When we launch a new product, we all hope its going to be a runaway bestseller. More than that, most of us aim to produce a product so remarkable that it generates rave reviews and achieves cult popularity. You may very well achieve all of these objectives with your product launches.
But, beware of a characteristic of the ClickBank system that may throw these aspirations into jeopardy - the 90-day refund rule.
Most merchants agree that ClickBanks rock-solid refund policy adds a great deal of credibility to their sales pitches, enabling them to make sales to even the most wary of online shoppers. The hassle-free refund procedure is also the key factor behind ClickBanks exceptionally low chargeback rate. ClickBank customers have no need to ask their banks for chargebacks, so ClickBank keeps its merchant account in good standing and we merchants all save money on chargeback penalties.
But, despite its attractions, the ClickBank refund rule is also a source of blatant abuse by a minority of dishonest buyers.
However good a product may be; however much your genuine buyers love it, there will always be a small percentage who ask for refunds. Dont be disheartened. In most cases, this is not a reflection on your product or your competence as a merchant. It is simply an exploitation of the ClickBank refund system to get something for nothing.
Around 5% of my ClickBank sales result in refunds and, judging by my discussions with other merchants, this figure appears to be about average. I have numerous glowing testimonials from satisfied customers, but there is still the occasional buyer who is, seemingly, impossible to please. Ironically, I have never yet issued a refund to a buyer who has offered a reason for being dissatisfied. Is this normal It suggests to me that the problem lies not with the product, but with the morals of the buyer.
With the purchase of a digital product you can, if you choose, keep the product and get your money back. Online theft just doesnt get any easier than this.
ClickBanks merchant community has suggested various ways to tackle this problem. The most popular idea seems to be that ClickBank should introduce a rogue customer list, identifying serial refunders by their prior purchasing activity. Of course, the list would be confidential - merchants would simply need the option to specify whether they accept purchases by buyers in this category. This solution is not without its own problems, especially the challenge of accurately identifying buyers from one purchase to the next. With multiple credit cards and multiple email addresses, it is relatively easy to bypass the banned list, simply by creating a new online persona. But, at least this initiative offers hope of a solution to the problem.
So far, ClickBank has not announced on any plans to update its refund policy or introduce controls to protect its merchants from this type of fraud. Until something changes, merchants need to adopt a pragmatic attitude to the dilemma of sham refunds. As frustrating as it may be to see our profits willingly handed over to fraudsters, we should remember that the reassurance offered by the refund system probably pays us dividends many times greater, in the form of increased sales.
About The Author
Copyright Tim Coulter. All rights reserved.
Tim Coulter is a consultant and software developer who helps netpreneurs to harness marketing technologies.
He is also the author of ClickBank - The Definitive Guide The Ultimate ClickBank Tutorial & Reference Manual.
The core principle of affiliate marketing is that the referring affiliate earns a commission if a referred prospect makes a purchase. Any affiliate program that aims to succeed in its recruitment efforts must uphold this principle, regardless of whether the prospect buys immediately, or delays her purchase until some time in the future.
To fairly and accurately distribute affiliate commissions requires a database that maintains a list of the relationships between prospects and the affiliates that referred them. Ideally, this database would be centralized, hosted as part of the software application that manages the affiliate program. But this approach would only be feasible if web visitors could be automatically distinguished from each other, using a unique and permanent identity code.
Unfortunately (for affiliate program operators) web users prefer to surf anonymously. Web browser software is designed to allow a surfer to visit any website without leaving a personal identity trail. So, affiliate programs need a less intrusive method of tracking the associations between their members and the surfing public. The solution adopted by most programs, including ClickBank, is to distribute the database throughout the internet, storing a tiny fragment of information on each prospects computer. They implement this using cookies.
ClickBank uses a mechanism known as the hoplink system to record cookies on a prospects computer, storing multiple affiliate referral relationships in a single cookie. Every time a prospect is referred to a new merchant, her existing referral cookie is updated to reflect the association between the new merchant and the affiliate that referred her.
The hoplink system is invoked automatically whenever a prospect is referred to a ClickBank merchant by an affiliate. When a prospect clicks on a referral link, she is initially directed to ClickBanks hoplink server. The server, in turn, sends her the referral cookie and immediately redirects her to the merchants website. The destination of the redirection is known as the merchants landing page and is configured within his ClickBank account settings. A landing page is a merchant web page designated to accept inbound affiliate referrals.
The hoplink system is implemented by two architectures that operate in parallel. The original architecture, known as the regular hoplink system, has been in operation since the launch of ClickBank, but it has come under criticism for its inflexibility and the ease with which it allows commission theft. Announced in October 2003, the enhanced hoplink system aims to overcome the security shortcomings of the original system and to provide support for a range of new features that will improve the effectiveness of the affiliate system.
Aside from improvements in security, the enhanced hoplink system is designed to capture additional data that will enable detailed reporting of affiliate referral statistics and merchant conversion rates. Perhaps most significant of all, it provides support for referral links to multiple landing pages at the merchants website - an essential feature that has previously been noticeable by its absence.
Affiliates with established businesses that use regular hoplinks are free to continue without modifying their existing configurations. But to exploit the richer functionality resulting from ClickBanks ongoing system development, it is worth upgrading to the enhanced hoplink format.
About The Author
Copyright Tim Coulter. All rights reserved.
Tim Coulter is a consultant and software developer who helps netpreneurs to harness marketing technologies.
He is also the author of ClickBank - The Definitive Guide The Ultimate ClickBank Tutorial & Reference Manual.