The Clickbank University Fiasco - Is Clickbank Losing It?
This blog is my follow-up on the recent excellent review and expose written by Kyle about Clickbank University on his site 'Ways To Avoid Scams Online'. Clickbank is not the benign leviathan in the affiliate digital product world that most people vaguely think it to be and it seems to be morphing further into a money grabbing machine rather than the ethical and impartial support service it should for buyers and sellers of digital products.
Kyle's Review
Having read the review, I think that it goes without saying that Clickbank University is not a patch on Wealthy Affiliate and should be avoided as Kyle has pointed out. It is also an unethical affront for Clickbank's sellers, who are marketing IM digital products on the Clickbank system, for Clickbank to then be competing directly with them with its 'Clickbank University' training product. This product has been promoted as training on how to create and promote a digital product on Clickbank along with all the details on Affiliate marketing for digital products, but this is in direct competition with most of its sellers in the IM niche. In terms of business practice, it is shady; but have their been any howls of complaint? Strangely no, in fact the opposite seems to be the case.
Why Were The Gurus Fiercely Promoting Their Direct Competition?
Something that Kyle did not mention that perhaps is an indication of the perceived power of Clickbank with 'Guru' IM marketers is the fact that Clickbank recently had the best of them trying to out perform each other in a competition to see who could get the most subscribers signed onto the Clickbank University' program within a set time frame. This was of course a major marketing bonanza for Clickbank as the heavies in the IM marketing game endorsed their product ahead of their own products and went head-to-head in trying to outsell each other. Hefty prize incentives were offered to play the Gurus against each other in a feverish marketing frenzy. Prizes such as a trip to visit their headquarters in the US to schmooze with management. Either these Gurus are so nonplussed in their contempt for the market or they are blind to the fact that Clickbank is syphoning away potential sales of their own products; or maybe they perhaps fear Clickbank in terms of their relationship with the company and wish to seem in favor of whatever current scheme management cooks up - in their interests or not - and this might indicate where the balance of power is badly skewed. Still, Clickbank is not the only platform out there, though it is the best known.
Is Clickbank Responsive To The Market Or Are They Market Makers To Their Standard?
Clickbank might be forced to reconsider their behaviour and practices if people refuse to have their products handled by them, but then this is assuming that the Gurus themselves have solid integrity and are scrupulously honest in their business practices (though I am sure many have convinced themselves that they are). We know this is not the case as many of us have lost money to bad IM service products or products with weak or no post sale customer support. It would seem that there is an unhealthy symbiotic relationship between Clickbank's need to make money and it's support for badly produced and supported products. While Clickbank makes it easy for bad products to be marketed and supports them, there is no industry will to make change, it is easy fast money for both Clickbank and the sellers.
A Need For A Code Of Ethics
While there is no real industry standard or code of behaviour, I would venture that Wealthy Affiliate sets a standard that we wish other service providers would follow. The thing is that being ethical and looking after customers means dedication and a long term profit vision: in for the long haul not the short-term gain. I think Clickbank should bare some responsibility for encouraging 'shonky' products and 'here today - gone tomorrow' business practices. More on this in a moment.
Seeing Many Big Name IM 'Gurus As They Really Are
I find this thinly packaged 'University' product really amusing but also sadly misleading for the poor first time newbie (having not long ago been one myself) who will buy in to the product because it is Clickbank but don't know about Wealthy Affiliate and who have fallen for the unscrupulous sell of some other vendor via a Clickbank product. My point here is that you would think that people would be asking themselves why a top 'Guru' with products on Clickbank - and I mean the top ones (better not name them) - would be pushing this Clickbank product ahead of their own on the same platform? I asked myself that and felt uneasy.
I also came up with another little 'litmus' test if I was still entertaining doubts about an IM identity and celebrity from whom I has bought a product. If a heavy weight 'guru' is openly pushing and preaching the virtues of the program Mobi (another reviewed scam on Kyle's site) then write them off immediately and STAY AWAY from anything they offer. They want your shirt! This program is another example of rigged theft out there and I know a number of people have been badly burned by this pyramid scam in a serious way. I was incredibly surprised to see some big names endorsing Mobi and by their association perpetuating a program that should have been shut down.
