NOW Are You Going to Concentrate on Retention?
- Kath Blackwell
Part 2: THE WINDS OF CHANGE
Change is never easy - but it is often very necessary for survival. On July 10th, in response to the announcement of the new 1% acceptable charge-back regulation from Visa, Marc De of ARS (www.AdultRevenueService.com) posted this announcement on adult webmaster message board Oprano (www.oprano.com), "There are many factors involved in programs paying the high rate per sign-up they do now. These factors include $39.99 monthly charges and 2 FREE cross-sells per page rebilling at $30-40 per month. There are other factors as well, but it's these factors in specific I would like to address. Charge-backs occur for a number of reasons, but a lot have to do with very high monthly charges. Obviously these prices bring in more money, which allows a much higher payout."
"In an effort to reduce charge-backs, free cross-sells will become single micro $1 payments that re-bill at a much lesser rate. Much more importantly, monthly rates must drop from the rate of $39.99 to $29.99. Obviously this will drastically hit the top of line of many sponsors (those who choose to take the path of 'correcting' some of the problems in the industry). Because of this cut in revenue, payouts of $35 and $40 per trial will no longer exist... Payout will drop below the $30 range. Also, FREE trials (which ARS recently began offering) will no longer exist. These changes will take place in the coming days."
"Webmasters use this post for warning of things to come."
"Sponsors use this post as a support for you to follow the necessary trends to correct an escalating problem over the last few years. It's time to fall in line or it's time to fall out!"
Mike Price from Silver Cash (www.silvercash.com) posted the same day on GFY (www.gofuckyourself.com) a similar announcement. "Due to the new Visa regulations we are forced to make some changes to keep ourselves in line with these new regs and still make a profit to not only insure our longevity but the longevity of the industry as a whole."
"Epoch has in turn made some new regulations that we must follow to and make changes on our end. We will now only be offering 1 easy click on our join pages and there will no longer be free EZClick joins. Not only this, but the joins can be charged a maximum of $20 per month."
"In order to help reduce charge-backs there will be less opportunity for cross-sales and we will lower the monthly charge of $39.28 to our members to $29.28. This change will also have to [be] passed down in order to conduct some sort of profit.
"Silver Cash will be lowering payouts within the next week to $25 per join, and $30 per join for those sending over a certain amount per period."
"It's a time of change, and the biggest change this industry has seen to date. I'm sure that other programs will follo,w as there isn't much alternative."
Surprisingly to some, most webmasters posted in support of the lower payouts and lower monthly rates for membership fees. Predictable discussions ensued about alternative processing options, thoughts about the future and visions of the potential benefits or losses that could result because of these changes. However, the general consensus among the community is that it's "about time," and that it's "a good thing."
Peaches of VendorCash.com posted on Oprano, "As a webmaster, I certainly don't want to see lower payouts, but as a mortgage holder, I'd rather take lower payouts for a longer period time. Longevity is a good thing."
MikeAI of PureCash.com also posted on Oprano: "Free trials have always been a bad idea. They have been abused, as well as the cross-sales. We have brought this upon ourselves. I am very EXCITED about these changes."
KimmiKim of ePassporte.com posted on GFY: "My commendations to both Mike Price and Marc De for taking the leap and being the first to announce this. It's refreshing to see someone willing to take a hard chance and say it like it is."
PornKings of PornKings.com posted on GFY: "I have to agree with Mike, a lot is going to change this year with the new regs going to 1%. I would watch the sponsors taking actions to make sure they are compliant and taking the right actions to stay in biz. Because if your doing biz with programs that don't - don't get upset if they go under and you don't get paid out. We too will be making changes in our program removing our free trial programs that we just launched."
THE OTHER SIDE OF THE COIN
While most webmasters and company owners seem to be in agreement that changes need to be made and feel that ultimately these new rules will benefit the industry as a whole, not everyone is thrilled with the idea. Cries of outrage poured in on some boards, posts of mistrust and disbelief in the benefits of the changes - even a few posts by disgruntled webmasters who had already been kicked from affiliate programs for excessive charge-back ratios by companies quickly working to clean up their percentages. The cries of support were loud but over the coming weeks the cries of anguish and worry might grow even louder as webmasters begin to feel the payout cuts in their bank accounts.
FlyingIguana, a webmaster posting on GFY said: "Changes need to be made to the charge-back process... Visa and MasterCard aren't changing the real problem."
thefreakybeaver, also posted on GFY saying: "Someone commented that it's mostly fraudulent webmasters that cause the charge backs, won't they still do it if it's only $29.99/month to join the site as opposed to $39.99? So the change in the pricing for the site in general makes no sense to me. Now that some of the bigger programs announced their $10 less per sign-up, I think others will just go with this figure even if they could carry on their biz with only cutting $5 per sign-up but now they know they "CAN" cut $10 per sign-up because others are."
Monk said in a post on Oprano.com: "Looks like there may be a major redistribution of traffic coming... especially for programs see this as an opportunity to squeeze a little more out of its webmasters."
THE BOTTOM LINE
So basically, the bottom line in all of this is that change is happening now. Affiliate program owners must be ready to evolve with the new guidelines set by Visa and the subsequent changes set by the processing companies in response to the new Visa regulations. Webmasters must be ready to accept the ultimate changes in webmaster payouts, free trials and other things that have been taken for granted for far too long.
Change can be harsh - but change is good. For webmasters, taking the time to consult with your affiliate programs, check over your sites to make sure you are in compliance - basically dotting all the i's and crossing all the t's - will be worth it in the long run. For affiliate owners - making sure that you are in compliance with the Visa regulations AND the new changes that are being handed down from the processing companies will be essential to your survival.
Buckle up folks - it's gonna be a bumpy ride. Keep your wits about you, and continue to work harder and smarter than ever before. Those who pay attention to the details and work with the changes instead of against them will be the ones to survive this latest "shake up" of the industry.
PART ONE: The Customer is Boss
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