How to start an affiliate program for Your Business? A Proper Guide

Starting and running a successful affiliate program can be challenging. After all, you need to find and train the right organizations, choose the right commission, and plan to track your success. You also need to make sure they follow the rules of your program.

This guide to starting a marketing program includes everything you need to get started on the right foot with this marketing plan. By following these steps (and affiliate marketing), you’ll set up your affiliate program for success.

Let’s move forward and learn how to start an affiliate program.

What is affiliate marketing?

For businesses, affiliate marketing means offering a reward (usually a flat commission or percentage of cash) for a sale/lead. Affiliates are people who promote a company’s products and services in exchange for a commission. These people can be entrepreneurs or professionals (such as Instagram influencers or niche website owners).

For an affiliate, affiliate marketing means promoting a company’s offerings to earn a commission. Affiliate marketing is legit and it creates a win-win situation where businesses benefit from sales without upfront advertising costs, and affiliates are compensated with commissions for their marketing efforts

Wherever we say “marketing” in this article or on the Social Snowball blog, we mean from a business perspective.

BENEFITS OF AFFILIATE MARKETING

1. Low risk, high reward 

Affiliate marketing is a marketing strategy based on performance. It means that you only pay affiliates for the clients (or clients) they bring to you after the client has passed the refund/trial period. 

Plus, setting up an affiliate program only costs $0 per month.

In short, you don’t need to invest much money upfront to create an affiliate program.

2. Increase brand awareness

From an affiliate’s perspective, the first step to promoting your brand and earning commissions is introducing yourself to your audience. Only after you share the features/benefits/uses of your product or service can you get people to click on your affiliate link and earn a commission.

In other words, at the very least, they will increase your brand awareness and spread a positive opinion about you.

3. Increased Revenue

No wonder connected people who positively hear about your brand (from a partner) convert well and increase your revenue.

 Even 20-30% gross revenue through an affiliate channel is not uncommon. 40% of merchants in the US cite affiliate programs as their primary customer acquisition channel.

Tips to keep in mind while setting up an Affiliate Program:

• An affiliate program will work well if you want others to promote your business on their channel and drive traffic to your site directly. 
• Partners will not resell your products for you. Instead, they’ll recommend and link to the products you sell in your store.It will help if you offer affiliates a cash commission (or store credit) every time they help you make a sale.
• Affiliate programs work best if your business has high customer retention rates. If a client makes consistent profits for your business, it will be much easier for you to pay consistent commissions. Also, since you won’t spend as much on customer acquisition, you can offer higher commission payouts and attract better partners to your program.

STEPS ON HOW TO START AN AFFILIATE PROGRAM

1. Set goals for your program

As with all marketing programs, start by setting goals for your affiliate program.

First, you need to establish the audience you want to reach.

• What kind of customers do you want to attract through your affiliate program?
• What types of affiliates will help you with this?

Then set some primary measurable goals or KPIs for your program. It will help you know if your program is successful.

 KPIs must be SMART: Specific, Measurable, Achievable, Relevant, and Time-bound.

Your primary goal will be the amount of revenue your partners want to generate per month, quarter, or year.

• Set conversion rate goals: How often do you want people who click on your affiliate links to make a purchase? Consider setting a goal for affiliate-driven average order value (AOV). Also, set goals for the number of unique affiliate sales in a given period. You can also set goals for the impressions, clicks, and leads you to want affiliates to generate within those timeframes. Sales are, of course, the most important, but these other metrics will also come in handy in measuring the success of your affiliate program.

2 . Analyze the affiliate programs of your competitors

You’ve probably done some general analysis to determine the strengths and weaknesses of your business compared to your competitors. Now is the time to study the affiliate programs of your competitors.

Before you even start building your own, a dedicated analysis of available affiliate programs will let you know where you stand and allow you to position your program competitively. After all, you are also competing for partners.

Here’s how to perform a competitive analysis of an affiliate program:

•  Find at least two competitors with affiliate programs. It also helps to find at least one business with which you’re not in direct competition but have the same audience as you (and might attract similar partners).

•  See how each competitor program structures its affiliate commissions.

• What action triggers an affiliate commission payment (sale, lead generation, or something else)?
• Do affiliates receive a percentage of the sale as a commission or a fixed amount for each action?
• Are affiliates paid in cash or credits to use on branded products?
• How does the commission rate of each brand compare? Does it seem high or low compared to other programs’ fees and their products’ prices?
•  Determine how each brand finds its partners.

• Do you recruit partners on your own or through an affiliate network?
• Do members have to apply to be accepted?
• How strict is the application process?
• What are the terms of each affiliate program?
• How does each brand allow affiliates to promote and post their affiliate link?
• What is a member not allowed to do under this program?
• If you can do some research, try to find out other details about competing programs.
• What training does each brand provide to its partners, if any?
• What advertising and branding assets does each brand provide to partners (banners, creative, freebies)?
• How often does each brand communicate with affiliates?
• How does a brand use cookies to track affiliate programs? Do they use cookies to track the sale to an affiliate, even if someone doesn’t make the purchase right away? How long do cookies remain active?
• Finally, do a SWOT analysis.

