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How to Create an Affiliate Marketing Program

Chapter 29 by Nicole Martins Ferreira

According to AM Navigator, in the United Kingdom, affiliate marketing has an ROI that amounts to $15 for every $1 spent. PRWeb states that at one point approximately 40% of Amazon’s revenue came from affiliates showcasing the power affiliate marketing can have on a brand. Retailers have noticed a conversion rate of 5% from visitors directed by affiliate links. The hardest part of building an affiliate program is finding affiliates who can drive converting traffic to your store. Yet store owners have a powerful ally in their loyal customers who can be rewarded for their referrals. Store owners can also reach out to affiliate marketers to cast a wider net of affiliates for their program.

Example: MVMT’s online store earns a portion of its revenue from its affiliate program. On their affiliate program page it details the key information you’d need to know as an affiliate. It lists the payout for each item you sell, theirs is 10% commission. It mentions the referral period of 15 days which means that the individual needs to buy from your link within that period. You’ll also find information on how much money you can make based on your daily sales. For example, by selling one product a day a MVMT affiliate can make $405 per month. But if they sell 100 per day, they can make an astounding $40,500 each month.

MVMT Affiliate Marketing Program Campaign Screenshot

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How to Create An Affiliate Program

If you want to run your own online store affiliate program you have two options. You can create an affiliate program in-house or use affiliate software to create the affiliate marketing program. Both have their own advantages and disadvantages which we will talk about later in this chapter.

Create Your Online Affiliate Marketing Program

  1. Set Your Goals: You should set some goals to achieve with your online store affiliate program will help to achieve these goals. Do you want to achieve a certain revenue figure or traffic metric? Maybe your affiliates will also be influencers and you plan to grow your brand. It is important to have clear goals so you can measure your success.
  2. Determine Your Commission: Next set you commission level so affiliates know what to expect when they make a sale. Will you work on percentages or dollar values? How often will you payout? These are important questions to answer before you start to find affiliates for your program.
  3. Figure Out Tracking: Will affiliates need to send people to your site through tracked links, or will you use software to track traffic to your website from affiliates? Tracking is super important as without it you can run into problems with affiliates where they might make more sales than you are aware of and you cannot pay out correct amounts. This will lead to affiliates leaving your online program and you could get a bad reputation.
  4. Terms and Conditions: Terms and Conditions are guidelines for your affiliate to follow. This helps ensure that the quality of traffic your affiliate sends is high. It also helps prevent your website from being penalized for black hat marketing tactics. Provide suggestions of the types of methods customers can use for sending traffic such as referring friends or creating ads, videos or blog content.
  5. Find Your Affiliates: Finding affiliates can be the hardest thing to do if you don’t know who you are looking for. Once you have thought about the types of affiliates that you want to use you can start to think of where you can find them. Will you advertise your online store program, post on affiliate networks, look into social media affiliate groups? There are many ways to find affiliates so don’t get dissuaded if your first campaign is not fruitful.
    Affiliate Marketing
  6. Affiliate Program Marketing: Affiliates will need marketing collateral before and after they join your program to motivate them. Think about what material affiliates will need in order to choose to work with you and to continue working with you when they experience a drop in sales.
  7. Affiliate Best Practices: Even though you want your affiliates to promote your products you want to keep your brand quality so you need to ensure that affiliates are promoting you in the right way. This could mean providing videos or webinars for your affiliates to educate them on new products.
  8. Tiered Affiliate Program: As your online store affiliate program grows you can look at introducing a tiered system where once an affiliate reaches milestones for the number of products sold or amount in sales made, offer them a higher commission. Ultimately, money is the motivating factor for most affiliates and they’ll be more motivated to send you quality traffic if you pay them what they’re worth. Make sure that your commission structure is profitable so you don’t start to lose money when you pay out more commission.
  9. Affiliate Retention Plan: As more affiliates join your network you will need to spend time enticing them to stay. Ensure that affiliates feel valued by providing giveaways and promotion to top sellers and bring extra value by launching new products to affiliates before other channels. The extra perks that you provide could be the difference between an affiliate choosing you over a competitor.
  10. Affiliate Successful Tracking: How will you know if your affiliate marketing program is worth it? Work out your cost per affiliate gained to plan how much you can spend on finding new affiliates. Try identifying affiliates who are not earning and reach out to offer help. Maybe you can build an affiliate community where top performers lend a hand helping those struggling to achieve sales. Overall you need to work out if your online store affiliate program is worth the money you have invested in it.

