Looking for a distribution strategy that can help you reach your audience? Your go-to may be social media. But…
“That can be ‘turned off’ at any time,” said Ryan Alarid, who has spent the majority of the past decade as an affiliate manager and has trained countless other affiliate managers as well.
While we aren’t suggesting to ignore social media, Alarid offered an alternative for reaching your audience where it already hangs out — build your own affiliate marketing program.
That’s, of course, easier said than done.
Which is why we reached out to a panel of five successful affiliate managers to hear their secrets to building profitable affiliate marketing programs…plus, the mistakes they made along the way and how you can avoid doing the same.
From how to determine payment terms to re-engaging inactive affiliates, read on to learn 29 affiliate marketing best practices to build an affiliate marketing program and maximize success from some of the industry’s best.
How to Determine Your Affiliate Program’s Commissions, Rewards, & Payment Terms
One of the first questions new affiliate managers ask themselves is what type of commissions and rewards they need to offer in order to recruit truly quality affiliates — the ones that have the audience, experience, and skills to drive sales.
Here’s what our panel of affiliate managers had to say about that.
1. Study What Your Competitors Are Offering Affiliates & What’s Realistic for Your Company
Alarid agreed. “I always try to give my affiliates the most commission as possible. The more you can pay your affiliates, the more traffic they will send,” he said.
But at the same time, you need to make sure what you’re offering doesn’t leave you in the red.
This is how DeHerrera recommended figuring it out:
“You need to build an internal calculator. You need to know exactly how your offers convert, so you can make a decision on how much to pay out. A lot of times, vendors will go negative during the first sale, but know their backend so well, that they can recover a lot of that revenue post-transaction, or on a continuity basis, based on your stick rate. Knowing and understanding the lifetime value of your customer will be huge in determining the payout,” DeHerrera said.
If you’re not sure how to calculate your customer lifetime value (CLV), this infographic from Kissmetrics, as illustrated via a Starbucks case study, might help (side note: Can you guess – before reading the infographic — how much an average Starbucks customer spends on Starbucks across her or his lifetime?).
“Be careful not to make commissions too high, or you will not have any wiggle room for offering commission bumps or contest prizes, and you will lose money,” she said.
2. Be Transparent About Your Payment Structure
“For example,” he added, “what happens with refunds, or if two different affiliates send the same customer? Who gets paid? All of these things need to be discussed before engaging. We produced a ‘deck,’ or a PowerPoint presentation, that we could send to a potential affiliate, that outlines all these parameters. This way, we can easily say it was communicated, and it lowers the risk of them getting upset.”
Here’s an example of an affiliate payment structure from HostGator:
3. Accommodate Affiliates’ Desired Payment Schedules
This might add extra logistics to your work, but it will help you avoid a common mistake.
“I have seen many affiliates walk away from a successful program due to the lack of reporting and not receiving payments on time, or when requested. We have to remember that a lot of times, the affiliates are investing their own money to run your offer, and expect to be paid when appropriate,” DeHerrera explained.
4. Have a Plan to Reward Your Top Performing Affiliates, But Don’t Assume You Know What They Want
“I always try to pay my top guys faster,” she said.
Another powerful motivator is ensuring your highest performing affiliates maximize their return on investment. “In any given day, they have 20+ offers at their fingertips that they can mail, and I want them to choose mine because I pay them the most, without them needing to ask. I always give my top affiliates the absolute max I can in commissions. They drive the majority of our revenue, and they need to be treated like gold,” she said.
But as Verta learned, it’s best not to assume you know what top performing affiliates want. In her first few months as an affiliate manager, she learned that her specific affiliates “preferred cash prizes to the physical ones” she wanted to offer, she said.
5. Offer Contests that Serve Multiple Winners
“I hosted an affiliate contest this fall, where I botched up the bonuses that the winners would get by offering limited tiered prizes. If three people sold $30K, they could win prize A, B or C,” Verta said, sharing the challenge with this kind of structure: You could find yourself with 10 “Tier 1” winners, and only three rewards, while perhaps no one ends up at “Tier 2,” and the rewards you bought (especially if you offer physical products) could go to waste.
“I have found that it does help to have a minimum sell. For example, you must sell $5K during the contest to qualify. And you might have eight or ten affiliates who qualify,” Verta said.
Here’s an example of an affiliate contest prizes from VideoFruit:
Verta recommended staying open to changing the contest terms if it’s a contest that goes on for a long time.
6. Review Your Commission Structure Once a Year & Adjust if Needed
“Cost of goods changes from time to time, product prices drop, etc. One mistake I made was not re-calculating all commissions to determine they were set correctly. After doing some digging, I realized that commissions on a few of our products were way higher than what they should have been. One way to fix this is to re-adjust commissions each year,” she explained.