Finding Wealthy Affiliate AFTER Losing Your Shirt Is Disappointing But Not Too Late
Fortunately I did not fall for Mobi, but could have at an earlier stage. The point here is that people have lost considerable capital that if properly applied within the Wealthy Affiliate program would have given them a huge advantage. I think many find Wealthy Affiliate in desperation after they have lost what they have in free capital on these sham programs, promoted largely under Clickbank. They may feel they just can't go beyond a free account so this really hampers their recovery and progress towards success. We know the good news is that it is not curtains if you stick with Wealthy Affiliate, even when you have handed over your shirt to the gurus. It is part of our job on this site to help those in recovery after they have stumbled onto the program. Once people get on top in the right way they will become vocal about bad services and bad schemes. This will change the industry and save other people from losing money they can't afford to lose and should not have to lose.
Caught Up In Bad Schemes Makes More IM's Who Promote Bad Schemes
To come back to the point of responsibility in practices that seems to be lacking in some areas of Clickbank, I think that there is an issue here here with well meaning and sometimes desperate people that sign onto a Clickbank supported product and find themselves caught up in the mad approach to promote a bad product and so begins the cycle of learning how to be a bad practice IM marketer themselves. It is like a self perpetuating disease. They then become advocates of the same bad programs once they press that big shiny button and buy in. You feel committed and with no further choice but to 'give it all you've got'.
An Admission Of Madness From My Own Experience
An example of such a program is 5-Figure-Day which is supposed to be one of the greatest success stories on Clickbank. This is another marginal pyramid system built around "viral" lead building where you spend time and money getting people to sign on via 'supplied' websites (actually a squeeze page) and then work to get people that sign on via you to then do the same. You get their leads and then the leads of their leads and so on. Its suppose to be a rapid list building system which you can then promote other Clickbank products to. The problem is that all these subscriber leads will get bombarded and burnt as you try to float to the top of a shared pool of subscribers. Of coarse the owner gets access to ALL the subscribers in the system while you pay a subscription to be a part of this 'bonanza' and pay more money to drive more traffic and leads. He ends up with 10's of thousands of leads if not hundreds of thousands and has been paid subscription fees by the people who have given him that massive list base. Great scheme....for him and Clickbank and in terms of the 'double dipping' it reminds me of 'Clickbank University' being a bonanza for Clickbank when fiercly promoted by its competitors in Clickbank while they are still selling their own competing products via Clickbank. 5-Figure-Day is not really very ethical and also encourages more marginally unethical practices that sit close to being called spamming. Now I will admit to buying into this one and spending thousands driving traffic from other list providers to create my own substantial subscriber list ....but from this I got one viral lead and no subscribers. I worked diligently on this program committing more and more funds and effort. I was told the traffic I bought from other lists was probably dud and expose traffic. Now I know the program was the dud and I notice that the owner announced he was relaunching the program again.
Clickbank Danger, Google And The 60 Day Guarantee
The danger with these Clickbank programs are that you take on the worst of the 'Wild West' attributes in IM marketing in a desperate attempt to make it all work and save your investment. It becomes self perpetuating and the IM industry deserves the bad reputation it has with this sort of encouraged behaviour and inflated marketing hubris in the IM industry being allowed to go unchecked. I might also add that Google looks very sternly at these schemes and will not promote them via their Adsense program. Clickbank could be taking a lead and setting some industry standards but it would seem the focus is only on short term profit rather than responsible vetting for standards. The most Clickbank really offers it's buyer customers is the 60 day refund guarantee and without this I would think Clickbank would implode. The refund system is still no excuse for allowed and encouraged bad practice and it still leaves customers vulnerable to scams where marketers refuse the 'no questions asked' refund under the 60 day rule and this has happened to many, though Clickbank will adjudicate if there is a disagreement, and sellers can be 'red carded' for high refund levels.
Comparing Wealthy Affiliate and Clickbank's Guarantee For Products It Offers
Compare Clickbank's refund protection policy on products with Wealthy Affiliate where you get to drive the WHOLE program for free and can still retain membership in the basic training program at no cost if you feel you don't want premium membership at the beginning. Of course Clickbank are making a guarantee for third party products they are handling but the issue here is that the guarantee is often to cover really poor products and service with money demanded upfront that people would avoid as too high a risk without that guarantee. By contrast Wealthy Affiliate uses ethical and responsible marketing where the customer is considered first and offered full use and open access at not cost for a period to see exactly what the program offers. The owners know their long-term goals and profitability is in looking after and encouraging new members rather than ignoring them if they don't upgrade to premium at the very start. I think a great test for a good product is where the owners actually do contact you and express their desire to help you rather than just being invisible. Its good old fashioned personal service. With Clickbank I always feel like I am dealing with an impersonal bank like institution.
