When you think about it affiliate programs have inherent trust issues. We send traffic and trust the program to report the sales. They could just quietly pocket a percentage of your sales commissions without telling you about the sales and you’d really never know. I think people understand that and so they have more trust for affiliate programs that are run by payment processors because the payment processor is an independent third party who they think is making sure they get paid their commissions.
I’m going to tell a story and leave out the names of those involved, though it will be evident which payment processor I’m talking about. This really isn’t about the particular parties involved so much as a general problem I’m seeing which I’d like to know people’s thoughts on. Can we have a general discussion without mentioning names? Please?
So the story… You know how most affiliate programs have a clause in there saying you can’t refer friends and family? Well, I think I now understand why… It’s because you then know about a particular sale and can check up to see if they’ve cheated you out of a commission… Someone I know bought a membership after following a link with my affiliate codes in it. Then they told me they had bought the membership, but no sale was showing up in the reports. I contact both the site owner and the payment processor who manages the affiliate program and started getting a run around…
Customer service at the payment processor told me a different affiliate was credited with the sale. The site owner said “Just so you know, all commissions are handled entirely by [payment processor]. We have nothing to do with that.” He went on to say they’d been “using [payment processor] for over 8 years we have never had a payment issue.”
Naturally I follow up with payment processor’s customer service and ask how another affiliate’s code got on the sale and was told that it’s the first affiliate that sets the referral cookie that is credited with the sale, not the last. That makes no sense to me and I asked the following… “Think of it in brick and mortar terms… A person goes into a crappy store that doesn’t display their products properly. The product they want is there, but the way it’s marketed leaves them uncertain about buying it. They then go to a better store, see the same product, but this time it’s presented well and someone explains how the product works. The person is convinced and they buy the product. Now, in that scenario, why should the second store give the first store all of their profit on the sale? It just doesn’t make any sense…”
Things progress and I’m finally told that it’s one of my affiliate codes that’s on the sale, but there’s no sale showing under that code either. I should backup and say the site owner runs two sites, let’s call them Site A and Site B. The sale was for a combo membership that gives the person access to both sites. What happened is the person must have followed both links, but the actions that lead to the sale were they followed the link to Site A, and purchased a combo membership, and the affiliate code for Site B is what showed on the sale because they had earlier followed one of my links to Site B.
Long story short(er)… The problem boils down to the fact that the site owner set up semi-independent affiliate programs for each site. Let’s say Site A’s affiliate program code is 123456-0000 and Site B’s affiliate program code is 123456-0002. You have to sign up with both programs to sell both sites. What I just learned this morning is the combo sale registered under code 123456-3000, which does not have an affiliate program associated with it, and the programs are not set up with “account grouping”.
I don’t know who chose to set things up that way - whether it was the site owner or some rep or support person at the payment processor. But it appears the set up is such that, by either design or accident, it will cheat affiliates out of commissions on all combo sales. [It makes you wonder how much it would cost him to now pay affiliates all the commissions they weren’t paid on combo sales over the last 8 years!]
After nearly 30 e-mails back and forth on this issue, the most disturbing part by far is that the payment processor has never once apologized or agreed with me that I’m owed a commission. [The site owner did apologize early on.] IMHO, the big selling point for affiliates on payment processor run affiliate programs is that an independent third party will ensure you get your commissions, but they don’t seem to see that as their job. After many many e-mails and all sorts of people being cc’d it’s clear their client is the site owner and if the site owner purposefully or accidentally sets things up in a way that cheats the affiliate out of the commission, they’ll be happy to stand by the site owner.
IMHO, if an affiliate sends traffic that results in a sale, the affiliate should get a commission. Period.
For a while now I’ve wondered about the programs run by this payment processor. My overall conversion ratio for all other programs is 1:408 (uniques), but the average for programs run by the payment processor is 1:510 - about 25% worse. The best converting sites with affiliate programs run by that payment processor have ratios of 1:257 and 1:284. So I’m not saying there aren’t good affiliate programs run by that payment processor - only that it would seem too many of the sites seem to underperform…
One of the niches I do really well with is what I’d describe as “poz pigs who bareback” (not that they advertise that the guys are poz, but it’s obvious - the guys are older and often look poz). There are three sites in that niche that I’ve promoted. One has a conversion ratio of 1:136 (uniques) another a conversion ratio of 1:195, but the one that uses the payment processor’s affiliate program has a ratio of 1:853. To me that says it all… The site with the bad conversion ratio shouldn’t be selling that poorly.
So the question is what to do about all of this? How do you make sure you get paid the commissions you’ve earned? Do you just accept that you’ll never see a certain percentage of revenue? Was I just dumb in not realizing that multiple affiliate programs for related sites was a huge warning sign that there would be problems? How do you know if there’s “account grouping” in effect or not? (And why would the payment processor not mandate account grouping, or at least make it the default setting that needs an authorized over-ride?)
While it’s obvious who the payment processor is, I didn’t mention their name because I know they’re not the only payment processor who has “issues”. I’ve heard stories about other payment processors too. That’s why I really don’t want this to turn into a thread that bashes anyone in particular. It’s more about how an affiliate can deal with situations where trust may be violated and still run a viable business…
This all boils down to trust. I guess my biggest questions are why don’t affiliate programs take the issue of trust more seriously? And why do so many people trust people payment processor run affiliate programs when they can have such huge problems? And how do affiliates protect themselves and make sure they get paid?