Nuts&Bolts: Case Study
Nothing Automatic About Affiliate Sales
May 2007
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Solution: Develop relationships with bloggers and other online influencers, using product education and incentive plans to generate word-of-mouth buzz.
Results: Sales for Q4 2006 increased 10 times over same-quarter sales in 2005.
For Dean Rist’s money, few channels deliver ROI like affiliate marketing. Which is why one of the first things he did two years ago after being named the director of direct marketing at iRobot, a Burlington, Mass.-based manufacturer of robotics for consumer and military activities, was to start planning an affiliate marketing strategy.
One of the challenges facing
iRobot, says Rist, was that its brand was not known; it had just one product in early 2005, Roomba, a robotic vacuum, which had achieved a limited amount of notoriety. By the fall of 2006, the company had launched Scooba, a wet floor care robot, and DirtDog, a floor sweeping robot. “Using the affiliate channel to build the marketing base was key,” he explains. “You can have a hundred, thousand affiliates … putting your advertisements out there. It doesn’t cost anything unless there is a sale generated, which I think is the biggest plus with any marketing campaign. At the same time, you’re getting the brand name out there for a very high ROI, if the prospects do purchase.”
To generate that large pool of affiliates, Rist selected Performics, an online marketing services and technology firm in Chicago, to guide iRobot’s efforts. Analysis of the product line and customer base directed the company to seek out bloggers, affiliates with a history of generating buzz, product reviewers and other online influencers with whom to develop relationships. These partners were given iRobot product samples so they could learn the benefits firsthand and develop sales copy in their own words.
While buzz is great for raising a brand’s profile, more sophisticated targeting is needed to drive sales across a wider audience. To support iRobot’s online merchandising, the firm talked to affiliates individually to explain the various categories in which its products might fit as well as the different market segments to pursue. For example, says Chris Henger, Performics’ vice president of affiliate marketing, instead of all iRobot products being pigeonholed on a Web site’s page about housecleaning tools, the firm worked to get the Roomba for Pets version posted in the pets section where pet owners would see it.
They also looked for nontraditional avenues via which to sell product. “We typically focus on more of the high-price-point products, because that tends to be what sells better online,” Rist states. But, he adds, iRobot offers refurbished products at a discount, which requires a different strategy. In this case, Performics found Woot, an e-tailer that promotes one-day sales for one product at a time; all the units sold within hours of being announced.
By going beyond the basics of affiliate channel development, iRobot scored a tenfold increase in sales from the last quarter of 2005 to that of 2006. But Rist was pleasantly surprised to see another positive outcome: “This is the first time with my affiliate program where it’s generating more revenue than my paid search program. From my background and experience, I’d always expect the search program to perform better—and not that it’s not performing well, but ... the ROI is very strong for the affiliate program.”
—Hallie Mummert
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