Commission Account Integrity At Clickbank - Houston, We Have A Problem!
Another issue Kyle mentioned is the problem of retained commissions for the odd sale an affiliate may have made promoting a Clickbank product where the amount is too small to hit payout threshold. Clickbank have a really nasty practice of eating away those commissions with expensive account keeping fees which would make any fee voracious bank proud. It does not seem to have occurred to Clickbank that this has a bad psychological impact on the new affiliate that has tried a number of programs on their system and managed by many hours of work and a little luck to make a few sales. In my case I had a small amount of $86 dollars after expending about $3,000 plus dollars on programs and paying for traffic etc. I cut my losses and looked for a better way and then stumbled upon Wealthy Affiliate. My intention was to return to Clickbank and look at other non-IM affiliate products for things I wanted to promote from Clickbank on websites I would later set up under the Wealthy Affiliate program. I figured I could cash out my meagre earlier results at a later stage when I had myself reorganised and operating successfully. Clickbank does not see it that way. Once your account is dormant, the fees kick-in and start eating away at the amount and the fees increase! See my account shot. I was shocked when I happened to look at my Clickbank account one day and saw the fees.
After Kyle's review I went back into my old Clickbank account again and studied their accounting terms. I found that they set the payout threshold automatically on $100 as a default but that there are options you can choose for payment on smaller amounts. I did not know this and it is not really explained. You can choose payout figures as low as $50, $25 and $10 and these amounts can be paid weekly but they will take a $2.50 processing fee each time (just like the banks). I reset my payout figure and worked out I can reset again on a smaller amount later to drain the commission credit rather than handing all if it over to Clickbank. I will have to pay them the fee each time, but it is better than nothing. You may think "he is really going to a lot of trouble for measly 65 bucks" but this is not the point. There is an issue involved here where I see this as soft theft. Those small funds are symbolic of good faith and a lot of time, cost and and great effort. I did not pour money into the pockets of Clickbank and marketers on their system just to then have the privilege of handing over the small results of all that effort and cost to Clickbank. You can see how quickly goodwill and trust is being lost here, but do Clickbank see this or do they even care? Compare this with the trust and goodwill that is at the foundation of the Wealthy Affiliate membership.
Why Do Clickbank Punish Bruised And Confused Newbies?
This approach by Clickbank seems crazy to me. I would approach customers and ask them if they plan to go on with their account (a bit of good ol' personal service) and if so I would leave the money in the account intact for maybe 6 months or even a year, otherwise I would thank them and offer to pay them out the balance, less whatever fee charged for one payment. I have trading accounts with brokers in which still have small sums in them after years...because they are working on the basis that I might just return one day and start using their services again, if the account is still there with that small margin. They send me the occasional friendly "how are you?" email to remind me about them and that to my mind is really smart. I have the account, so it would be easy to pick up where I left off rather than start shopping around for another broker I don't know and have to go through the whole hassle of setting up again. This approach would seem reasonable for Clickbank customers that have been burnt but don't want to give up and are trying to find the right way such as those lucky enough to find Wealthy Affiliate.
Clickbank Needs Real Competition
Clickbank need some real competition. They need to hear some serious feedback and understand that they should not assume that people will always choose them first by default meaning they can do what ever they please to both buyers and sellers. As with the natural world the giants among animals are often the ones that find it hardest to adapt quickly to changing conditions and become the species that can become extinct. Clickbank would be wise to think carefully and review their policies for both sides of the coin in the IM market: buyers and sellers.
My Admission
I have aired some of my own personal experiences and, in hind-site now realise these decisions appear like really 'dumb-ass' mistakes. I think back on it and I feel pretty stupid, but until you discover Wealthy Affiliate, it is hard to know how bad a lot of these scams really are. If you have been burnt on Clickbank, I hope my tale and admission of succumbing to the scam sales pitch has made you feel a little better :)
Recent Comments
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Thanks Larry. Glad you found it interesting. It's nice that Wealthy Affiliate operates outside of the Clickbank circus. There are a few non-IM products on their system I have found that are quite good but I really don't like how they treat their seller/partners on the commission payment side of things. That makes me think twice now about promoting anything they handle.
