How To Build A Profitable Affiliate Marketing Program
If you are searching for a distribution strategy to help you effectively reach target audiences then the first thing you think of could very well be social media.
But, when you think about it, that could be turned off at any time.
So, while you shouldn't ignore social media (and all the rest), there is an alternative when it comes to reaching your target audiences where they already hang out. And that alternative is creating an affiliate marketing program of your own.
Of course, that's easier said than done! But lucky for you, we've put together this handy resource to guide you, show you all the secrets of building profitable programs, and help you avoid the mistakes that other marketers make when building affiliate marketing programs.
Without further ado, let's dive into the proven strategies that you can use to build profitable affiliate marketing programs.
Here are some of the secrets of the world's top affiliate managers:
1. Find Out What Your Competitors Offer their Affiliates and Determine What is Realistic for Your Own Company
You need to be super competitive, so do your research and study what the other offers similar to yours are paying. Always aim to give your affiliates the most commission possible because the more you can pay them, the more traffic your affiliates will send your way.
But, you should also consider that your offer does not leave your business in the red. In order to do this, you have to know how your offer converts so that you can make accurate decisions pertaining to how much you can pay out.
Some vendors go negative on their first sale because they know their back-end will do well and they can recover their revenue post-transaction or even on a continuity basis (If you want to understand how this is possible, just read our previous post on the 7 Tips for Growing and Scaling an Unstoppable Business).
By knowing your customer's lifetime value, you will be able to make the best decisions when determining the payout. Also, when deciding on commissions, leave yourself some wiggle room so that you can offer contest prizes and commission bumps without losing money.
2. Be Transparent with Your Affiliates About the Payment Structure
It's important to make sure that your structure for the commissions and pricing is very clear to all your affiliates and that they are clear on all the details.
What happens in case of refunds?
Who gets paid if two affiliates send the same customer?
And so on...
You need to discuss all these things before engaging. If possible, put all the answers together in whatever format is convenient (PDF, PowerPoint presentation, etc).
Make sure that it outlines all the parameters and send it to all potential affiliates. Again, no need to reinvent the wheel with this. Just check out a few affiliate payment structures from others in your niche and use them as a guide in creating your own.
3. Accommodate the Payment Schedules that Your Affiliates Want
Speed of payment is an extremely powerful motivator.
Your affiliates should be able to request any type of payment schedule (within reason) and get their money on time. While this may add more logistics to your work, it will help you to avoid a common mistake that some affiliate programs make.
A lot of affiliates turn their backs on successful programs because of a lack of reporting, late payments, or not receiving payments when they request them. Remember, often times the affiliates are investing their own money into running your offer and they expect to get paid when appropriate.
4. Create A Plan for Rewarding Your Top Affiliates
While it's a great idea to reward those affiliates who perform the best, it's never a good idea to assume that you know exactly what they want.
Some affiliates (most, really) prefer cash prizes or bonuses to the physical ones you may want to give them. Try to pay your top guys faster since they are the ones who drive the majority of your revenue.
Yet another huge motivator is helping your highest performing affiliates to maximize their ROIs (return on investment).
Think about it, on any given day, your affiliates have dozens of offers that they can mail, and you want them to choose yours because you pay them the most, so do whatever you can to help them maximize their returns.
5. Hold Contests that Serve Many Winners
Contests are a great way of encouraging your affiliates to work hard for you. The promise of all those extra rewards helps keep them motivated, but it's very important to structure your contests the right way.
It's recommended that you have a minimum sell. For instance, affiliates must sell $5,000 during the contest to qualify. Stay open to altering the terms of the contest, especially if it's one that goes on for a longer period of time.
6. Review and Adjust Your Structure
About once a year, you may want to review your commissions and your reward structures. Verify if they are still relevant and adjust if necessary. Prices change all the time so you need to recalculate your commissions to ensure that they are set correctly.
Now that you know what to pay affiliates, it's time to find out the best time for reaching out to them. In this section, you will also find out what you need to prepare before you do in order to ensure the maximum likelihood for success.
7. Understand Where Your Product Fits In The Industry
Before you begin pitching affiliates, take time to study the industry so you can understand the big picture. Read news that is related to the online marketing landscape and strategize accordingly and you will be able to solve most problems. You also have to study your specific market as well as your ideal audience’s needs.
Understanding exactly what you're offering the market and being able to adjust to the changing needs of your consumers will help you take care of all the rest.
