There are many packages of software out there… and you literally have to be a programming expert to figure out the differences, specifically the advantages and disadvantages of each.

What is even more confusing… the prices for this type of software range from...

$300 to over $12,000!

Yes, I am not kidding… there is that much of a fluctuation. Over the next two articles, we will go over the pros and cons of each and show you the most economical solution.

The main purpose of Associate Program software is... tracking! Visitor tracking, associate tracking, sales tracking. In other words, you need to be able to track your associates, and the visitors they send to your site - and the visitors who buy.

There are a number of ways this can be done.

There are many, many ways, but the most common are:

• CGI tracking
• Cookie tracking
• Hard-coded HTML tracking (this is a very old fashioned way of doing things at this point because technology has really progressed)

Please note that these systems have one of the following:

• An "offline" database where all of the information is stored offline, which means the associate cannot view their statistics but it is easy to manage for the company.
• An online database, where all statistics and associate information can be viewed by associates, in real-time.
• Neither database, if they are really "Mickey Mouse" and manually calculate what they owe their associates by hand (this is the way we used to do it back in 1995 as the software and technology didn't exist for doing this without a major investment).

Just to refresh, in case you have forgotten, all associate programs assign an associate a special URL, which is specific to them so when someone links to their site, they know who sent them the visitors and if that visitor buys. For example, with our Internet Marketing Course, the URL may look like http://www.marketingtips.com/t.cgi/0086/. If someone posts this URL at their page, with a text link or banner, anytime someone clicks through that link to our site, we know associate #0086 sent us that visitor. If that visitor buys, we will give that associate a referral fee as a "thank you" for sending us the customer.

It sounds very simple, but the software is very complicated, as it has to account for many different types of situations, which we will go over in this article.

Tracking through HTML pages

This basically means you are setting up mirror pages or mirror sites. I've already described how this works in one of my previous articles, but in case you didn't read it... here it is again. If you already know this stuff, just skip to the next section on cookies by clicking here.

Basically you set up a separate page... or a separate site, for each associate. This is a VERY time consuming way of doing things, but there is almost no cost involved other than your time. Here's how it works...

Using marketingtips.com as an example. You'd set up a page for your 1st associate called http://www.marketingtips.com/info1.html. Then, as you got more associates you'd add pages... i.e. www.marketingtips.com/info2.html and .../info3.html .../info4.html and so on.

These would all be identical pages. The only difference between.../info1.html .../info2.html .../info3.html etc. is that it has a different tracking number. You actually hard code in the associates tracking number (i.e. info5.html would have the tracking number or associate number of "5") so that when you get an order, a hidden code in the order form prints the code. This allows you to manually track and give your associate credit for the sale.

Now this does work and is great for doing a joint venture or two with a few people… however it has MANY drawbacks.

First of all you can only sell one product. So if you have one sales letter which sells one product, doing it this way can work initially… but having multiple products at your website or having multiple pages will cause you nothing but havoc.

But say I get 100 associates (and it's pretty easy to get 100 associates… in fact it's very easy to get 100+ associates in a matter of 30 days)... now if I want to change something like the price, or I have found a better way to sell my product so I want to change the sales copy, or I want to add in a graphic, or whatever; I have to go to every single webpage and change them all manually, all 100+ of them. It's a HUGE job!

Trust me, I used to do it this way back in 1995 when associate/affiliate software was not available. Updating the pages ate up days of my time.

There is also the fact that you can't offer any of your associates real time statistics. They can't tell how much they've earned until the end of the month when you "manually" calculate it (which can take you a couple of days if you have 100+ associates). They don't even know how many visitors they are getting or how many sales they are generating... they have no way of tracking it on this type of system. And on top of all that, they have to have 100% trust in me that I'm not ripping them off because I am the only one who has the "true" visitor and sales numbers… they have no idea if they are selling the numbers as I report it to them. It's a pretty primitive way of doing it. It was a very old way of doing associate programs and you can "shoot yourself in the foot" because most people will not sign up with you if they don't feel comfortable that you are reporting to them in real-time, all the time, about how they are doing with sales. Heck some of the associate program directories (which I will mention later) won't even list your site on their list if you do not have real time tracking software.