She suggested checking the cost of goods, and then reevaluating what you’re willing to pay affiliates for selling them.
How to Figure Out the Best Time to Recruit New Affiliates (& What You Need to Prepare Before You Do)
Now that you’ve figured out what to pay your affiliates, let’s find out when’s the best time to reach out to them, and what you need to have prepared when you do.
7. Understand the Industry & Where Your Product Fits In
“Understanding the big picture by reading news related to the online marketing space and being able to strategize accordingly will solve most problems, though not immediately,” Taherivand said.
Here’s a good place to start:
But you also need to study your own specific market and your specific target audience’s needs. “Knowing what you have to offer the market, and adjusting as your consumer’s needs change, should solve the rest,” Taherivand explained.
“If the offer is strong, affiliates will want to work with it, so the first thing to do is to look at what you’re offering the market. And when the information does not correlate with the data, you’ll need to reach out [to customers or potential affiliates], and simply ask for honest feedback,” she added.
8. Prove Your Product’s Profitability First, Pitch Affiliates Later
“For an affiliate partnership to be successful, the offer needs to be tested and optimized to endure a strong customer value across multiple networks. If an offer shows inconsistent results, we continue to test and optimize internally. As a result, once an offer is opened to a new partner, it is sure to return value to the affiliate and they can put their resources in helping gradually scale the offer,” Taherivand said.
9. Get Promotional Materials Ready Before Pitching to Affiliates
“When the product was released, I had many calls and emails from individuals who wanted the email swipes and banners for the offer, and were heatedly wondering why I attempted to recruit affiliates without having it ready first,” she shared.
10. Know How Much Advance Notice Your Affiliates Need to Be Able to Promote Your Product
“I have made the mistake of trying to recruit affiliates to an offer not early enough in advance for their calendars during the busiest time of the year. Affiliates tend to have a mapped-out schedule of all the offers they want to promote (especially the bigger affiliates), and if I do not give them at least a couple weeks of lead time, they may not have a slot open. This lead time increases around the busiest time of the year: Q4 (October-December),” Verta said.
Take into consideration that required lead time may vary by affiliate. If there’s an affiliate you really want to work with this year, reach out to see if they’ll share how much lead time they need. If they don’t, pitch them as early as possible.
Give yourself extra time if this is your first time — both because you’ll need it to get your own program working, and because, as a new-to-them vendor, you might need to knock on their door more than once.
How to Recruit High-Quality Affiliates that Drive Sales
Now that you’re all ready to go, it’s show time!
If recruiting affiliates scares you, remember that the worst that can happen is that you’ll get a “no” — or get ignored.
In other words, worst case scenario, you won’t recruit the affiliate. But if you pitch anyway, at least you’re giving yourself a chance to get a “yes.”
If you’re willing to take the chance, here are a few strategies that will help you get that “yes.”
11. Tap into Your Network of Connections
If you’re not sure where to start building these connections, consider starting on LinkedIn. It’s very easy to look for second connections on LinkedIn based on their profession and industry, and send them a connection request (for a high acceptance rate, make sure to personalize that request).
Alternatively, look for LinkedIn groups in your industry and start participating in discussions. You’ll gradually build relationships, and it’ll be easier, over time, to take the conversation to one on one emails, Skype sessions, or even offline meetings.
12. Consider Working with Complementary Industries
Kinda like how Amazon offers you Guy Kawasaki’s social media book when you want to buy MarketingProfs’ Ann Handley’s book about writing…
…only Alarid suggested going wider than that.
“Initially, I don’t always look for the ‘perfect’ affiliate. I look for any partners who have an audience that might react positively to my offer. For example, if I have a financial investing offer, I might feel like I already know all the ‘big’ financial partners and can’t grow my affiliate program. However, that is far from the truth. I will start looking for other affiliates having a product or offer with a similar audience, like high-end watches, real estate or even a health offer. Yes, a health offer. You might be surprised. Get creative,” he encouraged.
13. Try to Evaluate Your Prospective Affiliates’ Experience…
“I will never forget the time when I recruited an affiliate, only to have her e-mail me: ‘I am an 85-year-old woman trying to make a passive income. Please tell me exactly how to get a website and make sales,'” Verta said.
“I found some informational articles that walked a beginner affiliate through making their first sale, step-by-step, and emailed them to her. Most likely, this person will not do too well in affiliate marketing, and it is important to recognize the difference between them and the ‘big fish,'” she said, and recommended you ask potential affiliates the following questions:
- “Have you ever done affiliate marketing before?
- “How do you plan on promoting for us (email list, social media, website, etc.)?
