Web Hosting Talk : Web Hosting Main Forums : Web Hosting : affiliate vs referral

[mv808]

How come a lot of the low budget hosting providers (powweb, lunarpages) have an affiliate program, but the smaller ones (asmallorange, fluidhosting) don't? ASM have a referral system, but instead of paying you the $, they apply it towards your hosting cost. And with ASM you don't even know if the person will put you down as the referrer (i'm guessing powweb uses cookies).

[ldcdc]

fluidhosting does have an affiliate program, via shareasale.com

[HostRefugee-Vince]

Larger companies have more money coming in which allows them to pay affiliate fees. If you have seen some of the prices they pay out just to convert one customer and then compare it to the price of their plans... You will see alot of the larger hosts actually take a loss for the first year to gain a client.

In the end, it's all really a numbers game. Some clients will stay, and some will leave but eventually I assume the larger hosts see a return on their investment.

For the smaller hosts, without the cash flow it's hard to offer the same affiliate deals that the larger hosts do. Instead, some choose not to offer any type of affiliate/referral program. Others choose to offer a credit towards the referrers hosting cost, a free month, or something else that won't require them to pay directly out of their pocket.

Alot of hosts do use cookies but obviously not all. I guess it comes down to what their developers can code up, what affiliate script they choose, or what a third-party provider offers them. And yes, Powweb does use cookies.

[asr_guy]

One reason merchants (in this case hosting companies) offer a credit back to the affiliate is that it's lower cost than offering cash, since the cost of the credit is less than the "value" of the credit.

Smaller hosting companies might not be aware of the options they have to start their own affiliate program - it does take some investment but has been shown to increase sales by 15-20% if done right. My guess is they either don't know or they are focused on other activities that have higher ROI and aren't ready to implement just yet.

You could always ask them.

Cheers,
Peter

[ldcdc]

it does take some investment but has been shown to increase sales by 15-20% if done right.

For some hosts, affiliate marketing has been the a major (if not the major) drive behind their growth. It takes some serious financing though.

Top affiliate commissions have doubled in the last 3 years or so, in an industry where the service continues to become ever cheaper. An interesting thing to note is that it is the budget hosts that have been paying the highest commissions, and this has been going on for years now.