1. What are the strengths and weaknesses of each program?
2. What opportunities could you take advantage of because a competitor program missed them?
3. What threats can each competitor program pose to your affiliate program?

3. Deciding on the right affiliate commission

Use the results of your competitive analysis to help you structure your affiliate program. One of your most important design choices will be your commission structure or how you pay your affiliates.

Even if you see other commission rules on competing programs, you should only compensate an affiliate if a sale is made through their affiliate link. (Don’t pay for impressions or clicks!)

First, decide whether you will pay a flat amount for each sale or a percentage of each sales associate. You’ll also need to choose between paying with cash or store credit. Generally, a percentage commission paid in cash will be more attractive to affiliates.

Next, decide on the exact commission you will offer to affiliates. While you want this payout to be competitive compared to rival affiliate programs, remember that outdoing your competitors isn’t always the best strategy.

4. Decide on other critical aspects of your program structure

In addition to your commission, you will also need to decide on the following:

• How do you allow affiliates to promote and distribute your affiliate links? What marketing channels can they use?
• How long will affiliate cookies be active (how long are affiliated eligible to earn commissions after someone clicks on an affiliate link)?
• What other terms and conditions will your affiliate program include?
• How will you differentiate your affiliate program from competing programs?
• Will you hire a dedicated affiliate manager for your program?

5. Start looking for partners

Now that you are ready with your program structure, your next step is to find affiliates. At this point, you will have to decide between using an existing affiliate network and creating your custom affiliate network.

Important note: Regardless of your route to find affiliates, you will need an affiliate tracking method to register, establish affiliate links, and monitor affiliate progress. 

Will you use an existing affiliate network?

An existing affiliate network can help you quickly build a rep base, especially if they already have relationships with top affiliates in your niche. Therefore you’d need to understand your market to the most profitable niche for affiliate programs. You can also cultivate relationships with these affiliates for yourself since networks usually handle affiliate management.

6. Shortlist potential affiliates and recruit the best

Choose the affiliates that are the best fit for you and reach out to see if they would like to join your affiliate team. Your goal is to find high-quality mates and avoid scammers. So be sure to screen potential affiliates manually.

You will also need to decide how many affiliates you want to recruit. It will depend on the scope you want and how exclusive you want your affiliate membership to be.

Here are several steps you need to take when evaluating affiliates on your shortlist:

• Examine their websites, blogs, or social media profiles to see if their style and tone are a good fit for your brand.
• Ensure they are constantly active in creating content and have high engagement from their readers or followers.
• Check their public profiles to make sure they haven’t engaged in unethical or questionable behaviour, such as using spammy links.
• Ask potential affiliates for a concrete plan of how they would promote your brand if selected.
• If possible, ask them about any previous experience they’ve had with affiliate marketing, including sales results they’ve had for other brands.
• Once you’ve selected the affiliates you’d like to have in your program, contact them using a personalized message. This message should explain how the program works, describe the benefits to the affiliate (including how commissions work), and briefly summarize the affiliate’s responsibilities. The goal is to convince the fellow to sign up and start a healthy and warm relationship with the companion.
• After affiliates decide to join your program, inform them of the terms and conditions of your program and ask them to sign an agreement to abide by these rules.

7. Train your affiliate team and keep them updated

Train affiliates on brand and program basics, provide them with your unique affiliate links and review best practices for placing and promoting those links. Also, provide affiliates with promotional resources, including branded banners, images of your products, or even videos.

Remember, those affiliate relationships are long-term and must be nurtured for the best results. So the support doesn’t stop at training.

Send the latest updates and promotional announcements to your affiliate partners promptly. It includes news about sales and offers, promoting new products, and any changes to the affiliate program. Scheduling a monthly webinar or Zoom meeting works well for this, as does posting updates in a dedicated Slack, LinkedIn, or Facebook group.

8. Track the performance of your affiliate program

Once you launch your affiliate program, you must track its success. It is done through your affiliate program or your network of registered affiliates.

Track the affiliates who bring in the most sales. Also, check how well your affiliate program meets the metric goals you set during planning, such as revenue value, conversion rate, special deals and AOV. If your program is not achieving these goals, it may be time to change your commission structure or rethink your affiliate program.

Plan to regularly check in on individual affiliates’ progress, whether via email, direct messages, your affiliate dashboard, or Zoom. Set check-in times and stick to them.

WRAPPING UP

We hope you now know how to start an affiliate program.

If you want to create a win-win strategy for your firm, schedule a demo with InviteReferrals and see your eCommerce sales. 

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