What is affiliate program to get going? From commissions to affiliate searches and hiring, we have you covered.
Starting and running a successful affiliate program can be daunting: you’ll need to recruit and train the right affiliates, decide on the right commission, market the program, and have an exit strategy for tracking it. You’ll also want to make affiliates adhere to your program policies.
How To Create an Affiliate Program for Your Company (And Maintain It After You Start It)? The beginner’s guide does it all.
What is an affiliate program?
A program that rewards content creators for sharing and linking to your brand’s site and pays an affiliate commission every time you convert a sale is an affiliate marketing programme.
With an affiliate program, you sign up content creators and entrepreneurs (bloggers, social media influencers, etc.) to advertise your brand on their website or social media profiles. Such creators will embed affiliate links – special, traceable links that take visitors to your site – in their posts. Then you will pay these affiliates a commission every time someone buys something using their affiliate link.
The affiliates make passive income, and you’ve got people you trust advertising your services. It’s a win-win!
Does an affiliate program work for your online business?
You might be a physical product seller or a digital subscription business, but chances are good that an affiliate marketing program is going to get the job done. But there are a few requirements that you have to provide for an affiliate program to function for your brand.
Some tips to think about when deciding to join affiliate marketing:
- Affiliate program — this is what you will need if you want people to link your business on their own sites and traffic straight to your website.
- Affiliates don’t sell your stuff for you. Instead, they’ll point and associate to products that you sell on your own online shop.
- You have to be willing to compensate affiliates with a cash bonus (or store credit) whenever they refer you a sale.
- Your item/service must be popular.
- You have to have good-fit affiliates – creators who have the same niche or audience as you.
Affiliate marketing campaigns can work if you have the retention of customers for your business.
- The more one customer earns you a repeat sale, the easier it will be for you to pay those commissions again and again.
- And since you won’t have to incur as much customer acquisition expense, you’ll be able to pay out higher commissions, and get more quality affiliates on board.
Affiliate programs are best for businesses with high margins.
Although these programs are adaptable to just about any business, ecommerce sellers and subscription-based businesses (including SaaS companies) tend to leverage affiliates most often.
That’s because affiliate marketing doesn’t work as well for service-based products and physical and digital products with high profit margins (such as software, online courses, hosting), but it does for service-based products and digital products. And if your product is a subscription or used often then even better.
As 57 marketers from our Referral Rock survey revealed, the best affiliate marketing is for these types of businesses:
- Ecommerce (80%)
- Beauty (77%)
- Apparel (68%)
- Tech (68%)
- Health (61%)
- Subscription services (61%)
How to start an affiliate program in 8 steps
Now that you’ve determined an affiliate program is right for you, you know how it works, and you’ve seen some of the benefits, follow this step-by-step guide to launch a successful affiliate program.
Here’s how to start an affiliate program:
Step 1: Set goals for your program
Like with all marketing programs, you’ll need to start by setting goals for your affiliate program.
First, you’ll need to establish the audience you want to reach.
- What types of customers do you want to bring in through your affiliate program?
- What types of affiliates will help you do so?
Next, set a few top measurable goals, or KPIs, for your program. This will help you know whether your program is successful. KPIs must be SMART: specific, measurable, attainable, relevant, and time-bound.
- Your main goal will be the amount of revenue you’d like affiliates to bring in per month, per quarter or per year.
- Set goals for conversion rates: How often do you want people who click on affiliate links to make a purchase?
- Consider setting a goal for the average order value (AOV) driven by affiliates.
- Also, set goals for the numbers of unique affiliate sales in a given time period.
- You can also set goals for the impressions, clicks, and leads you’d like affiliates to bring in within these timeframes.
Sales are most important, of course, but these other metrics will also be helpful in measuring your affiliate program success.
Step 2: Check your rivals’ affiliate programmes.
You’ve probably sat down and run some sort of snapshot on what your business strengths and weaknesses are in comparison to your rivals. So now let’s go ahead and check your competitor’s affiliate program.
Even before building one, taking a close look at what the competition is offering will let you know where you’re at and be able to market your program. You’re competing for affiliates, after all.
Here’s how you do an affiliate program competitive study:
1. Try to find 2 rivals that are affiliated with programs.
Even better, choose at least one company you are not directly competing with but whose followers you have (and that may have comparable affiliates).
2. Check out how every other competing program breaks down their affiliate commissions.
- What’s the action that sends an affiliate commission payment (a sale, a lead, etc.)
- Does affiliate get a commission of a percentage on the sale or is it a specific percentage per action?
- Is affiliate compensation paid out in cash or in credits that they can use to buy products of the brand?
- What is each brand’s commission percentage? Feels great or bad relative to other program commissions, and to their product price?
- How should each brand source affiliate?
- Are they themselves, or do they use an affiliate network to bring in affiliates?
- Do affiliates have to apply to join?
- How competitive is the application?
4. What is the affiliate program terms and conditions?
- What’s the policy of each brand that allow affiliates to share and post their affiliate link?
- What can an affiliate not do in a program?
5. You can do some research if you’re able, see if there are other facts about the competitor’s programs:
- Does each brand have training for affiliates if any?
- What promotions and branding tools do each brand offer affiliates (banners, graphics, freebies)?
- Is the brand only looking for affiliates who make a certain type of content or who spend the most time on particular social media platforms?
- How often does each brand contact affiliates?
- What about affiliate tracking cookies used by a brand? Are they cookie-based to send a sale back to an affiliate, even if someone didn’t actually buy immediately? How long are the cookies active?
