Why You Should NOT Have An Affiliate Program | Dan Henry

In today’s video i’m gonna go over whyyou should or should not have an affiliate program for your offeryour online trend or your coaching programand don’t forget to subscribe as i release brand-new videos like this each andevery week Hey everybody my figure is Dan Henry andi’m the author of the Wall Street Journal bestselling bookDigital Millionaire Secrets how i construct an eightfigure business selling myknowledge online and today let’s talk about affiliate programs youmay be thinking i need an affiliate curriculum for mycompany or my online route or my application or mastermind or coachingprogram et cetera et cetera et cetera and you may be thinking that in the sameway i was thinking that years ago when i saw you know bigcompanies like Click Funnels uh you know and other firms likethat having affiliate programs and thinking well they’re doing it ineed to do it right and that’s that’s how i viewed itand so i implemented an affiliate program for an online course that i hadand frankly it was one of the worst mistakes i’ve ever made and so what i’mgoing to go over today in this video is why i believe itwas a mistake why i shut it down why i currently don’thave one and why you may want to consider not having oneor why you actually might want to considerhaving one because it actually depends on youroverall business strategy and so let’s hop over to the whiteboardand i’m going to go ahead and dive claim inso let me abruptly map out for you what happenedwhen i had an online uh or an affiliate curriculum for my online route this isexactly how it went down so here’s my funnel right so let’s justdraw this out inside of here is my funnel this iswhere my webinar my emails and all that jazz uhyou know makes locate and the extent of this funnelis to take traffic traffic from the web so let’s just say over here trafficand anything i put under this direction here is trafficand you know for instance facebook ads okay let’s just say facebook adsso i’ll curve that traffic and c and alter the funnelconverts that traffic into marketings i mean that’s prettyeasy hypothesi to understand right so i hadfacebook ads operating and i was spending thousands and thousands and thousands ofdollars on facebook ads every month to a funnel and i was producing revenuei too had youtube ads racing and why i say used to i’m referring toit in the past tense because this particular courseuh i don’t sell anymore and i don’t have an affiliate platform anymore that’s whyi say i used to we have something different now sohere’s youtube ads boom okay and then there’s my own organicefforts you are well aware perhaps uhyou know or i’ll just say organic i want there was numerous things i did onfacebook and again more uh you know more effortfrom me simply me not anybody else me in theorganic in my company doing these three things to send trafficto the funnel and this could be like podcasting assess or whathave you and this refers traffic to the funnel turns it into coin nowin theory what i made would happen when i hadaffiliates okay affiliateshere are the affiliates i imagined the same thing would happeni spend money on facebook ads i get new peoplenew cold traffic into the funnel make money i spend money on youtube ads i getnew people into my funnel i make money i you knowgo and do podcast interviews i get new people in the move i make moneyso i thoughts the same thing would happen because i was i was youngand i was dumb and i thought that i would oh hey guysgo out here and get brand-new transaction to go to the funnel and make money butthat’s not what happened and the reason why i concluded this was a good ideawas because if it expensed me let’s say this let’s say this product was1 dollars i’ll threw 1k here well let’s just say for a momentthat it cost you know i don’t know 600 or 500 touh acquire a customer you are able to think well dan if you sacrifice 40 to your affiliates you always know that it’s going to cost you 400 per buy you always know no matter whatthat if an affiliate comes you a brand-new client and you pay 40 that’s 400 per customer right whereas here this one month it might be 300 onemonth it are likely to be 600 you don’t know and blah blah blah blahand so here’s the thing is that sounds great intheory that is just like honestly a sixfigure industrialist who just gothis feet rain into building a business moves out andwrites a blog post and says isn’t it easyall you gotta do you wanna know how much fund you’re paying forfor an acquisition merely use affiliates because that wayand they planned it out but that’s not how this happens okay what ends up happeningand what dissolved up happening to me is this is i would spend money onfacebook ads to acquire a client i’d spend money on youtube ads to acquire acustomer i’d spend time on organic to acquire overheads somewhere not we didn’taudit we went back we didn’t review 90 percent9 0 of our affiliates did not bring in brand-new customersthese were not new customers what they were doingwas they were going to the people that i had alreadyacquired through organic they were going to the people that ialready acquired through youtube and they were going to the people that ialready acquired through facebook and simply saying heyuse my attach here’s a bonus blah blah blahand they would go in here and then now even though i already squander coin onthese things to acquire this client because they usethat link now if let’s say my penalty on facebook ads was let’s justsay my cost was say 500 to acquire a client for a 1k present right well now because they use the linki now got to pay another 400. To the affiliate which equals freaking 900 900 horses or in a number of cases if this wentover i’d be negative on a trend auction andonly five to ten percent actually generated new patrons butof that five per uh you are well aware five to ten percentof affiliates that returned brand new customersthe refund rate was three to five times higherthree to five times higher on refunds so it just when i actually did the mathit time didn’t make any sense having affiliateswas costing me fund it was bleeding the profit from my companybecause the affiliates were not going out and returning me brand-new customerswhich is the entire concept right they were going out and they weresimply sharing their links with parties that i already invested moneyto acquire and so i was just contribute beings money for freeit was insane so what i did was i came back and i said screw thisand i said parties are going to be angry but appear this is business and you allain’t