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Interview with super affiliate Stephen Hewitt who sold his business for over £3 million

I’ve known Stephen Hewitt from Credit Card Expert for some time now. In December of last year he did a deal to sell his business for over £3 million. I thought it would be a source of inspiration to ask him a few questions and ask him just how he spent his money :) 

And here’s a link that shows a brief statement about the sale of his business.

I think we both started out in Affiliate Marketing about the same time, 2000/2001. In fact I remember swapping links on some of our sites. When exactly did you launch Credit Card Expert?

I launched Credit Card Expert way back in the middle of 2001 – seems like a lifetime ago now, link swapping like crazy with everyone on the affiliate marketing forum!  In the early days I even remember giving you some SEO tips for UKOffer.com although I’d imagine you’d be the one giving me tips now.

What’s the background to the site? Did you see a gap in the market for a quality credit card comparison site?

I suppose I came to it naturally through my job.  I’d always been interested in online marketing and tried to do as much of it as I could when I had the chance and I eventually set up the marbles credit card affiliate program which was one of the first credit card affiliate programmes.

It was pretty successful in its time and it was driving a lot of business but I just couldn’t get past the fact that most of the affiliates were making far more money from the marbles credit card programme than I was getting paid to run it, so I jumped ship and gave it a shot myself.
Another thing that gave me the impetus to go for it was there didn’t seem to be any real quality to the sites that were doing well and I thought if they can do it, I can too.

After that I threw up a few banners and some text on a crappy looking page and I was away.

I remember that within a short period of time you were always at the top of Google for some really competitive “credit card” terms, how did you achieve this?

Even back in 2001 there seemed to be a general attitude that the real high worth key phrases were too competitive to rank for, so anything to do with finance or gambling was too competitive to make any impact in.  Luckily I knew so little about SEO at the start that I didn’t realise what I was taking on.

I just started to concentrate on a few smaller UK specific keywords, read about SEO like crazy and tried to learn as much as I could.  It probably took about 6 months to rank for anything at all and around 14 months to start ranking for the top generic phrases like “credit card” or “credit cards”

Back in the day it was a lot easier rank well and it was all about simplicity, consistency, good content and of course incoming links and the good old fashioned link exchange e-mail torture!  It a truism though that the better the site got in terms of content the better it ranked.

In the 6 years what changes have you seen in affiliate marketing?

Everything is so much more professional now.  Take the A4U forum as an example.  When I first started posting there it was just a bunch of guys moaning that XYZ was late with commissions and now it’s been built into a very professional business organising successful conferences rather than organising drinks in the pub!

This professionalism seems to extend to the affiliates as well with many now having staff and offices which is fantastic.  For me personally though, I do hope there remains room in the future for the guy or girl in the bedroom to build a business online and make a real living from it,  as that was always the best thing about affiliate marketing for me – anyone could do it, you didn’t need a whole lot of cash and the harder you worked the more money you made.

How have the big finance comparison sites (MoneySupermarket etc) affected Credit Card Expert?

Of course they are major competitors but in the main I feel they have helped the smaller comparison sites.  They are driving such big volumes that companies could not ignore the CPA model which in turn helps them realise what affiliate marketing could do for them.

As well as Credit Card Expert your company Result Online runs some other sites, how many in total? And in what sectors?

Probably about 5 in total although they were all smaller sites, mainly in finance and broadband.

So how did the deal with Media Corp come about? Who contacted who?

I just received a random e-mail “would you be interested in selling your site?” as I often did – mostly I ignored these, but on the off chance I sent a reply and it turned out the guy was broker for Mediacorp. 

How long was the process of selling your company? Was it a very complex process?

The initial discussions went very quickly and we had something agreed in principle within a couple of days.  The actual deal took around 6 weeks to complete.  Luckily mine wasn’t a complex business so after a few meetings and getting the due diligence done it was all wrapped up without too much fuss.  As always there was much tooing and froing about some of the details but generally it was pretty smooth.
The hardest part was actually deciding to let go after 6 years of building the business up, definitely one of the hardest decisions I have ever made

You sold the site for £1.57 million cash and the potential of another £1.5 million over the next 3 years based on the companies’ performance. What was the first thing you did when you received the £1.57 million?

The deal completed just before Christmas so the first thing I bought was a replacement engagement ring for my wife to replace the Argos special I got her the first time round!

How did the valuation of the company come about?

A combination of factors but the company sold for a pretty low multiple of profit.  I wanted to be realistic about what I could achieve given the inherent level of risk involved in a successful affiliate site while still getting value from a very profitable business.  At then end of the day it was all about how happy I was with the deal rather than could I get more or negotiate a better price.

I believe the terms of the deal are that you stay on as the Managing Director for 3 years. How does it feel to be employed rather than self employed?

It’s certainly a big change after working for yourself for so long but it is enjoyable to be working with other people again, sometimes as an affiliate I did feel like a bit of a shut in so it makes a nice change to get out once in a while.
I work in London 1 day a week and the rest from home so it’s not a huge lifestyle change.

Have you had to make any fundamental changes to the affiliate model of your site since Media Corp?

Of course there are certain synergies in the new business that mean the affiliate model is not the only revenue stream we use but it certainly remains a core part of the business.

What are your plans for the future?

To keep building Result Online and in the immediate future launch some new sites in some new market sectors.

What are you listening to right now?

I have the worst taste in music imaginable - Rhydian from the XFactor

Thanks to Steve for taking the time out to have a chat with me. Personally I’ve never sold any websites (well not my main sites, just smaller ones) so I always find this topic interesting, just to see what kind of money is out there and who the potential buyers are.

What I’m listening to right now: Michael Jackson - “Let Me Go”

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Friday, November 23rd, 2007 at 8:05 am and is filed under Affiliate Marketing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.