Residual Affiliate Programs - An Investment in Your Future
By Edward Gause

Have you heard the term residual, or recurring affiliate program and wondered what it meant? Many new affiliate marketers don't encounter this option in the beginning, but this is quite possibly my favorite type of affiliate program to promote. Why? Because with residual affiliate programs, you can make a sale once, but continue getting paid for that sale over and over.

A residual affiliate program pays you multiple times for one sale. Usually you need to promote a service like web hosting, or a consumable product such as vitamins. As long as the customer you referred keeps using the service or keeps getting refills regularly, you keep getting paid for it.

Sometimes the cost of the product or service you sell maybe a little more than others in the same category, but then again, you aren't given the opportunity to earn residual income with them either. As you can imagine, the cumulative earnings for this type of affiliate marketing can be massive. Things can and do start out slow in the beginning, but over time it adds up very nicely.

Let's look at an example. Let's say you choose to become an affiliate for a website hosting company which offer residual payments. So you start promoting that hosting company in whatever way you choose, just as you would with any other affiliate program. Using pay per click marketing, general websites, articles or otherwise, you start sending targeted traffic to your hosting company affiliate link.

Now let's say someone decides to get a hosting package through your link. As with any other affiliate program, you earn a commission from that sale. But here's the kicker: If that new customer pays their hosting bill next month, you get paid again. For the same customer. And if they pay again the month after that, you get paid again too.

If that customer stays with the same hosting company for a year and your commission is for example $10, you'll get paid $10 every month, earning yourself $120 per year from just one affiliate sale.

Nice right? Now what if you do that with 10 customers? Even better... how about generating 10 new customers every single month? That's where the true power - and massive income - is made with residual affiliate programs. It's like having compounded interest on an investment. Ten affiliate sales at $10 each is $100 a month. Add ten new customers each month and because you're also being paid for customers signed up in previous month, your income grows without you having to make more sales. In five months time you've gotten a total of 50 new customers, and you're making $500 a month instead of $100.

Now as wonderful as this all sounds, there is a new term you'll become acquainted with and you'll have to factor it into your overall affiliate promotions: Attrition. Residual affiliate programs work on the basis of recurring payments. The customer must keep paying for the service for you to keep earning from it. This could be a monthly membership fee, a monthly service such as the hosting example given above, or monthly refills on health supplements.

As long as the customer keeps paying for the service you referred them to, you'll continue earning money from them. A certain percentage of customers will stop a service or product in time though, and this is referred to as the attrition rate: How much of your customer base is lost due to not renewing, or cancelling, a product or service.

Many web based membership sites for instance, average only three months per customer. This means on average, every new member acquired only stays a member for three months. They then cancel the service. So you'll need to pay attention to the attrition rate of any residual affiliate program you choose to promote. If it costs a lot of money to acquire a new customer, and you can only count on them staying as a paying customer for three months, you'll need to do some math. Are you spending more to acquire them than you are making in the three months before they cancel?

Some services retain the customers for years. And when this is the case, you can safely spend hundreds or even thousands of dollars to get the affiliate sale because you know you'll make much more than that over the entire time they remain a customer.

Because of varying attrition rates, I always encourage everyone to use the product or service before promoting it. If you really love the service and it's really worth what you pay for it, your future customers will more than likely feel the same way and stay on for years and years.

If Residual Affiliate Programs sounds like something that would interest you and you would like to give it a try, check out the Ultimate Marketing Center at http://www.honest-marketing.com/umc. You'll find all the tools you need to establish an internet presense, great customer support and the opportunity to start building a nice residual income.

NOTE: Feel free to publish this tip in your newsletter, blog or website as long as you include the following byline:

About Author:
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Edward Gause is webmaster of the Honesty in Internet Marketing
and publishes the "Resoure A Week" Newsletter,providing useful
resources catering to the interests of novice internet marketers.
When you get some free time, visit:
http://www.honest-marketing.com