Now another problem could occur if you had a site selling four products, and you wanted people to roam around your site, read articles and all that kind of stuff; but still tracking the associates visitors and sales. It's almost impossible to set up a reliable system using this method. There would be no way to track your visitors or associates from webpage to webpage. The only way to do this is to set up a whole separate individual site for every associate within your main website (a VERY big job!).

It would take HUGE amounts of room on your web server and there is no way you could manage it. If you ever wanted to change one small thing it would literally take you weeks to complete. It's totally unrealistic!

In our case, with thousands of associates, this would be an impossible amount of work!

Ok, I know I have stated a lot of negative things about this method… so you may be asking, "What is the benefit to this method?" The answer, unfortunately, is only one benefit… it is really cheap for those who have no money and lots of time on their hands… as setting up takes only your time and knowledge of HTML. But remember, you may do more damage than good as many associates will not join because they can't see their stats or have no confidence in you. Also you will get a low rating from many associate related directories as you will look like a "basement operation". But I guess despite the negatives, having this system is better than having no system.

You could get away with this about a year ago, but not anymore. Some associates will not sign up on a system this ancient as it offers them no control. But I thought I would mention it just in case you saw a few of these floating around online. They do work, but they are not competitive against all the other associate programs, which have come out over the last 6 months.

Cookie Tracking

This method of tracking the visitor and sale offers some MAJOR advantages… but a few disadvantages as well.

Let's use an example here. If you had an associate promoting your products and you were using cookies to track that URL, you may give them a URL which looks like www.yourdomain.com/?12345 or www.yourdomain.com/track.x/12345/.

The associate number in the URL is a unique number, which is used to track an associate whether they use banner ads, graphics or text links.

In this case, if a visitor comes through an associate's link to my site, a "cookie" is placed in their browser called "12345". A cookie is a piece of information which stays with their browser so if they come back to the site at anytime, we can ask them if they have a "cookie" for our site, and the browser will tell us it is "12345". I will get to the importance of this in a moment.

We track them as a visitor through our site. If that visitor places an order we know which associate number gets credit for the order and they get a commission for the sale.

In other words, the cookie, which is placed in the visitor's browser, is the associate number... allowing us to keep track of which associate sent the visitor to us.

Let's go over it in a little more detail (and in "laymen's terms" so everyone understands it).

When a visitor clicks through on a banner or text link from an associate's site to your site... the first thing that happens is our software asks the visitor's computer... "Do you have a cookie for our site?" If this is the first time the visitor has come to our site the answer would be "NO" from the visitors browser... and our website would give them a cookie which is encoded with the associate's number (in the case above, that would be a cookie which reads "12345"). If the visitor leaves, that "cookie" (or associate number) will stay with them. If they come back a few days later to our main URL or any webpage on our website, our software will ask if the browser has a "cookie" set. The browser would say "YES" and give our software that cookie. Then underneath all of the webpages it "remembers" the number "12345", as the visitor surfs through the site and if that visitor orders something, our website records the "12345" as the person who referred the visitors to us and that associate (associate #12345) gets a referral fee for the sale.

Still with me?

The beauty of cookies is that it makes it very easy to track, because no matter how many products a visitor orders... no matter how many times they come back, it gets tracked. This is not possible in any other method of tracking… which makes it a very powerful way to track visitors and orders. If a visitor visits the site today, but does not order… but then returns a few weeks later (or years for that matter) the software still tracks the "cookie" in the person's browser and the associate who initially sent him to the site gets credit for the order. If the person orders more than one product over a few days or a few weeks period, using the cookie method, it is super easy for the software to track all of this... and the associate gets credit for all sales generated, in a timely manner, whether he orders today, tomorrow, next week, or next year.

