What does it take to manage a successful affiliate marketing program? Thousands of affiliate sales partners? A big brand name? The highest commission rates in your category? 

Although each of these elements can certainly have a positive effect on your program, the ultimate success of an affiliate marketing program is based on the concrete development of foundational elements. A solid foundation builds the relationships that drive results.

A successful affiliate marketing program must cover the following five elements:

1. Affiliate Approach
2. Affiliate Experience
3. Program Offer
4. Link Inventory
5. Affiliate Marketing Tools

Affiliate Approach

How you approach your affiliate marketing program is the single most important of the five elements. Your approach directly effects how you treat your affiliates, and establishes the strength of your program’s foundation. 

First, recognize that affiliates are your sales partners, and not advertising partners. They are compensated for selling your products and/or services and for generating leads. The affiliate marketing program is a sales channel, not a marketing or advertising channel as many mistakenly believe – so treat affiliates as salespeople.

Merchants too often view affiliate marketing as a way to get "cheap advertising," and in turn treat their affiliates like advertisers. What does this mean? It means that these merchants use the channel solely as a means to increase traffic and brand awareness. A program managed as a sales channel values the affiliate as a sales partner, rewards affiliates' efforts to drive sales, and focuses on ways to help affiliates sell more. Increased traffic and brand awareness is an ancillary benefit, not the focus. 

The goal for the advertiser is to pay as little as possible, pay as late as possible, and manage creative. If you recognize that your affiliate sales partners are salespeople, your goals switch to adequate compensation, timely and consistent payment, and training to become successful salespeople.

Advertising-focused merchants also tend believe that once a customer has transacted on their site, the customer now "belongs" to them. Consequently, merchants believe they shouldn't have to pay commissions on sales from repeat customers. Sound familiar? 

Consider this – you go to J. Crew in the local shopping mall to buy a sweater. While you are there, you visit The Gap and buy a pair of jeans. You've purchased from The Gap before, but did The Gap pay anything to get your sale? The Gap pays rent for their location in the shopping mall. If The Gap were not in that mall, you would likely not have purchased that pair of jeans.

You did not go directly to The Gap, just as consumers may not always go directly to your site to make a purchase for the sole reason that they've shopped there before. Affiliate sales partners essentially help set up links to your store all over the Web, increasing your reach and distribution to both existing and new customers. 

The cost per order through an affiliate marketing program is significantly lower than any other method of advertising, and typically comes second in cost only to e-mailing an in-house customer list. Affiliate marketing is cost-effective because you only pay when a specific action occurs. Just make sure that this action is achievable, and compensate your affiliates for the action.

Remember, how you approach affiliate marketing will significantly impact the success of your program.  Top affiliates can immediately discern your attitude towards your program, and are quick to move on to other programs if you do not demonstrate that you value them as sales partners. 

A June 2002 report by Jupiter Research stated:

Such revenue (from affiliate programs) can approach 30 percent of all online sales; but reaching the level of success is dependent upon a marketer’s willingness to work with its affiliate partners to provide whatever sales tools are needed – which increasingly have less to do with advertising as it is traditionally known. 

Affiliates are an online sales force, and merchants must manage their partners as they would a physical sales force by providing training, incentives and tools to motivate and educate them to drive revenue.