Sunday, July 1, 2007

Phone Card Affiliate Programs

Over the past few years we have worked with several different phone card and telecom related affiliate programs. Many will pay affiliates a one time commission on a customer's first purchase or re-occurring commissions on sales through a link from the affiliates own website. However, in either case, a customer will likely return directly to the phone card merchant's website to make subsequent purchases and by-pass the affiliates website and the affiliate will not earn a commission. In other words, the affiliate will find customers for the phone card merchant and earn a small one-time commission. A very cheap method for phone card merchants to build a customer base while getting free advertising. A very poor deal for affiliates who spend money on advertising.

The phone card business is low margin and the only way to earn a significant income is by selling a lot of cards through re-occurring sales to a large customer base. The cost of gaining customers is high and affiliates will generally lose money if they only get commissions on first or one-time sales. For this reason, phone card affiliate programs with this type of commission structure should be avoided.

The first thing to look for when evaluating a phone card affiliate program is the ability to earn re-occurring commissions. If a program does not offer a means of earning re-occurring commissions than it should not be considered. Top quality phone card affiliate programs will require customers to register an account and the affiliate that introduced the customer will earn commissions on re-occurring sales made through that account forever, period. It should not matter how a customer arrives at the phone card merchant's website.

The second thing to look for is a product that sells well. The best products are those that are relatively easy to sell the first time and customers continue to use so there are a lot of repeat sales and re-occurring commissions. We have sold phone cards in the past that sell well the first time but customers rarely repurchase. We usually drop these products after test marketing them for a few months. This pattern suggests the product is low cost but also poor quality. Phone card customers tend to be price sensitive but they are also quality sensitive. We find that most customers are looking for what we call value which we define as good quality at a fair price. We also find that many phone card customers are loyal so, if they find a product they like, they tend to make repeat purchases rather than risk buying something new.

Successful companies will treat affiliates like business partners by offering promotions to help their affiliates build their customer base. This is a win-win situation for both the phone card merchant and the affiliate.

We think there are two phone card affiliate programs that stand-out from the rest. These are Tel3Advantage and the pushline. Both of these programs treat affiliates as business partners. They do this by offering frequent promotions and by rewarding affiliates for building a large customer base by paying relatively high commissions on re-occurring sales. They are forward looking companies who understand that their success depends on the success of their affiliates. That is what affiliate marketing is all about.

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