As of this printing, places like Amazon.com don't do that. If you are an associate of Amazon.com and have their icon on your site... if someone clicks through and buys right away you get credit. However if they leave Amazon.com and come back three seconds later by typing in amazon.com and not linking through the special URL they linked from in the first place to visit Amazon.com, and then place an order, you as an associate will not get credit for the sale. Amazon.com takes credit for the whole thing. That's the problem with those types of Associate programs. In other words, the only way to get credit for that was to type in the long URL like http://www.amazon.com/exec/obidos/ISBN=1571200207/planetpatchworkA/

Now, who is going to type in that?

But with cookies, if you first link through to a site and the cookie gets set, you can just type in the main URL and the cookie is still there… and the associate gets credit for the sale without the visitor ever knowing. Let's use my Internet Marketing Center® as an example. If an associate has a banner or text link to the site and we assign him http://www.marketingtips.com/t.cgi/7999/ and someone goes there, a cookie of 7999 is set in the visitor's browser and they get redirected to http://www.marketingtips.com so nothing looks out of the ordinary. If the visitor does not buy, but later (days, weeks, or even years later) types in http://www.marketingtips.com, that "7999" cookie is still in the customer's browser and associate number 7999 will get credit for the sale even though they just went back to the main domain name, not the URL with the "…t.cgi/7999/" in it. Cookies are the only tracking method that can do this efficiently and easily.

You actually want to use cookies because the main benefit to your associate is that he will get credit for the sale six months from now, a year from now... whenever the potential customer visits the site again. And even if a visitor doesn't buy the first time, if you offer good information they will come back... and buy!

You can set the cookie to expire after a certain period of time, after 2 weeks, after 2 months, after 2 years... the cookie becomes obsolete. After a certain period of time the associate doesn't get credit for that sale anymore. The time period in which the cookie is active is really your choice, and depends on how much you want to reward your associate for referring their customer to you. Personally I set our cookies at 3 years… so if the customer comes back and buys within three years, the associate who originally sent them gets credit for the sale.

Okay... so now you have a visitor at your site, and they want to buy... let's go into more detail on how cookies work.

Now if she click through to the online order form, the associate software program calls the cookie back from the visitor's browser and the associate number is placed in a hidden field in the order form... so that you can track the sale. When the sale actually goes through, the associate's sale counter is increased by one so that the associate can see in real time exactly when she has a sale (assuming you have good associate software, which displays these stats for the associates).

I won't get into the gory details, but "good" software, like that which we use at our marketingtips.com site, will track the number of visitors and the amount of sales coming in through each individual associate (so you can see which associates are sending you the majority of your visitors and making the majority of the sales. This allows you and your associates to check and see if they are converting enough visitors into sales. If you notice that they aren't, they can change their banners, text link, etc. to be more effective.

Okay, what about offline orders (800#, mail, fax)… how do you track those?

Off-line orders do happen, as some people don't trust the online ordering process even if secure servers are used. So you will get orders via fax, mail and through your 1-800 number... and you want to give your associates credit for these orders too! Not that many associate programs DO… so features like these will separate you from the competitors.

This is just one of the hundreds of little "tricks of the trade" that I reveal in my Internet Marketing Course... and in my new course "12 Secrets and Tools to an Outrageously Successful Associate Program" (which I will mention later). It is easy to track all of your mail, fax, and phone orders for associates once you know how to do it (which I reveal in one of the two publications above).

This can be a very important factor to get associates to join your associate program as they have to feel confident that they are getting credit for ALL sales generated (not just online sales). So make sure you know how to do this.

Okay… we've talked about how powerful and useful cookies are... but there is a downside.

Some people turn off cookies on their browser, or they may have older browsers which don't accept cookies. Additionally we have encountered some cookie bugs with older versions of Netscape... and we don't want to place cookies on those browsers.