Advantages of In-House Affiliate Marketing Programs:

4 Pros and Cons of In-house Affiliate Programs

  • Commission Payments: You get to control your commission structure, not a third party network that increases the amount of commission you payout.
  • Better Product Knowledge: By working directly with your affiliates you can educate them on your USP and who your target audience is.
  • Leverage More Offers: Having close communication with your affiliates means that you can share time-sensitive offers with them quickly leading to more successful promotional campaigns.
  • Control Over Program: An in-house online affiliate program is great as you can control every aspect of it, from commission structures, terms and conditions, and so much more. 

Disadvantages of In-House Affiliate Marketing Programs:

  • Affiliate Payments: Having an in-house affiliate marketing program means that you need to track and pay every affiliate for every sale they make. This takes time and resources that you may not have at your disposal.
  • Reporting Success: Like with every part of the business you will need to report on the success of your online affiliate program. This means you need to set up tracking and pull reports for both your company and affiliates quite regularly.
  • Overseeing T&Cs: As you are solely reliable for the policing of your affiliates you need to oversee their activities and make sure that they market your product according to your terms and conditions. This can be time-consuming but is vital to the success of your brand.
  • Affiliate Sourcing: You need to be constantly on the lookout for new affiliates to replace the ones who leave your program so that you can guarantee a certain level of revenue every month.

So creating and maintaining an online store affiliate program can be challenging but definitely has its upsides also. But maybe you don’t have the time or resources to manage your own affiliate program now. That’s okay because you can use a third party affiliate marketing program provider to manage yours for you. Here are some affiliate marketing program tips that will help you set up your online store affiliate program with the use of external software.

Affiliate Marketing Program Tools:

If you’re looking to build an affiliate program for your store you might want to try Refersion. It allows you to build your own custom program, register new affiliates in a few simple steps, and easily access data on affiliate performance. You can even encourage your customers to sign up for your affiliate program to grow your affiliate database quickly. You can pay multiple affiliates at the same time via PayPal – one of the most popular payment gateways.

Refersion: Affiliate Tracking App

FriendBuy helped popularized the ‘Get $15’ section you see on so many ecommerce sites. Their plans start at $99 a month which is fairly steep for new store owners so I’d only recommend this tool if you’re generating more than $20,000 in revenue each month.

FriendBuy: Customer Referral Program

Commission Junction is a tool you can use to find affiliates. You’ll be connected to some of the best-performing affiliates around. You only need to pay for customers who’ve bought through an affiliate link. However, the fees can be high.

Commission Junction: Online Affiliate Network

ShareASale is another tool you can use to find affiliates – it’s the one I use for my store. You’ll need to pay a one time fee of $650 to have access to the network, which can be steep for new store owners. You’ll also need to pay a 20% transactional fee and at least $25 each month. However, all your affiliates are prescreened. And you only pay the 20% fee if the traffic they send converts. It’s a great way to find high-performance affiliates.

ShareASale: Affiliate Marketing Program Provider

LeadDyno allows you to launch your own affiliate program. You’ll be able to use their database of bloggers and influencers to find new affiliates. Tracking your affiliates’ performance is simple and each affiliate will have his or her own dashboard. Pricing starts at $29 a month making it affordable for new entrepreneurs starting out.  

LeadDyno: Shopify Affiliate Marketing App

Affiliatly is an affiliate tracking app you can use to help you manage your affiliate program. It allows you to set up your own affiliate program with ease so you can increase your sales. You’ll be able to track orders from affiliates, manage affiliate payments and more. Pricing starts at $16 a month which is great for those on a budget.

