Is It OK To Profit From Rejected Affiliate Leads?

Here’s an interesting issue.

James is an affiliate who sends a company leads to a page where the prospect shall complete a form requesting for – something free. Once the prospect does that and is considered a ‘good’ lead, James gets paid his commission. This is a pretty classic cost-per-action campaign or pay-per-lead affiliate program. Nothing wrong with it right? But what if…

The lead is ‘rejected’ by the company. Maybe because the form wasn’t complete or the prospect did not complete all the required steps because they changed their minds. The prospect doesn’t receive his freebie and James doesn’t get paid for that lead. However, unknown to the prospect and James, the prospect’s contact information is not discarded but actually saved into a ‘rejected leads’ database or mailing list.

Soon, the company begins to send the ‘rejected’ prospects some other offers and related emails. The links in the emails do not carry Jame’s affiliate IDs and cookies only last 30 or 45 days. Eventually, James is totally out of the picture. Yet, the company has gained a lead that James sent for free.

We’ve been cavalierly told, this is standard practice everywhere, giving names of large Internet stores as an example. Well, that may be true but does ‘standard practice’ make it OK though?

How do you handle it?

Why is it OK?

Why is it not OK?

We’d really love to hear your thoughts on this.

Photo by Ali Farid

Used Towers

I completely understand why many people would think James should get paid since it was, after all, his lead that made the company money. But think about it, if someone didn't want to go through with getting something for free then what are the chances that they're actually going to end up buying something? I'd be willing to bet only a tiny fraction end up buying anything and a good percent probably mark the company's emails as spam. They didn't complete the form, they don't want the emails. In reality, James probably isn't missing out on much unless he's sending $1,000+ leads with a good percent coming to him in commissions.

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How to Speak Japanese

"The affiliate is not told beforehand that rejected leads will be followed up with"

Ok, that is actually what they also do with valid leads.
Do you have proof that the don't store an affiliate ID in their rejected leads DB?
Even though they send out links w/o an affiliate ID they might be able to match the feedback from those followups with the original affiliate.

Just try it by filling out the form yourself (and leaving out some important data to make it an incomplete submission) and wait for
a) the lead getting rejected
b) the followup by the company
c) then act positivly on it like an accepted lead would do
d) check if you get a comission

I once acted as an affiliate where the merchant sent out annual reminders of new versions for the product. From the mail you couldn't see that it was an affiliate link - it was just a plain link. But when the conversion happened, I got the credit.
So its always worth to a test and also to get clarification from the affiliate manager. If their rejection rate is too high and they confirm that the will not credit you for converting traffic from these rejections, you should leave.

A way around this might be to host the form yourself and only send perfect leads to the merchant. Set it up in a way that you also keep the information and build a mailing list out of this.

Lynette Chandler

Naturally, I am not privy to their records, so I cannot prove if they collect the the affiliate ID or not. However in a forum, a representative pretty much confirmed that the emails sent do not contain affiliate information. The affiliate 'James' who did question it did in fact do all you suggested. Filled out himself etc and that's really how he found out. He wouldn't have known about all that otherwise.

You do give a great suggestion - building your list first before sending a lead directly to the company.

I see all your points so far. As a business owner a lead is a lead is a lead and should be followed up with. On the other hand what does not sit right with me is:

1. The affiliate is not told beforehand that rejected leads will be followed up with. I know many will not agree with me on this point but I think it is important an affiliate knows because they may be staking their reputation on recommending this service and when the prospect does not get what the affiliate told them they might get and then receive all kinds of followup offers then the affiliate loses credibility with the prospect.

For James, the loss is more than money. If it were me, I really don't mind the loss of a commission as much as I mind losing credibility. Money can be made other ways. My credibility or the strength of my brand however is not so easy to rebuild.

2. I happen to know the reject rate of this particular program is very high. This makes the affiliate question the company. How do they know they aren't purposely rejecting the lead just so they can get a free lead without paying the affiliate?

Anyhow. I am still rather undecided about the company. In our company, we do mail leads that affiliates send us and we also capture the affiliate's ID in our mailing list. This way, whenever we email the customer with a link to our products, the affiliate's link will be used. We think it is only fair we help the affiliates out.

Jim

Those leads are doing no one any good. As a a business owner i would follow up on rejected leads without much guilt

Vik Tantry

It's definitely not a good arramgement. However, it appears the agreement is payment for accepted leads and the company is right in not paying if they don't accept the lead. Using it later on for other purposes was not in any agreement and so it becomes a freebie to the company. What may be more fair is for the company to pay a base price for the effort expended by James to get the leads and provide him with an added premium once the lead gets accepted. In this way, James gets paid back his costs and gets his "profit" once they accept the lead. Companies shy from this deal because people could pass a lot of junk information and it would increase the company's costs without gaining anything in the process.

Mary Blackburn

That is just wrong on so many levels. The company is going to eventually profit from James' lead and James is going to get nothing for his hard work and/or expenses.

How do you handle it? I don't know, but it certainly isn't fair to the affiliates that promote for those companies.