- “What do you know about our company?”
14. …But Don’t Automatically Disqualify Small Affiliates
“One thing I’ve learned is that no one affiliate is too small to promote. You can have your handful of high volume affiliates that drive the majority of the traffic, but don’t forget about the small guy. He’s just as important to keep in touch,” DeHerrera said.
“For example, we would have a lot of gym personal trainers reaching out to promote to their customer base. This was never going to be a huge affiliate, for they have maybe 20-50 people they train regularly. However, you get 100+ of these trainers on board and actively promoting… it equals one big high-volume affiliate,” he said.
15. Check Out the Affiliate Networks
“Working through trusted affiliate networks is the best way to introduce your product to potential affiliates,” she said, yet emphasized that you still need to do your research and verify the affiliates you end up recruiting are indeed the kind that can bring you results.
“You will need to do a lot of due diligence to ensure that the partners who reach out to promote your offer will, in fact, be bringing long-term value, and have studied your offer enough to have a plan as to how that will be done,” she said.
16. Add a Visible Partner Page to Your Website to Recruit Affiliates
According to the AffStat 2016 Affiliate Marketing Benchmark Report, almost a quarter of affiliates find new affiliate programs by exploring companies’ websites. Almost a fifth use search engines. Combined, 43.67% are actively looking for new affiliate programs to join.
To serve these affiliates, make sure you have a page on your website — that’s easy to find — that details exactly what you offer affiliates, what makes an affiliate eligible to apply, and how they can join your program.
How to Help Affiliates Maximize Results
“Most affiliate managers think that their job is done when they get a booking on an affiliate partner’s calendar. That leaves the deal littered with potential landmines that can blow up in your face later,” Spears said.
17. Understand What Success Looks Like for Your Partners (or: How NOT to Cost Your Affiliates Thousands of Dollars)
“I did a launch back in 2015, and I was pumped because this super affiliate mailed to us. She made $25,000 in commission in a single mailing, and I was really excited about her results,” Spears said.
“I emailed her a bunch of times to ask her if she wanted to send to un-opens, how great she was doing, etc. Never heard from her again, except when she sent back her W-9, and she didn’t mail again during our launch,” Spears remembered.
“A year later, I saw her at an event and asked her about it, and apologized if I offended her in some way. She said I didn’t, but that an average mailing for her did $50,000 in commissions… So when I kept hitting her up, I was pretty tone deaf to the fact that I had cost her a significant amount of money that day by mailing an offer that didn’t convert well to her list, and then I kept annoying her with follow up emails.”
“That was a painful, and powerful lesson, and that is why I always ask for affiliates’ expectations of success before the mailing. If I had known she wanted $50,000 a mailing, I would have approached her in a totally different way back then,” Spears said.
Now, Spears knows that your first question should be:
“What would you consider success for this mailing?”
“You want to find out how they are judging your relationship. Is it a certain commission amount, let’s say $5,000 per mailing? Or is it that they don’t get high unsubscribes? It could be that they measure their mailing on the basis of revenue per name on the list, or that they consider a successful mailing one that gives them a reciprocal back (a reciprocal you aren’t able to give because their product is not approved by your client, for example, which can lead to bad feelings if you don’t say that up front),” Spears explained.
She added that, “If you don’t know what they consider success, you are at a huge disadvantage when the mailing goes out because you are guessing at how the mailing did for them.”
“Let’s say that they mailed for you and did $7,500 in commission,” she said. “I would send them stats within 12 hours, congratulate them, let them know that they did well over the $5,000 they considered successful, and ask if they could get a mailing to un-opens, and if they can rebook the deal very soon in the future. This is an easy way of getting a lot more out of the deal, and setting yourself up for another successful mailing in the future with that partner.”
But what do you do if they expected to earn $5,000, but only earned $2,000?
We’ll get back to it in a little bit, but let’s first explore how to set your affiliates for success in the first place.
18. Diversify the Marketing Assets You Offer Affiliates Over Time
“Work with them to get them custom affiliate assets (custom landing page, custom email swipe copy, etc) if they are big affiliates, because they drive the vast majority of your revenue. Give them all of their assets well in advance of the mailing, so they have time to load and test. When you deliver the assets, give them their login information for your affiliate portal again, but also hand delivers their links and needed materials, so they don’t have to dig around for them in your portal. Make sure to test the link before delivery,” Spears said.
DeHerrera added that, if you have ongoing promotions for a certain product — versus a one-time launch — it’s important to keep diversifying the marketing assets, as Marie Forleo’s affiliate info page does.