Affiliatly: Shopify Affiliate Tracking App

Referral Candy is an affiliate program where customers can refer visitors to your website. You can choose to pay customers in cash or with a coupon. Email reminders can also be sent on the platform to remind affiliates who haven’t been bringing in sales. The tool is easy to install and use. Pricing starts at $49 a month.

Referral Candy: Shopify Referral App

Affiliate Marketing Program Tips:

You need to work with your affiliates closely especially in the beginning to ensure that they’re successful. By giving them the right tools to succeed, you can generate more revenue for your business. You might have affiliate newsletters, competitions, and a leaderboard so that your affiliates can get excited to promote your brand. It also gives social proof that success is possible. Affiliate programs are not for the faint of heart. This isn’t a set it and forget it model. You need to stay in touch with your affiliates to make sure they keep reaching their financial goals through your program.

Get your customers involved. Encourage customers to refer a friend for a cash incentive. You can choose to include a flyer in each package you send to your customers about your affiliate program. If you dropship goods, you can email each customer after they place an order to sign up for your affiliate program. Including a link to your affiliate program in every email you send out with a headline such as ‘Earn $10’ can pique curiosity. Those looking to make money may refer their friends to earn commissions. Since customers are already familiar with your brand they can share their personal experiences with friends and family which helps boost conversions.  

Soludos uses the FriendBuy app listed in the tools section for their affiliate program. Customers who refer their friends or audience, get paid $15 for every sale they land. To entice the new leads to sign up through their friend’s link they get a 15% discount. Loyal customers who regularly promote your brand can be rewarded for their constant promotion. You can also lure in influencers by offering payment for every paying customer they bring instead of paying their flat rates. You’ll want to set a high order value when setting your page up to ensure that your business remains profitable with each sale.

Soludos affiliate program with FriendBuy app

LeChateau encourages customers to sign up for their referral program with a chance to win a $2000 shopping spree. All a customer needs to do is refer their friend, who then needs to sign up for their newsletter while also receiving a 15% discount. On the bottom left corner of their website, they include a ‘WIN $2000’ tab to entice customers to click the link. Once customers click it, they’re redirected to a landing page where they learn how they can have a chance to win a shopping spree. Since email marketing is one of the most powerful ways to grow your sales, this strategy is easy for your affiliates to do, while also focusing on the long-term growth of your online store.

If you’re struggling to get affiliates, you can use coupon affiliate sites like Coupon Craze or Ebates to share a discount code for your customers while paying a commission to the brands. You’ll need to pick discounts and affiliate rates that allow you to stay profitable. You need to be making more than a couple of dollars after the fees have been paid to ensure that your business has long-term growth.

Coupon Craze is great for affiliate coupon sales

Don’t depend on affiliate marketing. While affiliate marketing can help boost your sales, it’s often not enough for you to be passive with other marketing strategies to grow your store. You also need to take the steps to improve your store’s optimization to ensure that your affiliates can easily convert the traffic they send you. On average, affiliate sales bring about 10% of your company’s revenue.

Master & Dynamic is an electronics brand selling headphones and speakers. They recently partnered with Audible to offer their customers 2 free audiobooks with purchase. While it doesn’t explicitly say this, Master & Dynamic may be an Amazon affiliate promoting a relevant offer to their customers. If you’re looking to make a second stream of income through affiliate commissions while promoting your products, this could be a clever way of doing it. An audiobook may be an enticing offer for those who are buying headphones which may help compel them into purchase. You could find relevant offers which would help promote your products while making a commission off your purchase. You would need to disclose affiliate links to your customers to ensure transparency.

Affiliate Marketing Resources:

How to Get Started with Ecommerce Affiliate Marketing details what affiliate marketing is, how to find an affiliate, how to convince an affiliate to promote your brand, how to determine your affiliate’s commission, and more.

How to Use Affiliate Marketing as a Sales Channel for Your Business mentions affiliate networks you can join to have your products sold by affiliates. It also gives suggestions on how to build your own tracking system with Shopify apps and a few other affiliate marketing program tips on how to create an affiliate marketing program.

next: Chapter 30

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