise robotic conversation.
The Avantlink Management Team brought up a unique case involving a brand that set up their budget and expectations in Q1 with an affiliate partner, in addition to what the brand viewed as the guaranteed minimum exposure for the entire year.
“[The] brand who employed this tactic timed out all payments so that all placements for the entire year were fully paid to the affiliate by the end of Q3.” – Avantlink Team
Key partners within the affiliate space may also have unique opportunities you can take advantage of.
For instance, BeFrugal has a great system known as the Target Return Program, or “TRP,” in place. This allows for transparency between advertiser and media partner on goals, ROI, and budget.
“We will take the media budget, guarantee and ROI, and handle 100% of the details. We’re not on target to hit ROI? We’ll self-fund the cashback…to meet that ROI.” – Darrell Allen
Amid negotiation discussions, it can be easy to forget that affiliate marketing is very much contingent on relationships.
“Get to know the affiliates you’re working with. If you get to know your contact on a personal level, it makes the conversation a lot easier and more fun. (And they’re more willing to give you a deal!)” – Chris Park
What’s Your Favorite Ice Cream Flavor?
“Cherry cordial” – Darrell Allen
“Coconut Chocolate Chip from the Creamery at Penn State” – Chris Park
“Chocolate Chip Cookie Dough, Fish Food or Chocolate.” – Avantlink Team
Yes, you read that correctly. Fish food is indeed, a real ice cream flavor. (but it doesn’t sound half bad!)
What do you picture when you hear the word “negotiation?”
With all of these great responses, my hope is that you have a much better grasp on the concept of negotiation, and just how it applies to the world of affiliate marketing.
If you have any questions or experiences with negotiations you’d like to share, please send them our way! We’d love to hear your input.
I also want to take a moment to say thanks to all those who have contributed to this article, namely Darrell Allen, Chris Park, and The Avantlink Account Management Team. Without you, this post would not exist!