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1. Affiliate Profit: Are you losing
money?

2. Dear Affiliate,

3. I have bad news for you: You are probably losing money
and you didn't pay attention to it! Let me explain...

4. When you joined affiliate programs you probably
considered the following factors:

5. - The commission

6. - The conversion rate

7. The profit formula looks like a child play: Commission x
Conversion Rate = Your Profit

8. In fact there are three big pitfalls here and if you don't
manage them properly, your profit is at risk. Let consider
them:

10. - Refund Rate: Refunds can kill your marketing efforts!
What are worth the sales you see in your account if
customers request their money back? A lot of sales mean
nothing unless you keep the money!

11. This is the whole responsibility of the merchant to keep
refunds as low as possible. A site that sells well is good. A
site that also keeps refunds very low is much better! There
is only one way to keep refunds very low: To deliver very
high quality services meeting customers' expectations or
going beyond what they could expect!

12. - Product Quality: Quality is king! Quality makes superior
conversion rates! Quality enables higher prices and better
commissions! Quality keeps refunds as low as possible! In
a word: Quality should be your compass. Don't associate
your business with low quality products or services. On
the top of your list, promote only the very best. It will also
keep your profit on top.

13. How much money are you losing today?

14. The money you earn and lose is significantly determined
by the quality of the affiliate program you have selected as
your top pick.

15. The question is: How do you measure what is more
qualitative and what is less?

16. There is an objective criterion to use for answering this
question and for optimizing your profit: The refund rate of
your top affiliate program!

17. A high refund rate express clearly that lots of customers
are not satisfied with what they get and that affiliates lose
money on their sales. On the contrary, a low refund rates
indicates a high level of satisfaction among customers and
safe earning for affiliates.

19. What are good, medium and poor refund rates?

20. Refunds can't be totally avoided. There will always be
customers that are not satisfied even for the most
qualitative product or service. So, expecting a zero refund
rate on the long run is not realistic. You should wish a
refund rate as low as possible in your industry. It's
important to consider that there can be significant
variations from one industry to another but as a rule of
thumb you can use the following scale:

21. 2% or less: Excellent

22. 3% - 5%: Good

23. 6% - 10%: Medium

24. 11% - 15%: Poor

25. 16% - 20%: Very Poor

26. 21% or higher: Run away!

27. With a 5% or less refund rate you can be happy. Your
affiliate program is reliable and your profit is secured.
With a 6%-10% refund rate, you should monitor closely
your merchant performance to ensure it doesn't get worst.
It would be advised to scan the market for a better
alternative if you can find one. With an 11%-20% (or
higher) refund rate you should be very concerned with
your profit. Whatever your industry is, you are bleeding
and there is probably a better affiliate program to
promote.

28. What is the refund rate of your top affiliate program?

29. There are two ways to find the refund rate of an affiliate
program:

30. 1) Look at the stats supplied by your affiliate program

31. Do your math as following: Refunds / Sales = Refund Rate

32. Let say you make 1000 sales per month, you get a $23.50
commission per sale and about 160 customers request
their money back every month. Your refund rate is 160 /
1000 = 16%. In that case it means that you should have
earned $23,500 for your sales but you will get only
$19,740 because of the refunds. You lost here 16% of your
profit or $3,760!

33. You can ask yourself: Is it only I or all affiliates for this
program get similar numbers? If you use Clickbank to
promote affiliate programs, you can get the big picture
about the whole community of affiliates that promote an
affiliate program.

34. 2) Using Clickbank payout stats to calculate the average
refund rate of an affiliate program

35. In its marketplace, Clickbank publishes payout stats for
affiliate programs. The $Earned/Sale factor gives us
exactly what we need to calculate the average refund rate
of a program.

36. The $Earned/Sale is the average net amount earned per
affiliate per referred sale. This number is mainly impacted
by refunds and it reveals the real commission earned by
affiliates. With this number, you can have an inner look at
the real performance of affiliates programs.

37. The average refund rate of an affiliate program is:

38. (Commission - $Earned)/Commission = Average Refund
Rate

39. What is the refund rate of popular affiliate programs at
Clickbank?

40. As an example, we have looked at three affiliate programs
selling paid surveys databases. We have found their
refund rates very high! You will be surprised at discovering
how much money affiliates can lose when promoting
these programs:

41. - SurveyScout: 16.2% refund rate!

42. - Survey Platinum: 20.9% refund rate!

43. - My Consumer Survey: 35.2% refund rate!

44. To get into the details, on November 29th 2005 figures
were as following:

45. SurveyScout

46. Affiliate Commission: $23.50

47. Average $Earned/Sale: $19.69

48. Refund Rate: (23.50 - 19.69) / 23.50 = 16.2%

49. Example: For 100 referred sales you should earn $2,350. In
fact you will get only $1,969 because 16 customers out of
100 have requested their money back!

50. Survey Platinum

51. Affiliate Commission: $23.50

52. Average $Earned/Sale: $18.58

53. Refund Rate: (23.50 - 18.58) / 23.50 = 20.9%

54. Example: For 100 referred sales you should earn $2,350. In
fact you will get only $1,858 because 21 customers out of
100 have requested their money back!

55. My Consumer Survey

56. Affiliate Commission: $40.84

57. Average $Earned/Sale: $26.43

58. Refund Rate: (40.84 - 26.43) / 40.84 = 35.2%

59. Example: For 100 referred sales you should earn $4,084. In
fact you will get only $2,643 because 35 customers out of
100 have requested their money back!

60. Remark: My Consumer Survey has a poorly designed site
and a high price for buyers. We estimate its conversion
rate to be significantly lower than other paid surveys
programs. Despite its high commission, affiliates will lose
the most money with this program.

61. We learn three lessons about these paid surveys affiliate
programs:

62. - A lot of customers are dissatisfied.

63. - Affiliates lose big money.

64. - The quality of these programs is very questionable.

65. What should you do to stop the bleeding?

66. You have no influence on the quality of the affiliate
programs you promote. Your only real influence is on the
quality of your recommendation!

67. Giving your top recommendation to a very professional
affiliate program that delivers the utmost quality services
to customers will keep your profit as high and as safe as
possible.

68. In the field of paid surveys and mystery shopping jobs, the
most professional program available today is
MaximumPaidSurveys.com.

69. Maximum Paid Surveys is a premium database of paid
surveys and mystery shopping jobs. It delivers a superior
value to both registered users and affiliate partners due to
its very high quality.

70. How to identify quality in affiliate programs?

71. Defining quality is a difficult job. In general, people can't
define clearly what quality is but they recognize it when
they see it. So what should you look at in affiliate
programs?

72. The most qualitative affiliate programs find the right
balance between the value they offer to customers and
the value they generate to affiliates:

74. - Rich content

75. - Good looking website

76. - State-of-the-art organization

77. - Friendly functionality

78. - Affordable Price for most visitors

79. - Detailed documentation

80. - Bonuses strengthening the main offer

81. - Timely Customer Support

83. - High conversion rate

84. - High commission

85. - Low refund rate

86. - Commission paid on time

87. - Good affiliate support

88. Please visit:
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056
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