It does make me feel better and it makes me want to go see what I set my Clickbank money release amount to be. I think it was $25.00, but I am not sure. What an education you have given me. I fell victim to a lot of scams before finding WA. But I regard it all as education. In each case I learned something, even if it was what NOT to do and went on from there. I even tried Clickbank University. But nothing about it worked for me. I don't even remember it now. WA is so far superior to anything I have done that it is hard to even explain the differences. Thanks for that edifying blog. I appreciate the work you put into it.
Sheila
Hi Sheila, Thanks for the comment and appreciation. I view things now as you do. I sort of see what I paid and experienced as my education cost too. I think the difference is that here at Wealthy Affiliate we have made a conscious choice not to become like the 'gurus' but to try and give our customers and visitors true honest value with less hype. You might want to go back into your Clickbank account and change the settings so you can get your money out:
- Open your account.
- Click on the 'settings' tab at the top.
- Scroll down to the 'Payment information' box.
- Look on the right in the blue gray strip a the top of the box and you will see a tiny 'Edit' prompt. Click on this
- You will then be taken to the 'Payment Information Editor' and in the top box you will see: 'Payment threshold', below that 'Payment Method' and below that 'Payment frequency'.
- If you still have $25 in the account then click on payment threshold and choose $25. They will pay this after deducting $2.50 according to their information, so you should receive $22.50. If you have less than $25 now then adjust down to $10 and take out two payment of $10 and you should receive $7.50 over two payments having paid them $2.50 each time. I think this is how it will work out and unfortunately they will take the remainder balance with their fees system if your account is inactive.
This is really sneaky of them as they set these threshold amounts that enables them to skim small amounts where credits are not exactly according to the threshold amounts and these amounts will be eaten away by fees. I am sure they would argue that they set thresholds for accounting efficiency, but this is for THEIR system convenience not the customer's and I am sure that over thousands of accounts it is a nice side revenue skim for them.
Hope you are able to recover something from them for all you effort.
Take care.
Eric,
Thanks for all that good info. I never made the first penny with them so they didn't get any of my money. Unfortunately I never got any of theirs either. Yes, it does sound sneaky and underhanded as an accounting method, and meant to line their coffers and not yours. I didn't get that when I signed up with them. I guess it would have hit me when I started getting paid. I didn't last long with them. I found their training to be poor at least for a newbie--we're talking total newbie here--and so I left them. I signed up when it was expensive to sign up too, so they got a lot of my money that way. They wised up pretty quickly and the price of admission went down, down, down,in stages, but it was too late to do me any good. I think they were all about the money from the first. It's really sad. They could have done something really special. And they blew it.
Hi Sheila, Yes they did blow it. People don't forget when they feel they have been conned. Clickbank and the gurus survive on the stream of newbies that seems never ending, but like all booms, eventually the bust comes. I think perhaps it might happen the way of the hundred monkey syndrome. When enough people have been burnt and learn to stay away from the way scams are presented and platforms on which the scams are promoted, then a critical mass maybe reached where the majority of people become aware. When this happens Clickbank and many of the gurus will start to find the going tougher and will have to change the way they do business and this will be for the better.
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Great post Eric, and Click Bank university even has a special running right now.
That's interesting. They have had the Gurus do the big pressure sell at full price, now the cut-price follow up. It's quite brazen really. No wonder a lot of the seller names on Clickbank with the high pressure sales pitch see no reason to do things differently. I wonder how long the program will last?
What I like about the owners of Wealthy Affiliate is that they have one solid product in the IM industry that they keep working on improving the one excellent product and it has been around awhile now. Many of the Clickbank sellers have many products and churn out new ones repackaging the same old ideas as new again and with poor support.
It's obvious! How can you give the top end support they all promise on each product with their resouces and attention being increasingly stretched thinly over multiple products. I can think of one big name who is a major example of this game.
Wealthy Affiliate, as and alternative, leads by example.
You are so right Eric,so right indeed.