About 20% of the people online either don't have a browser which accepts cookies, have cookies acceptance "turned off" on their browser, or have an older version of Netscape with cookie "bugs" in it.

So when these 20% come to the site... if the software you are using only operates on cookies (which many do) your associates would lose these sales because their visitors can't be tracked. This is not good and will not only make associates lose faith in you, but it can create a lot of "explaining" to associates if they don't get credit for sales. This may even stop many people from signing up if they know how you are tracking and have experienced difficulties with similar software.

But the good news is I have a solution to the problem (we will get to that in a few pages!).

CGI Tracking

Tracking programs that utilize CGI scripting actually put the associate's code right in the URL as he is surfing through the site

Note: I categorize this type of tracking as "CGI Tracking", but it can be done through JAVA script or another programming language. It has virtually the same functionality as I am describing here, but I use "CGI" as an example as it is by far the most commonly used.

Basically the URL is hard coded into the appropriate pages so that the associate can still get credit for the sale.

The code is visible to the visitor because it becomes part of the URL. For example, if the visitor bookmarks the site... they wouldn't just bookmark the URL www.yourdomain.com, but they would bookmark something like www.yourdomain.com/index.cgi?54321 or www.yourdomain.com/tracking/reseller.cgi/home/54321.html, the possibilities are endless as to what the URL could look like… depending on how they set up their scripts.

The point is the URL is VERY long and it has the associate's ID in it.

The associate code is not hidden, it's still in the URL and it still puts the code on the appropriate pages so that the associate gets credit for the sales.

However, if someone leaves that page and remembers the main domain name (i.e. www.yourdomain.com) and they type that in later to revisit the site, the associate will not get credit as there is no way to track the visitor or sale if he does not re-type in the full long URL (which is almost impossible most of the time).

This is the down side to CGI scripts.

You will also find some people will notice the long URL with a lot of "codes" in it and erase the extra codes in the URL and just go back to the root domain (www.yourdomain.com) to see if something is different there. If they do this, the tracking is lost and the associate will not get credit for the sale.

Many associate software programs use this method, so be careful which associate program software you choose.

It is a "messy" way to do associate tracking. It is clear that you are tracking something and many people are curious as to why the URL on the webpage is so long and full of funny numbers/names.

A Solution - The best of both worlds!

From the article above you can see why each system has faults by themselves.

However the power is in using them TOGETHER!

I highly recommend using a combination of both cookies... and CGI scripting for backup.

Let's use the associate software we use for Internet Marketing Center® and our Internet Marketing Course.

Why do we want to use a combination of both methods of tracking?

We want our associates to get credit for every single sale they are entitled to. We want our associates to have confidence in knowing we track everything, no matter what happens.

So what do we do?

We use the power of "cookie tracking" and have a backup CGI system, just in case a visitor's cookies are turned off, they are using an old browser which doesn't accept cookies, or they are using a version of Netscape which has a "cookie bug" in it (this is a little secret we learned from experience and hard knocks).

If we cannot put a cookie on their browser for some reason (remember, I said that about 20% of all people online cannot accept cookies in their browser), our software automatically backs up to CGI and puts the code right in the URL through CGI scripting. So it still tracks the visitor and sale. In other words, we track all the visitors and sales to the best of what technology will provide us to make sure every associate gets credit for the sales to which they are due.

Probably the most common method of tracking out there on the Internet is through cookies. But by using this system in many Associate Program sites, the 20% of visitors who cannot accept cookies get defaulted to the program owner's associate number and the associate who actually sent the visitors doesn't get credit for their sales.

This is a poor way of running Associate Programs because you have no idea how much the owner of the Associate Program is essentially skimming off the top.

That's why we use backup systems like CGI to make sure that our associates get credit no matter what. Every single person who comes into our site is tracked and our associates have a great belief and trust in us because we take so much effort to make sure that no sale goes into "limbo"… all associates get referral fees for every customer they send us.

