New Affiliate Programme Launch

Hi everyone!

It has been shamefully empty here as I was very busy being involved with a few affiliate marketing and acquisition projects.

I am still very much involved in affiliate marketing and wider acquisition and would like to share a very top-level approach how to tackle the project of creating an affiliate programme from the scratch.

As an example we take a competitor of airbnb.com - a peer to peer holiday rentals, where you can rent out your room/flat or house to somebody for a day, week or more and all the negotiations, approvals and transactions are being carried over peer to peer as well (so to speak Customer to Customer C2C model).
The business model is quite simple with the Site taking 6-12% of guest fee paid through the site.

So having set media buying, SEM and other performance marketing (acquisition) models it is time to set Affiliate Marketing Programme. Here we go.

Current situation
- No affiliate marketing as such
- Competition: direct competitor offers 40% revenue share (cost per sale) on guest fees (which are 6-12% from the booked property cost)
- a need for Research: we need to understand wider competitor landscape, who are existing travel/property affiliates and current state of affairs on the promotions/deals and needs of those affiliates (determining the capacity of the affiliate channel would also mean we understand if this project is actually feasible from the commercial standpoint - weather our total costs are not higher than the expected revenue from the affiliate channel).

Objectives
1. Quite obviously: successful setup, launch and operation of Affiliate Programme to attract new guests
2. Profitability: ensure minimal risk, increased stability and business sustainability from affiliate channel as opposed to more volatile SEM and Media channels.
3. Ensuring increased brand awareness and consistency.

Strategy
1. Defining business model - revenue share seems to be initially the best option, though research should show whether pay per qualified lead or purchase could be viable and even more attractive to increase profitability. Key consideration that needs to be simulated according to various commission plans and scenarios, backed by the research.
2. Defining key selling points for the programme (using product's key selling points).
3. Decision about the platform - own, outsourced, no exclusivity via affiliate networks.
4. Decision about affiliate management - own or outsourced.
5. Marketing Communication / Promotion strategy for affiliates - set of tools available and technical/creative implementation.
6. Define KPIs for the launch and implementation: new customers (guests), revenue per customer, total revenues.

Plan and timelines
Plan would vary depending on the strategic choices that are stated above.
Plan would also include specific initiatives on:
- affiliates recruitment
- affiliate activation and optimisation
- marketing communication campaigns management, including tools and creatives
- introducing acquisition promotions
- analysis of commission plans and its development.

Control and Measurement
Weekly/monthly measurement according to set KPIs. Maintaining strong control over Terms and Conditions to prevent from fraud, illegal promotion methods and other legal issues. Re-evaluation of performance and modifications to the plan.

I will stop right here, because further assumptions without doing a proper research would not do me any favours.

What do you think?