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Affiliate Marketing and Conversion Rates: When 20% is More than 50%
Copyright 2005 Saul A.J. Burton

Let’s say you’re an affiliate marketer, and you want to choose which product you want to promote. You’ve searched a lot and now you have to choose between two products, that sell both for $100.
The main visible difference is that product A has a 50% commission, and product B only 20%…

Which would YOU promote??

Most people would obviously answer product A… the commission rate is more than double the one product B gives - so why even bother asking?? Because a lot of times the commission rate has nothing to do with how much money you’re going to make… there’s a much more important factor to consider: Conversion Rate (CR).

The CR of a sales letter is a number that says how many visitors become customers. The average standard in offline direct marketing is 1%. On the internet it can easily be much more (a webpage can be far more effective than a paper letter ;)

The conversion rate depends mainly on how well the copywriter did his job. Good copy - high CR, bad copy - low CR.
That’s why copywriting is so important when you’re selling online.

So, let’s make an easy example to see how much difference a better CR can make…

I challenge a friend of mine to see who can make more money online.
We are promoting two products: both product A and B sell for $100.

Product A has a 50% commission and has a visitor/buyer Conversion Rate (CR) of 1%.
Product B instead has a 20% commission but a CR of 7%.

Who would promote A and who B?
Most people (without thinking about conversion rates) would jump on the product A train. 50% against 20%? Who are we kidding? Of course 50% is better, it’s more than twice the commision of B… but is it really that much better?? Let’s do some maths :)

Let’s say my friend spends $10 to send 100 visitors to the sales page of product A. One of them buys (1% CR) so he makes his first $40 of profits (50 minus 10 that he spent in advertising).

I instead spend $10 to send 100 visitors to the sales page of product B, and 7 of them buy (7% CR). With a 20% commission, I just made $130 (140 minus 10 for the ads).

Promoting a product that had less than half the commission of product A I made more than three times what my friend did - his $40 against my $130… and I sent the same number of visitors that he did.

Same effort, triple profits. With a product (B) that had less than half the commision of product A…

So is the commission rate value all that useful to decide what you should promote? Not really … in my non-guru humble opinion!
Commission rates can be incredibly deceptive, so when you make your choices keep it in mind!

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Saul A.J. Burton
Chief News Editor
http://www.HowToSell.info
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