Affiliate Marketing • 36 min read
There are a variety of methods you can use when striving to reach maximum efficiency in the direct mailing market. As an affiliate manager, it is up to you to find and implement the best strategies within your company to achieve the highest revenue. Here we provide a detailed guide to help you understand the different methods to improve efficiency.
What Is A List Rental?
A list rental involves renting an email list from a list owner or broker. This enables you to reach a bigger audience and raises the likelihood that leads will result in sales.
When you decide to rent a list, here are best practices to follow:
- Ask for performance & non-performance analysis of their lists, such as price, list size, the average open rate of the list per 30 day period, and average click-through rate (CTR).
- Similarly, you’ll want the same information for the offer you’d like to promote with your rented list.
- Run the numbers twice against your stats & conversion rates.
- Negotiate reasonably before renting the list.
Pre-Paid Mail Drops (Email)
Most affiliate traffic is sent through email. However, a great way to double-down on the amount of traffic and visibility you gain from other affiliates each month is by using pre-paid mail drops.
There are quite a few ways to bridge this gap. Say you have an affiliate who mails for you once a month with great traffic, but you want them to send more frequently. You can discuss having them give you paid placements so they will open their calendar a bit, and you have more consistent traffic in their mailings.
In addition, there are other ways you can do paid email traffic, with a variety of brokers out there who rent email placement lists that are not from the affiliate space. The beauty of rental lists is that a lot of different customers are subscribed to a variety of different email lists, and they see when offers are going out to a variety of places. So, let’s say you are doing some paid media, and you are doing 15 rentals a month plus your own affiliate traffic. You’re going to get much more exposure from these lists, including customers who may have never seen or heard of you before. They will see your offer running on different venues and think, “They must have a really good offer since it is everywhere.”
To really boost your ability to drive consistent sales month over month, consider pre-paid mail drops, not just from an affiliate perspective, but so you can build consistent traffic.
Paid Media (Email) Terminology for Non-Performance Based
To help you ease into paid media, it helps to understand common terms used for non-performance based email:
File Size: How large is the email list being rented? In non-performance-based media buys, you will commonly pay BEFORE the email has deployed. You can usually negotiate when or how much you pay for your media buy.
CPM: Cost per 1,000 impressions on emails sent
Example: $12 CPM with File size = 200,000
Cost = 200,000 names / 1,000 impressions = 200 → 200 x $12 = $2,400.
Flat Rate: Cost to rent an email list at a fixed rate
Example: $3,000 to run the list of 100,000 names.
Paid Media (Email) Terminology for Performance Based
In performance-based media buys, you will commonly pay AFTER the email has deployed. As a result, you won’t know how much to bill until the maildrop has occurred. They would also most likely need access to your systems to bill you properly with these performances. Once you feel comfortable with these systems, you can start pre-paying, which is a great way to guarantee traffic each month.
You’ll also want to get used to common terms to make sure you understand how to bill:
CPC: Cost per Click
Example: $2 CPC
Cost = 3,000 clicks x $2 CPC = $6,000
You will pay AFTER the email has deployed and pay based on the clicks sent.
CPL: Cost per lead
Example: $4 CPL
Cost = 2,500 leads sent x $4 = $10,000
You will pay AFTER the email has deployed and pay based on the leads sent.
Media buys are a great way to get consistent traffic, especially since affiliate traffic can have unreliable tendencies. One month a partner will work wonderfully with you, and then the next, they ghost you, so media buys are the best way to establish consistent traffic for your affiliate business. However, when you start thinking about renting an email list, you must start crunching your numbers in advance to know whether you can afford the rental costs. This is especially important if this is your first time testing out media buys.
1. When considering renting a list, ask for the following:
- Price they are asking
- The size of their list
- Average open rate to the list over the last 30 days
- Average click-through rate to the list over the last 30 days
It is essential to ask these questions because without this information, you will not know the quality of the list you are going to rent. Also, just because someone has a 500,000 list does not mean that their open rate or click-through rate matches the size. Be sure to get all this information so you can decide which list is worth your investment.
2. Also, make sure to have your performance stats for the offer you’d like to promote, which should include the following:
- Average open rate for your top-performing email swipe
- Average click-through rate for your top-performing email swipe
- Average conversion rate for the offer
To get the most out of the media buy, you also need to know your numbers so you can compare them with the rental lists to further your knowledge to determine whether it is a good investment.
3. Once you have the above information, run the numbers TWICE:
- First with THEIR stats and YOUR conversion rate.
- Second with YOUR stats and THEIR conversion rate.
4. Once you have both data sets, then you can have a range. If your offer performs based on their average stats, you can presume you would make X and if your offer performs based on your average stats you can presume you would make Y. Ideally, you would fall somewhere in the middle.
5. Go in at the rate they want and negotiate down as needed, and confidently explain your reasoning. If things look great, you can still negotiate down, especially if this is a first-time media buy.
6. Things to consider for a first-time list rental (these options may not be presented to you, but are worth asking about, start high and work your way down).
