Business Thread: Why some new programs fail

[Jakke PNG]

I ate the thread.

[scottybuzz]

i ate u

;

[RRRED]

What? Before clicking this thread it says that DollarmanSteve started the thread... weird

[Dollarmansteve]

ugh.. that was such a long post too.. I dont know what happened.. went to post and got a database error

[kristin]

D'oh ... always happens when you want to be smart. : )

Reasons new programs fail (I'll help you out) ...

1. Everyone and their brother think the next logical step after one year in the industry is to open their own program. Too bad they forgot about banking, postal, customer service, lawyers, CPAs and the list goes on ...

2. Non-exclusive, un-original content. A good example of a great new affiliate program? BrutalBucks.com ... Stellar content, and unique.

3. Account reps ... they can bring life or death to a program.

[Webby]

Originally Posted by TeenGodFather

I ate the thread.

How was dinner?

[Dollarmansteve]

I'll try to recreate the magic This thread was motivated by the "limited trial" thread.

Most new programs are started by people who used to be affiliates. Reality is that affiliates have a skewed vision of how sponsor programs actually work and make money. The goal of the webmaster-turned-program-owner is usually to "make the affiliates happy by giving them what they what" ie to treat their affiliates how they wanted to be treated when they were an affiliate. What do affiliates want? Good conversions, high payouts and boatloads of free content / promo tools / hosting /etc.. basically they want to pass their business costs into the program. What do all these things mean to the sponsor program? Massive negative cashflow.

There are alot of new programs coming out who claim to be "surfer friendly" while still offering PPS payouts (on trials) of $25 - $35. Secondary sources of revenues like EZclicks, Xsells, exit consoles, members area upsells, cancelled member revenue, etc are 100% necessary to operating a profitable PPS model. If these 'surfer friendly' programs do not have a very aggressive plan to recoup the revenues they choose to leave on the table because they're being "nice" then they are guaranteed to fail.

It is naive to think that a site can be built that will retain any better than the average paysite. Yes, sure there are some super micro-niche sites out there who have 10 guys out of 500 who rebill for 5 years (on no-trial revshare joins), but what about the other 98% who's average retention is probably less than 2 months? Surfers are NOT loyal to the site they join and porn is a pure commodity - to think otherwise is an attitude that will again guarantee failure.

[Jakke PNG]

Originally Posted by Dollarmansteve

ugh.. that was such a long post too.. I dont know what happened.. went to post and got a database error

Dang. Sorry I ate your post, it was delicious..if it makes you feel any better.

[tranza]

GFY is acting funny today......

[RogerV]

Originally Posted by Dollarmansteve

I'll try to recreate the magic This thread was motivated by the "limited trial" thread.

Most new programs are started by people who used to be affiliates. Reality is that affiliates have a skewed vision of how sponsor programs actually work and make money. The goal of the webmaster-turned-program-owner is usually to "make the affiliates happy by giving them what they what" ie to treat their affiliates how they wanted to be treated when they were an affiliate. What do affiliates want? Good conversions, high payouts and boatloads of free content / promo tools / hosting /etc.. basically they want to pass their business costs into the program. What do all these things mean to the sponsor program? Massive negative cashflow.

There are alot of new programs coming out who claim to be "surfer friendly" while still offering PPS payouts (on trials) of $25 - $35. Secondary sources of revenues like EZclicks, Xsells, exit consoles, members area upsells, cancelled member revenue, etc are 100% necessary to operating a profitable PPS model. If these 'surfer friendly' programs do not have a very aggressive plan to recoup the revenues they choose to leave on the table because they're being "nice" then they are guaranteed to fail.

It is naive to think that a site can be built that will retain any better than the average paysite. Yes, sure there are some super micro-niche sites out there who have 10 guys out of 500 who rebill for 5 years (on no-trial revshare joins), but what about the other 98% who's average retention is probably less than 2 months? Surfers are NOT loyal to the site they join and porn is a pure commodity - to think otherwise is an attitude that will again guarantee failure.

I couldnt agree more.. I've always been a paysite and program owner. its taken me years to figure out how to profit while keeping the surfers and affliates happy...
11 years and I'm still learning and trying differant things. but the basics you can only learn from trial and error

[mpahlca]

Originally Posted by Dollarmansteve

It is naive to think that a site can be built that will retain any better than the average paysite. Yes, sure there are some super micro-niche sites out there who have 10 guys out of 500 who rebill for 5 years (on no-trial revshare joins), but what about the other 98% who's average retention is probably less than 2 months? Surfers are NOT loyal to the site they join and porn is a pure commodity - to think otherwise is an attitude that will again guarantee failure.

Interesting opinion, I have to say that what i disagree with is that you cannot increase retention longer than stock numbers, I believe this is a falacy of people who have only come from the paysite side. I won't go into details etc. as it would be a chapter, but you know Steve I always like any discussions with you! So what would you say back to me about our retention? I believe we are an industry leader in retaining members, and our methodology is that we believe its easier to keep a member than to get another one. Let me know what you think!

[Dollarmansteve]

Originally Posted by mpahlca

Interesting opinion, I have to say that what i disagree with is that you cannot increase retention longer than stock numbers, I believe this is a falacy of people who have only come from the paysite side. I won't go into details etc. as it would be a chapter, but you know Steve I always like any discussions with you! So what would you say back to me about our retention? I believe we are an industry leader in retaining members, and our methodology is that we believe its easier to keep a member than to get another one. Let me know what you think!

You dont have trials and that allows a lowish mothly recurring price.

By not having trials you take in less front door sales and have lower affiliate payouts. This reduces costs and allows a less aggressive monthly price.

The type of front door joins you take in is different than someone who would join on a $1 trial. If I look at the rentention of members who joined at the initial monthly price point it is higher than trial joins.

So I will modify the company mantra a little

"It is easier to keep less members at a lower monthly price than to get a new person to pay $25 up front because paying out affiliates on low-dollars trials is expensive and risky"

[mpahlca]

Originally Posted by Dollarmansteve

"It is easier to keep less members at a lower monthly price than to get a new person to pay $25 up front because paying out affiliates on low-dollars trials is expensive and risky"

Love that part

[Rochard]

A lot of affiliates do become program owners. The reason why is once an affiliate gets to a certain point where they can push enough sales to a program..... They say "why only grab 60% when I can grab 100%". They open up their own program with the intention of pushing their own traffic to it. Then they open it up to affiliates just for the extra sales. Most of these programs were profitable before they announced they were open for affiliates.