Make a strong offer to your affiliates and they will be eager to work with it. When trying to find out this information, it helps to ask for honest feedback from customers and potential affiliates.
8. First Prove the Profitability of Your Product Before Pitching Affiliates
It may not be the best idea to reach out to affiliates with a totally new product. If you want your affiliate partnership to be successful, you need to test and optimize your offer to ensure strong customer value in multiple networks.
As long as your offer is showing inconsistent results, continue to test and optimize it internally until you get the results that you want. After going through that process, when you open your offer to new partners it's sure to return lots of value to the affiliates, who will then put their resources toward helping to scale your offer gradually.
Affiliates don't want to send for any offers that aren't going to make them money. Even if you're relatively small, with a high quality, high converting offer, you will get affiliates of all sizes who want to work with you.
9. Before You Pitch to Affiliates, Get Your Promotional Materials Ready
Don't make the mistake of recruiting your affiliates before you've got all the creatives ready for them. Make sure that you have all the product info, banners, email swipes, and so on before you start pitching affiliates.
10. Offer Adequate Advance Notice so Your Affiliates can Promote Your Product
Affiliates usually have a schedule all mapped out for all the offers they are going to promote. This is especially true of the bigger affiliates.
This means that you have to give them enough notice, usually a couple of weeks depending on how busy the time of year is, otherwise they may not have any slots open.
The lead time that you give them should increase during the months of October to December, which is the busiest time of the year. You could even offer up to three months lead time if you really want to land the affiliates that you want.
Affiliates plan out their campaigns and build out their offers the same way you do, so if you host an offer calendar for them, showing promotions for the next, say, three months, it would result in higher take rates. Make sure that the affiliates can access your calendar easily so that they can build their own campaign schedule in time.
How to Recruit The Best Affiliates To Drive Sales
Now comes the part you've been waiting for – how to get those high-quality affiliates who are going to drive your sales through the roof.
If you're a bit intimidated by recruiting affiliates, just remember that the very worst thing that can happen to you is that you'll get a no (or be ignored - I don't know what's worse to you...) But by pitching to them, you give yourself a chance to get a 'yes'.
Use the strategies listed below to increase your chances of getting that 'yes'.
11. Leverage Your Existing Network of Connections
Don't be afraid to ask for introductions. And offer to give introductions to affiliate managers and other partners if you can. Building quality relationships in your industry is more vital than ever in today's world.
Offer them help, show them you care and they will be willing to help you out in return when the time comes.
Hit up everyone in your contacts who can help you promote. If you aren't sure about where you can start building connections, try LinkedIn.
It's easy to find connections there based on profession and industry. Send them a request to connect. If you want to increase your acceptance rate, personalize each request that you send.
You can also look for LinkedIn groups within your industry and get involved with the discussions. That is a great way to gradually build relationships and it makes it easier to move to one-on-one conversations over time.
12. Work With Complementary Industries
Try to think beyond the typical industry leaders to find prospective affiliates with audiences who could benefit immensely from cross-sells. Amazon does this very effectively by offering you related items when you purchase a product. But you can go even wider than that.
The trick is not to look for a 'perfect' affiliate, but to seek one that has an audience that is likely to respond positively to your offer.
For instance, say you have an offer that involves financial investing. You may feel that you already know all of the 'big' partners in that space and that you cannot grow your affiliate program any further. But, that is not necessarily true.
You can search for other affiliates who have a product or an offer with an audience that is similar to yours such as real estate, high-end watches, and so on.
13. Evaluate The Experience of Your Prospective Affiliates
Prior to pitching prospective affiliates, you must do a bit of digging to ensure that they have the potential to be a great fit. Recognize the difference between beginners and the 'big fish'.
In order to be able to tell who's who, ask them the following questions:
Have you done any affiliate marketing before?
How are you going to promote for us (social media, email list, website, PPC, etc)
What do you know about our company/product?
However, don't automatically disqualify the small affiliate.
You'd be surprised just how successful some people are even though they are new to affiliate marketing or if they have small audiences. There isn't really an affiliate that is too small to promote when you think about it. So keep that in mind as well.
These are just some of the strategies that you can put to use to help you build a successful affiliate program.
Just remember that affiliate marketing is basically a relationship business which means that the majority of your time should be spent on building true friendships and relationships.
Once you understand that and you follow the strategies outlined here, then you're on your way to building a great affiliate program of your very own.
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Updated: Originally published August 16th 2018