6. Finally, run a SWOT analysis.
- What is each show good at and bad?
- What possibilities could you seize, that a rival show missed?
- What are the risks for each rival program for your affiliate program?
Step 3: Decide on the right affiliate commission
Learn from your competitive analysis results to plan your own affiliate program. You will design the commission structure or how you’re going to pay your affiliates, one of the most critical decisions you will make.
Although you may have read about different commission rules from other programs, only pay an affiliate if they sold a product using their link. (Don’t pay per click or impression, because you are going to be at the mercy of scammers!)
- You must first choose if you’ll pay a fixed amount per sale or affiliates will get a share of every sale. And you’ll also have to choose between cash or store credit. A percentage commission (which is deposited in cash) is the type of payment affiliates like best.
Then pick out what affiliate commission percentage you’ll charge. You want this pay-out to be comparable to other affiliate programs but remember: do not just one-up your rivals.
You have to take care of your own company too. Ask yourself how much you are paying for customers, how high is your retention and how much is your average customer lifetime value.
- How much is it usually to attract a new customer?
- How many customers are you retaining in a year?
- How much can you depend on each customer to generate?
Put together all of this data to get a commission that is attractive to new affiliates but also profitable.
Step 4: Choose the other major parts of your program layout.
In addition to your commission, you’ll also have the choice between:
- Where will you let affiliates share their affiliate links? What digital marketing platforms are available for them?
- How long will affiliate cookies remain active (how long will affiliates still be able to receive a commission once a visitor clicks on their affiliate link)?
- What other terms will your affiliate program consist of?
- Will you provide affiliates with promo codes for their followers, to drive affiliate sales?
- What are you going to differentiate your affiliate program from competitor programs?
- Will you have an affiliate manager for your program (either assigned or hired)?
Step 5: Start finding affiliates
What To Do When You Launch an Affiliate Program Now That You Have Your Own Program Model? Now you’re on the lookout for affiliates. Now you’ll have to choose between using an affiliate network and building your own vetted affiliate network.
Will you join a known affiliate marketer network?
You can get a pipeline of reps through an affiliate network that already exists and knows some of the best affiliates in your niche. And it can also maintain these affiliates relationships for you, because networks are usually liable for managing affiliates.
Will you form your own network of affiliates?
You can still monitor affiliates, and pay them automatically, with affiliate marketing software (also known as an affiliate marketing system or affiliate management software, if you prefer) even if you set up your own personal affiliate network instead.
Step 6: Screen for Affiliates and hire the best.
Once you have affiliate candidates, contact them to ask if they are interested in your affiliate program. What you want is authentic affiliates and not dupes. So sift through affiliates – both by hand and with business intelligence solutions.
you’ll also need to figure out how many affiliates you want to recruit. This will be dependent on how many you’d like to reach, and how exclusive you want your affiliate membership to be.
Below are some things you must do while screening affiliates in your shortlist:
- Visit their websites, blogs, and/or social media accounts to see if their style and voice align with yours.
- Ensure they’re regularly producing, and getting lots of interaction from their readers/followers.
- Ensure they haven’t had honest or dubious activity (such as spammy links) in their public accounts.
- Request prospective affiliates to provide a plan on how they will advertise your brand, should they get selected.
- If you can, ask them about any previous affiliate marketing experiences, sales performance they have a delivered for other brands.
When you’ve found the affiliates, you want to join your program, send them a custom affiliate recruitment email. This should explain what the program is, how the affiliate benefits (including commissions), and a little about the affiliate’s obligations. This is to persuade the affiliate to subscribe, and start a healthy and friendly relationship with the affiliate.
After affiliates opt-in to your program, tell them your program’s rules and policies, and make them sign an affiliate partnership contract so they can abide by them.
Step 7: Reward your affiliate team, and inform them regularly.
Get affiliates up to speed on brand and program basics, assign affiliates their own affiliate links, and share best practices for implementing and marketing these links. Give affiliates also marketing materials like banners from your company, photos of your products, or videos.
Remember though that affiliate partnerships are meant to be long-term, and must be kept under the microscope. Support doesn’t stop at training.
Notify affiliate partners of the most recent news and promos at a time that suits them. You want to be up to date on sales and specials, new products to market and affiliate program updates. Schedule a monthly webinar or Zoom meeting for that, or update in a private Slack, LinkedIn or Facebook group.
Plan on evaluating individual affiliates regularly via email, direct message, affiliates dashboard or even Zoom. Create checks in times and stick to them.
And tell them who to call if they have questions about the program. Decide whether email, phone, a web form, IM, or private discussion group is best for affiliates to get in touch with you on a per-order basis. Maybe you’ll even build an affiliate FAQ for the most common inquiries, to save you time.
Step 8: Monitor the performance of your affiliate program.
You’ll need statistics on how successful your affiliate program is. You’ll find these numbers in your affiliate program software or affiliate network.
Keep track of who are the most sales-generating affiliates. Also, evaluate if your affiliate program is achieving the quantitative metrics you established in planning like revenue, conversion, sales and AOV. If your program is not achieving these, it’s time to change your commission model or look at your affiliate pool again.
Get a program going for your business that is affiliate-friendly.
With all of this info about how to make an affiliate marketing program a success, you’re now all set to create your own affiliate marketing program. First, check the competitive landscape. And then create a program that differentiates your brand for the affiliate at a good commission.
And yes, get and hire the right affiliates, who will drive sales for your brand.
You need affiliate marketing software if you are creating an affiliate program for your own network. It gives you a low-cost program where you are in full control of your affiliate marketing program.