holding up your resolve of the bargain anyway so i got rid of the affiliatesi closed down the affiliate platform i paid everybody what they were owed andi was done and you know what happened our costhere remained the same we perfectly get rid of thiswhich increased our sorry weakened increase our payment per purchaser and ourroi our return on investment our benefit wentup and our marketings did not go down we started the sameexact amount of money each and every month the same amount of gross salesbut we didn’t have to pay the 40 percentage to affiliatesand on top of that in order to manage these affiliates i had to paylike a fulltime staff member to constantlyfield guys when you have an affiliate program here’s what happens9 0 of your affiliates will will refer either no marketings or very little sales butthey’ll fill up your subsistence container with 10 000 questions hey i referredthis person and and you know uh i didn’t see thecommission come through more and i i communicate this email at 9am but ididn’t get a response hitherto and it’s 5 p.m so i’m going to send another supportticket and it just goes it’s insane like the amount of money ipaid to staff to deal with affiliates wasand plan them and ask their questions was insane it was justnuts and so i i cut it out and i got rid of it nowyou might say well dan you mentioned at the beginning of this video that westill might want to consider an affiliate programin what client would we do that well let me show youto me the logical react here is this if you’re spending and if you’reactively scaling and spending money on your own ads and your ownefforts having an affiliate program can bleedyou dry but if you don’t want to waste any coin onthis if you don’t want to do this as yourprimary informant of traffic and instead you put your efforts into trainingaffiliates to bring in brand-new customers and this isyour primary method then the relevant recommendations that 40 you know you you know your costper acquisition is is always going to be you know 40 then that makes a lot more sense because this is your primary source oftraffic this is your primary thing that makes a lot more sense soif i started a company where for instance i was sellinglet’s just say that this was a different notebook let’s say this was some sort oflike i don’t know journal or something and iknew that because it was like a maybe a 30 make i didn’t want to expend tons and tons of coin on facebook adsinstead i wanted to teach my customers to help share the planner and make a acommission off of it i may or may not elect to do that buthere’s the thing you have to understand the amount of work effort and talent itcomes it comes down to to make an affiliateprogram work to manage an affiliate programand to civilize affiliates to promote to me is far more work than simply get goodat facebook or youtube ads personally okay sothis really comes down to a decision on what you’re sellingand what you’re willing to do and what you’re willing to manage and look ifyou’re good at training people on how to sell stufforganically and you think that you can perform more coin by makingthis your primary source of traffic then is moving forward and do it okay buthaving equal exertion into all these the affiliates are going to bleed you drythat’s just the course it becomes and that’s what i experienced i have in the pastthought about potentially creating an affiliate programjust for my bible and we do have some upsells in my bookfunnel and affording affiliates a percentage of that butnot opening them percentage points of anything we sell on the back endbecause again that simply will bleed me dryand you know i just don’t want to do thatso uh to me when i consider an affiliate curriculum i lookat what is my main source of traffic what do i want to deal withwhat am i what can my staff handle and should i makethat the main sources of cold traffic and you can alwayslike for instance let’s say i i created an affiliate planned for this bookand that was the primary source of traffic for this booki went out and coached parties how to sell more of this record and i opened them sayhalf or even 70 whatever i would still retargeton facebook and youtube sure but i would probably make this the numberone source so that right there is just some things toconsider here’s the thing if you’re brand newif you’re a startup and you are just beginningi would not recommend an affiliate program because even if you were anexisting sevenfigure company i would still caution it and i wouldstill talk about with you you know hey let’s reallyconsider things well did a podcast escapade um on the dan henry present withdave woodward who is the who started and germinated theaffiliate curriculum for clickfunnels uh you probably want to go check outthat podcast episode because we talk about this very thingthat i’m talking about in this youtube channelor in this youtube video i’ll leave a link to that podcast episodebelow where you can check it out and don’t forget to subscribe to my podcastas well because it’s a great podcast and i liberate a lot of cool stuffso if you want to go check out that podcast incident you can you can get alittle bit more indepth on dave’s opinion uh and he does concurwith this but that podcast escapade “weve been” open itup and move more in depth so these are just some things toconsider if you’re a startup i wouldn’t do it i would focuson get your structures tight before you take on such a big undertaking as anaffiliate program and if you’re a seven or eight figureentrepreneur well then you probably can answer your own question when it comesto the logistics of this by the way if you’d like tolearn more about how to grow an educational offer anonline course or instructing platform grab a facsimile of my book Digital MillionaireSecrets it is absolutely free the book is freejust pay for shipping i’ll leave a link belowwhere you can get a copy and if you’ve already read it and you’d like to learnmore about how my company can work with you and you can work with my company tobuild your offering i’ll leave a link where you can book acall and talk to us and see if it’s a good fit to work together sojust to recap i’ll leave you a link to get the book i’ll leave you a link tobook a call in case you want to check into workingwith us and i’ll leave a link to check out that occurrence with davewoodward where we talk more about this whole affiliate jazzuh that said be assured to subscribe to the channel as i releasethese videos each and every week i’ll see you in the next one

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