How Crucial Technology Raised Affiliate Sales 27%

CHALLENGE
Back in 1999, Crucial Technology faced a dilemma. A
division of Micron, they were the only supplier of factory-direct
memory upgrades to end users. This means they had a lot of
websites knocking on their door offering to promote their
products to consumers.

While many of these sites had the right demographics, they did not
satisfy the company's media buying criteria in terms of size or
other factors. To make use of this untapped marketing
potential and reach, Crucial launched a pay-per-sale affiliate
program, and soon after hired Jared Williams to manage it.

He says, "There's a huge customer service element to running an
affiliate program. That's when Crucial decided to go ahead and
make the leap, and get me in there full-time."

His goal was to turn the program into a significant sales
channel.

CAMPAIGN
Williams focused on two ways of increasing affiliate
performance:

Tactic #1: Providing a wider range of creative

Crucial uses Commission Junction (CJ), a web-based advertising
network that deals only with pay-for-performance, to handle the
program.

Affiliates log into their account, view a collection of linking
methods and creative promoting Crucial, choose those they want to
use, then copy and paste the relevant HTML (which includes
appropriate tracking codes) into their site or email campaigns.

Williams offers affiliates the use of as wide a range of linking
formats and creative as possible, so they can choose the ones
best suited to their site, marketing approach and audience.
(Link to samples below.)

The emphasis, though, is on text-only links, which fall into
three categories:

a. Just the company name: Crucial.com

b. Advertisement-type text links: Short text advertisements,
such as a sentence extolling the benefits of a memory
upgrade.

c. Top-selling product name text links: e.g. "128MB PC100".
Each link leads to that product's specific purchase page.

Aside from links, Williams also offers affiliates a range of more
"traditional" banner creative; banners, buttons and skyscrapers
in various sizes.

Williams continually updates this creative. As soon as the
product bestseller list changes at the site, for example, he
modifies the affiliate link collection to reflect it.

He also updates banners to feature the latest prices (computer
memory is a commodity market, so prices can change quite often).
Since affiliate websites call banner images from CJ's servers,
Williams changes a single image file and sees that creative
updated across all publisher websites.

"If I didn't do this, I'd probably get about 10 phone calls on
the first day they weren't updated. The affiliates earning a
consistent income stream from the program are always on top of
the changes that I push out."


Tactic #2: Building closer relationships with affiliates.

Williams targets both a general improvement in the merchant-
affiliate relationship, and closer relationships with his top-
performing partners.

While a lot of other merchants have people running their
affiliate program as an adjunct to their main job, Williams is
100% devoted to managing performance marketing partners. He
spends a third of his day on the phone to affiliates and much of
the rest dealing with affiliate email.

"I give out my personal email to the whole affiliate base. I
don't hide behind any generic email address, so I spend a lot of
time working one-on-one with both our highest-performing
publishers and the little guys."

He also sends out a regular newsletter for affiliates (link to
sample below), typically containing:
o News of new products or promotions
o Examples of appropriate creative for promoting the above,
with direct links to the relevant HTML
o Current pricing and lists of top-selling products
o Links to Crucial-produced content that affiliates can use on
their sites.

In the absence of direct competition, Williams worries less about
top affiliates drifting away to other merchants and more about
helping them grow their sales.

He offers top performers incentive payments to reward them for
sales improvements, with targets and rewards designed on a case-
by-case basis.

When an affiliate asks to be bumped to a higher commission
structure, Williams first examines their past performance record.
Then he and other members of the Crucial marketing team consider
the affiliate's potential, based on an examination of their
website(s), their target audience and any metrics they can
provide.

If they show sufficient promise, they'll be offered cash
incentives. "I evaluate their past performance, set goals for
them, and offer cash in exchange for reaching those goals."

RESULTS
Since June '01, affiliate-driven orders have risen
27% at Crucial's US site. Williams says, "The affiliate
program brings in a great deal of revenue - we bill it as a
multi-million dollar program. It's grown into a really
viable sales channel for us."

The program has attracted around 12,000 affiliates. Of those,
Williams considers roughly 5000 to be active participants
in the program, producing at least one clickthrough a month.

"The average top performing affiliate is making over $3000
[in commissions] a month with our program alone."

Williams puts Crucial's ability to attract top-performers
down to the relatively high commission rate for computer
hardware sales (the base rate is 7%), the ability of
creative and Crucial's site to attract and convert visitors,
and his communication efforts.

"One of the things that sets us apart is our ability to work
one on one with affiliates. There's a person who can be
contacted at any time. When they get an email response
from me, they can't believe that someone's actually contacting
them. That kind of personal attention goes a long way."

More results:

1. Surprisingly over the history of the program, the best
performing creative is simply the hotlinked word "crucial.com."

Why? Williams says that many of the successful affiliates
write up a short pre-sell piece on memory upgrades and then
include the simple link as part of that. The use of the
Crucial.com domain also exploits the advertising and branding
work done by the Company.

"We do a lot of other types of advertising media; print,
radio, television etc. That serves to build up our brand
name. Affiliates can play off of that effort by using the
Crucial.com text link - and it's proven that you get sales
by doing so."

2. Text links in general outperform image links (banners
etc.) by 5:1, based on CTR and sales data. Williams gauges
the performance ratio within the text links as 5:4:2 for
Crucial.com / advertising text / product text.

According to CJ Open Marketplace data, each click generated
through the simple "crucial.com" affiliate link is producing
an average of around $4.5 in sales (as measured over a recent
three month period). The equivalent figure for the program
as a whole is about $2.86.

The resultant equivalent payout rate per click to affiliates
places the Crucial program in the top 10% of the 1200+
merchants using CJ, which helps attract more and larger
affiliate partners.

Next: Williams is developing an info hub to provide
affiliates with current articles and copy they can use on
their sites. This would support those affiliates building
mini-niche sites around Crucial's program or specific memory
products.

"They don't have ten hours to spend on our website to
educate themselves about memory, so they just need some
simple text copy they can use to build their pages, and
promote us and our products."

Samples of Crucial's banners, buttons, links & newsletter:
http://www.marketingsherpa.com/crucial/ad.html