So yeah, if you’re quick on the newsfeed you’ll noticed that I pulled this post from yesterday, which was very different than this repost.
I received an email from an affiliate asking me to write about an issue they were having with a merchant getting deactivated at a network, and the merchant owed the affiliates a few months of commissions. There was no communication about what happened, why it happened, and if theres anything being done about it.
This has always been an area of interest to me, so I picked it up and wrote.
Unfortunately, it came off looking like a bitch post, which was not my intention. I don’t want to drag anyone through the mud based on second-hand information.
With apologies to the person who asked me to write about the subject, I have pulled it, slept on it, and decided to fill the void with something a bit different. I’ve removed the comments identifying the merchant and network. I don’t want this to be a place to air a grievance, however valid it may be.
My intention was to use this example as a discussion point for a broader topic, which is what is a network’s role in the Affiliate-Merchant relationship. For now, I’ll ask a bunch of questions.
Who owns the relationship? When a relationship is formed between an affiliate and a merchant, who is responsible for that relationship?
Is the merchant entitled to have that affiliate’s contact information?
When one party acts badly, should the network identify, intervene, and remove that party from the relationship? Should the network be responsible for the actions of the member of their network?
Who is responsible for communicating merchant standing and status? For example, if a merchant has been deactivated due to non-payment, what sort of communication should be issued by the network? Does the network owe the affiliates an explanation as to what is going on and what’s being done to resolve the situation? Or is that up to the merchant alone?
Should a network allow a merchant to get in a situation where money is owed to affiliates but the network doesn’t have the money? Should the network bear some of this risk?
What is the network’s role?
Are the networks like credit card companies? Enabling business and transactions between parties, and when something goes wrong they take responsibility and protect the consumer.
Or are the networks like the telephone company? You can conduct business through their lines, but they have no responsibility for what goes on there.
There’s nothing wrong with either role. Whether you’re dealing with a credit card company or the phone company, you get what you expect.
I don’t blame the phone company for telemarketing because I don’t have any expectations that they are responsible for that. Even though the phone company makes money from the telemarketers.
When expectations of what the role is doesn’t match reality, that’s when problems arise. And worse, if the networks can pick and choose the role they want to play depending on the situation, that results in a bad experience for everyone involved.
How can they justify owning the affiliate relationship when it comes to contact information, but not when it comes to money? Shouldn’t it be one or the other?
Whatever the role is, it should be made perfectly clear.
Let’s use the example that prompted this post in the first place. Somehow a merchant was deactivated from a network and it seems that affiliates may be out of commissions. What makes a bad situation worse is that there’s probably no information available about what happened. This has played out in every affiliate network time and time again.
An affiliate’s expectation may be this:
The Affiliate network has an escrow in place so that any amount of money owed to affiliates is always exceeded by the amount of money in an escrow account. If a merchant goes belly-up or otherwise stops their program or paying into the program, at the very least it’ll be deactivated quickly before any debt in commissions accumulates. And since the network has skin in the game too, they’ll do everything they can to ensure that the merchant pays what they owe.
The network’s perspective is closer to this:
We’ll do everything we can to ensure that affiliates are made whole on commissions they’re owed, and to ensure that a merchant doesn’t default on any commissions owed. This may include holding money in escrow. This is not practical in all cases and we must make concessions for larger, more credit-worthy merchants where there is a low risk that they’ll default on any commission payments. 99.99% of the time, this all works great. Usually, everything runs smoothly and merchants pay everything they owe. But sometimes, things go bad and we and affiliates are out of commissions. We try to minimize this risk, but when it comes down to it there’s little recourse we have when it happens, we’re not responsible for any fees owed to affiliates. We may go after the merchant for our fees. The affiliate is on their own.
How do these differing expectations come about? The former is sunny-day, best case scenario, PR speak. It’s how the people at the networks hope things will work, and for the most part it does. The latter is closer to the hard truth and exists only in legalese in terms and conditions.
We’ve been operating for years with this reality. Somehow we are surprised every time things go badly.
I don’t expect the networks to all of a sudden take on the burden of bad business like credit card companies do.
I do challenge the people at the networks to pick a role, be clear about it, and stick to it.
