Quality over Quantity: ValueCommerce cleans up its media channels

Last Thursday, ValueCommerce CEO and all around nice guy Brian Nelson talked about building a successful Internet Business in Japan at a luncheon sponsored by the ACCJ (American Chamber of Commerce Japan). Brian is no stranger to the struggles of building an Internet business. He was instrumental in making ValueCommerce into the leading affiliate marketing network in Japan as well as the lucrative tie up with Yahoo Japan and in taking the company public last summer. One point that stood out in my mind from the talk was Brian’s emphasis on quality that he believes helps make ValueCommerce stick out from among the crowd. This “Quality” point permeates the company’s practices, key among them is the quality of their media channel. Brian says that over 20% of partner applications get turned down because of the poor quality of their site. Being overly selective with your partner channels can be a bit of a gamble in a closed market like Japan. With over 50 affiliate networks and more on the way, many of these affiliate network providers compete for the same Media space and group of affiliates. By turning away 20% of affiliates, ValueCommerce is forced to work harder at attracting quality media sites in which to offer their advertisers. Quality over Quantity. This works to ValueCommerce’s benefit in two ways: It guarantees that merchants will see a better ROI on their media spend and it helps ValueCommerce stand out as a quality network at a time when most networks are more concerned with growth. It will be interesting to see how much longer it will be before other networks begin to tighten their affiliate acceptance rules and focus on improving their media channels. Quality over Quantity, not exactly a strange concept here in Japan.

Don’t Stiff Your Affiliates!

In a recent Affiliate Marketing Report  released by MarketingSherpa, affiliates were asked to rate factors in placing merchant offers/products on their site. The top factor of course was commission structure, yet availability of new products rated rather low in the results. I found this interesting considering how many times I’ve seem merchants screw up their affiliate program because of poor product and inventory planning. Case in point, just last month, a well known Japanese on-line retailer launched a new affiliate program on a new network instead of the network they had been using for over 6 years. The new offer on the new network was higher, and the turn around time on transaction approvals was half as short as the old network. Being a long time affiliate of this retailer, we immediately picked up their new offer and began promoting their product on our on-line media sites. We were quite exited to see how well this program was performing. By the end of February, we had reached a new sales record with this merchant and knew from past experience that our transaction approval rates would be in the upper 90%.  Imagine our shock when we started to see up to 38% of our orders getting rejected! What happened? A little investigation showed that the merchant made several errors when setting up their program. For starters, they didn’t anticipate the great demand for their new product. That meant that customers had to wait up-to 4 weeks before the order was shipped. The stock problem helped pushed up order cancellations which in turn pushed up our transaction rejections. But perhaps the most serious error made by the merchant was the 30 day time limit they had on transaction approval/rejections. Since the merchant would not approve an affiliate order unless payment was made by the buyer, and payment was only made after the product was ready to ship, many of our transactions were rejected simply because the 30 day limit had expired and the customer was still waiting for the product to ship. In other words, the merchant will still get the order albeit late, but we get stiffed because of the short approval time. Needless to say, we contacted the merchant and convinced them to extend the approval time. Plan your program carefully, give plenty of time to confirm orders and most importantly: Don’t stiff your affiliates!