This is one of the reasons we are so successful... we go out of our way to make sure our associates get credit for ALL of their sales. To be successful with your own associate program, you too must be super-reliable. If you don't come across that way you will not get the associates joining with you and you will not be looked upon as a quality Associate Program. We have been consistently rated as one of the top Associate Programs on the net so we know what we are talking about!

So why is all of this "software talk" so incredibly important?

The software your Associate Program owner uses is important because you want to receive credit and commissions for every sale you send their way!

If your Associate Program is utilizing mirror pages or sites... they are using very old-fashioned technology! Your associates are totally reliant on your ability to keep good records and to be totally honest in calculating their commissions. They can't get real time statistics... and have no way of knowing what works or what doesn't work unless you tell them (they can't track it themselves).

If your Associate Program utilizes only cookies, your associates are potentially losing 20% of their sales and referral fees (and if they are tracking offline orders… they may be losing more).

Would you join an associate program that had these problems?

Of course you wouldn't… and you can't expect associates to join yours if you have these problems.

You would want to look for associate programs which give you FULL CREDIT for ALL of your sales! And expect your associates to do the same!

Additionally having good tracking systems is a fantastic selling point when you are recruiting associates. You can assure them that they will get credit for all sales... and you can provide them with real time tracking so that they can test banners, text links, etc. to find out what works best for their site, in a matter of days!

If you are setting up an Associate Program, the software you choose will determine how automated you can get with your program. The more automated the better... instead of focusing on administrative trivia you can focus on helping your associates become wildly successful! Which means that you will be wildly successful!

I'll tell you all about what features you should be looking for in good Associate Program software in the next article.

To finish up this article, I would like to go over some important points, which have not been mentioned yet.

One is the importance of tracking the number of visitors from each associate, not just sales.

Your software program has to track visitors; as it has to track sales. If it doesn't track visitors neither you nor your associates can tell how many visitors are converting into sales.

It's very good for your associates because they can see how many visitors they brought in and how many sales have come from them. If they are only converting one out of every 700 visitors, they will get a little upset and will call you to go over the details on what they are doing wrong. This is a good thing! It gives you a good advantage because you are also seeing what associates are pulling really well... and you can call them up and find out what they are doing. Then you can help your other associates improve their sites, how they are marketing... and help them improve their conversion ratios to get them more money! And you want to do this because the more money they make, the more products you sell and the more money you make!

Another important requirement in setting up an Associate Program is to make sure that your Associate Program software can track through all of your order mechanisms. This means that you can easily track any orders you get by fax, by mail, over your 800#, and all of your online orders, including secure and non-secure orders. This is not a problem with the right software!

I just want to make sure that you are aware of how important this is... because some Associate Program software systems cannot handle this! Your associates aren't going to be very happy if you only track online orders but don't give them credit for any phone, fax or snail mail orders... so make sure you are tracking through all of them! (We will talk about software in the next article that can do this)

From the very beginning you are going to want to set up your Associate Program so that it is as automatic as possible. You don't want to be spending your time and efforts on looking after administrative trivia! Your time should be spent on testing and improving your marketing and on helping your associates become successful... not on filling out manual forms and dealing with manual tracking procedures.

It's also very important to make your Associate Program easy to join, and easy to use. You want to guide your new associate through the sign up process step-by-step. Make it very easy for them… all automated so that they can join your Associate Program within seconds and get all the information they need so they can become a part of it right away.

ABOUT THE AUTHOR: Derek Gehl specializes in teaching real people how to start profitable Internet businesses that make $100,000 to $2.5 Million (or more) per year. To get instant access to all his most profitable marketing campaigns, strategies, tools, and resources that he's used to grow $25 into over $60 Million in online sales, visit: http://www.marketingtips.com/t.cgi/892189

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