From what I can recollect MDS Battery is merchant ID 1 on Affiliate Future and first began in the world of Affiliate Marketing back in 2001. Although there weren’t by any stretch of the imagination the first merchant in the industry, I’m sure their MD Mike Field has some views that many of the more recent merchants may find interesting.(*)
1) Back in 2001 what made you take the bold step and start an affiliate programme and why Affiliate Future when there were some more established players in the market such as DGM and Commission Junction?
IBG were developing our eCommerce website and decided that it would be a good idea to test their affiliate tracking solution and so set it up for us – we just went along with it as we thought it would be interesting to see how it turned out. There wasn’t a conscious decision to look at affiliate marketing as method to increase our sales back then – we just fell into it.
2) Over the past 8 years or so you must have seen a huge change in the industry, not least the nature of affiliates. How have those changes affected you?
We’ve seen a huge number of changes in the industry not least the greater number of professional organisations that have affiliate marketing as their major revenue generating method.
Previously we would see a number of niche sites just adding the odd link in to our site. Today we’ve seen a substantial growth in generalist sites that don’t cover any niche in particular, just shopping or offers in general.
3) I would have thought that you’d have hundreds of affiliates climbing over themselves to promote you guys seeing as you’ve got a great number of high-value products that can’t be bought in the high street and with the model numbers it should be really easy for affiliates to PPC them. What is the nature of your affiliate base? Is it highly geared towards PPC or SEO?
The affiliate base is actually very reflective of the UK marketplace, with an even spread of affiliates in the PPC, reward and voucher code sectors accounting for the majority of sales. It would be fair to say that there is great potential as you say in PPC as there are lots of very specific searches. Similarly customers searching for the MDS brand will naturally gravitate towards reward sites if they are members. As MDS believes in providing the best prices it does not issue voucher codes, however the ranking of certain voucher code affiliates in natural listings accounts for their sales. There is a wider and untapped opportunity with content driven affiliates that will be the focus of the coming months.
We do have a very substantial PPC affiliate base as it would appear to be much easier for them to find keywords from our website or glean them from our product feed. I would put this down to the fact many professional affiliates wouldn’t have websites targeting our niche.
Furthermore, there are relatively few battery merchants compared to gifts or more traditional electronic products so some affiliates would not consider it worthwhile to targeting our niche – even though you’re right in saying we stock a good number of high value batteries.
4) I recommended that Existem AM took over the management of your affiliate programme after I spotted and valued the “abuse” of brand-bidding. Is that something you’re looking to continue?
We’re still in early days of our new more professional approach and we’re keen to have a better understanding of what affiliate marketing adds to our bottom line and the benefits of leveraging the knowledge and experience that using an agency offers.
We’ve never had our campaign professionally managed so are looking forward to seeing what Existem can offer us.
5) Many affiliates just don’t understand (sorry) how affiliate marketing fits into an overall internet marketing strategy (this is just my view as a very basic rule of thumb), let alone a complete strategy. How steep has the learning curve been for you with working with affiliates?
The main issue is that we have to work together. I feel that often other retailers use affiliate marketing because their competitors are using it, without actually understanding the pro’s and con’s. I see affiliate marketing as filling the gaps or niches that we can not fill as well as giving us greater exposure and sales in the more generic areas where we just could not hope to cover ourselves. There’s so much demand for batteries and there’s a lot of knowledge that affiliates have that allows us to mutually benefit from that fact.
One thing it took us a bit of time to realise is the exact nature of how affiliates promote us and which product ranges they advertise. Obviously they gravitate to the higher value products and we need to make sure that we still cover the lower unit price but higher sales volume products ourselves with SEO.
6) What have been the biggest mistakes you’ve made with your affiliate programme and how have you rectified them?
Basically not to manage the programme for the past 5 years. It’s a definite mistake. Affiliates can offer you so much when you work with them – that’s something that we’ve neglected. At first Lee [Ed: that's me] made us aware that of a few issues that we had with the programme whilst he worked on other areas and recommended that we hired Existem AM to get to grips with the programme and sort it out by ensuring that our affiliates got all the information and tools that they needed. We’ve rectified the situation by taking on professional help and making sure we’re aware of our targets and that the programme is heading in the right direction.
Not managing it properly for the past 5 years. This is rectified by myself and Existem AM.
7) You’ve now launched your affiliate programme with Webgains. What was the impetuous for that decision and how do you feel it will enhance your customer acquisition strategy?
Basically when we took on Existem AM we thought it would be a good idea for a clean break, to start again and push forward with a new mindset. We’ll be looking to grow the programme rapidly and feel that we are able to really do this with a fresh start as we’ll be forced to re-evaluate every aspect of our programme without falling to the trap of taking the easy route of letting things stand as they are.
We’ve also made massive strides in the last 6 months / year to improve our conversion rates by constantly improving the shopping cart and user experience. So combined with that new start with the other forms of online marketing, we thought it’d be beneficial to continue that through our entire marketing efforts.
With the range of batteries you offer being so diverse and with the knowledge that you are incredibly popular for motorcycle batteries, do you feel that a future strategy to increase your affiliate base is to look for more generic affiliates that know how to drive volume, or to look for niche affiliates that have the ability to productively target specific niche audiences?
Both really. I’m interested in niche markets as we have a real passion for batteries and how people use them and it would be nice to increase our exposure on motorcycle websites, computing sites and the such like. However, I’m realistic and understand the fantastic volumes that the generalist sites can offer, hopefully some of those sites will choose to give us more exposure as we’ll be offering them more communication and the site does convert exceptionally well.
9) Personally I know affiliate incentives can work really well. But I also know that it’s very easy for them to fall flat on their face if you can’t get the coverage. Do you have any planned?
Affiliate incentives are tricky things to administer to ensure that they achieve sufficient exposure. However they do provide a benefit to affiliate recruitment levels and ongoing sales. Given that the MDS product range includes items that would be dear to an affiliate’s heart such as Laptop batteries, I would envisage that we will run an incentive at some point in the not too distant future.
10) Its all doom and gloom at the moment. But how is business?
Business is booming here. When people get into financial issues they don’t buy new products they just try and “mend” them with a new battery or chargers. For instance, new motorcycle purchases are down 17% on the year. We’ve got a good selection of motorcycle batteries and chargers and they’ve been flying out of the door recently. The same can be said for our large selection of laptop chargers and accessories – they’re doing really well at the moment. Also we’ve been selling quite a few digital camera batteries as people just aren’t buying new cameras and instead just looking to spend much less on a new battery.
11) If you could give one tip to retailers launching an affiliate programme for the first time, what would it be?
Get someone to manage it that knows what they’re doing.