- One-time discount to test (anywhere between 30-50% off is what we recommend)
- Half list media buy to test versus a full send, as this allows you to test the waters at half the cost
- Running to just the 60 or 90-day actives
Examples of stats:
|List Rental Stats||Your Stats|
|Price $3,000||AOR 13%|
|List Size 110,000||Avg CTR 14%|
|AOR 8%||Avg CR 2%|
|Avg CTR 10%||AOV $75.45|
There is a four-step process to help figure out the projections from both sides, which is found below.
List Rental Projection 1 (Their Stats)
Step 1- Finds opens using OR=8%
· 110,000 emails sent x 0.08 open rate = 8,800 opens
Step 2 – Find clicks using CTR=10%
· 8,800 opens x 0.10 CTR = 880 clicks
Step 3 – Find conversion using CVR=2%
· 880 clicks x 0.02 CVR = 17 conversions
Step 4 – Find revenue generated using AOV =$75.45
· 17 conversions x $75.45 AOV = $1,282.65
List Rental Projection 2 (Your Stats)
Step 1 – Find opens using OR=13%
· 110,000 emails sent x 0.13 open rate = 14,300 opens
Step 2 -Find clicks using CTR=14%
· 14,300 opens x 0.14 CTR = 2,002 clicks
Step 3 – Find conversions using CVR=2%
· 2,002 clicks x 0.02 CVR = 40 conversions
Step 4 – Find revenue generated using AOV=$75.45
· 40 conversions x $75.45 AOV = $3,018.00
Range of Revenue Generated
Minimum Earning Projection – – $1,282.65
Maximum Earning Projection – – $3,018.00
Cost to rent the list – $3,000
%BE – $1,282.65 revenue / $3,000.00 cost = 42.7% BE
%BE – $3,018.00 revenue / $3,000.00 cost = 100.6%
In this scenario, where there is a dramatic difference between the two possible outcomes, we would recommend that you communicate with them and show them your stats. This is where the negotiating would begin so that you remove all possible risks to your investment. In this situation, you could ask them to meet you in the middle and lower the cost of rent to $2,000. Regardless, you may still have some loss with this deal, but you are still gathering some new names, which could lead to high-generated revenue in the future.
Most people that you will do business with will appreciate your transparency, but not in situations where you end up making the maximum amount after the negotiation. If you go to them afterward delighted that you made a lot of money and you want to buy more lists from them, they may end up:
- Being upset that you made all that money after they lowered their rate.
- They could jack up the prices for your next deal with them.
Transparency is needed in the negotiation process, but don’t go around waving around all the money you made because it could end up costing you more in the future.
Bulldog Approach in Negotiating
There are many ways to go about negotiating offers, and we recommend what we call the “what the Hell offer.” Leading with transparency is not always the best move, and this is done when the broker is a real stickler and will not budge from their flat rate. The Bulldog approach works particularly well if it is the first time you are renting from the broker. You should go in asking for a flat rate of $1,800 instead of the $3,000 since you have never worked with them before. Additionally, if all goes well, the next negotiation will start around their original flat rate. If this does not work, you can always meet in the middle as needed to satisfy both sides.
Another method you can use is bulk buys which we only recommend if you have already tested a list first. You can start by going in with a 6-month deal and add in clauses for safety:
- Pre-Pay 50% upfront
- 50% 3 months in (based on results)
- Out clause – – If a list stops performing, you can relocate to another list
- If stuff looks terrible, you are not obligated to pay the second 50%. You can negotiate down and re-adjust as needed.
Bulk buys are great to get a better rate off a list you already know and trust and will provide more consistent traffic. It is always important to remember that you hold all the power: the rental owners need you far more than you need them. They offer you a boost in traffic and revenue, but without them, you would not flounder.
Many people possess a flaw when understanding their breakeven because they look at them on an individual basis. We recommend analyzing your breakeven bi-monthly (mid-month, end of month, and then ultimately end of month as a whole) to understand how your breakeven looks. If the entire month is hitting your goal, you can have some case-by-case placements fall below. Just make sure to keep a steady eye on the percentage.
Third-Party Email Tracking
It is important to know that the earnings per mailing (EPM) is going to decide whether a third-party is good or not. It is essential to make sure the numbers add up throughout; otherwise, you will not earn the money you expected. As a rule of thumb, $1 or more is where your earnings per click (EPC) should land, but this still does not guarantee that you will perform well with this rule.
Here is some advice when reading your numbers for current offers or potential ones:
- Your click-through rate is important when figuring out your compensation plan.
- Your earnings per mailing is the most important factor but requires a deep knowledge of knowing your expectations.
- Your earnings per click is sometimes deceiving, the same EPC with very different open and CTR’s can change your EPM amount.
You will never know how well a mailing will do if you do not gather the information from the party to help calculate the success of a mailing. So, make sure you are communicating with your third-party mailing to help establish an easy tracking system. We’ve come up with a spreadsheet that can help track your third-party mailing in a way that is efficient and gathers all your information simply.
When you join the Traffic Tribe lesson on third-party email tracking, we will guide you on what is important and what you should track when sending third-party emails. Our lessons on pre-paid email drops also contain a detailed guide and spreadsheet on how to calculate your potential rental lists. By joining the Traffic Tribe, you will gain a thorough understanding of how to maximize your efficiency regarding the direct mailing market.
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