19. Offer One on One Consultation Calls
According to Alarid, “It’s vital that affiliate managers work as hard as they can to ensure their affiliate partners are successful. The first thing I do when I have a new affiliate partner is get on a Skype video call, or at least a phone call, with them. I like to create a personal connection with each partner.”
“The intro call allows me to learn about what their audience likes and dislikes, and what offers or promotions have been their most successful. Knowing this information allows me to customize a package for each affiliate. More than anything, it allows me to start building a true relationship and friendship with the new partner,” he said.
“Within our affiliate management system, we have notifications triggered to all affiliate managers when to reach out and schedule the next follow up call with the affiliate. We schedule monthly one on one meetings with our affiliates to take a deeper dive into their business and offer help where we can. This ultimately leads to them promoting our offers a lot more,” he said, and asked that you remember that “their success ultimately equals your success.”
20. Be Available to Answer Questions & Help Your Affiliates
“Replying back days after they reach out to you is unacceptable. I had a strict 12-hour response time with my team. No matter weekday or weekends. You need to let them know you are there to help at any time,” he said.
The added bonus? You might get an affiliate that wasn’t originally available.
“A lot of times an affiliate can lose an offer, or get an opening in their schedule to promote you, and you’ll lose out if you aren’t around to take advantage of it,” he said.
21. Offer Resources that Answer Affiliates’ Questions in Bulk
For example, when EntrepreneursHQ produced its Video Success Summit, it created an affiliate info page that included information about…
- What attendees get
- What affiliates can earn
- What could get affiliates disqualified from participating
- The most profitable days to email their audience
Producing training videos and hosting Q&A webinars could also help you support a large volume of affiliates in a more sustainable way.
22. Provide Real-Time Reporting & Be Proactive About Communicating the Stats
“It is absolutely vital to provide them with real-time reporting. Obviously, this reporting needs to be 100% accurate with integrity. Some affiliates will be running 100+ different sources to your offer, and by offering them real-time reporting, they can quickly determine which sources are working and which are not. You save yourself money as well as your affiliates. This also helps scale quickly if you have a good performing offer,” he said.
By keeping track of the data, DeHerrera is later able to easily see “what offer was sent last, and what types of creatives we should send their way for the next promotion.”
“Make sure you follow up quickly with stats and feedback, so you can keep the relationship strong. The easier you make it to work together, the more they will succeed when they run your offer,” she said.
23. Reach Out to Affiliates Who are Underperforming to Help Them Save Their Campaigns
Spears said she would have reached out to see how she could help, had she known the affiliate’s expectations.
She would do it for smaller affiliates, too. Here, for example, is how she would she handle an affiliate that wanted to make $5,000, but ended up making $2,000:
“Still send them stats within 12 hours, but address the bad performance head on. I would say something like:
“Thank you so much for mailing this offer. I know we were hoping for $5,000, but you have only done $2,000 so far, which I know isn’t where we want to be. Do you have any feedback on why you think it didn’t do well?”
“You might find out that they tested to a small segment, and their numbers actually look good. Or that they have tried offers like this in the past, and they tanked, but wanted to try again because they like you as a person,” Spears said.
Either way, “by knowing their desired outcomes from the beginning, you put yourself in a much stronger negotiating position, and a much better position overall to maintain a great relationship with your affiliate partner, because you are both on the same page,” she said.
How to Reengage Inactive Affiliates
Some affiliates start out great, but stop promoting you over time, or just sign up and never take action. But it doesn’t necessarily mean that your collaboration with them is gone forever.
24. Get the Deal in Writing
“If your deals are loose, your affiliate partners’ mailings will be loose too, which is never good for the bottom line. If the deal is structured clearly, and agreed upon by both sides, then they should be active when they said they would be. However, if they are not, you at least have the deal agreed upon in writing, that you can reference with someone higher up in the company to make sure that the deal gets pushed through,” she said.
25. Discover What Happened & Work with Affiliates to Find New Ways to Integrate Your Product into Their Sales Funnel
“At times, affiliates may not be driving traffic or converting as much as they used to, or as much as you know they’re capable. This can be a lack of new offers or promotions, or they may have promoted a certain product too many times, and their list is burnt out on it. This is more common than you may think,” he said, but added that “several things can be done to alleviate this.”
“I like to start by reviewing my partners I feel are not performing where they should, and do a forensic review of their past performance to see if I can find any key areas of concern. This includes products promoted, subject lines, email copy, and even frequency of sends,” he said.
“I will reach out to these partners to create a custom experience for their audience, or even a slightly different marketing angle, that resonates better. I also think of other ways to integrate our offer into their sales process. Email sends are not always the best, and at times can fatigue. When this happens, I try to get on their ‘thank you’ pages, upsell funnel, or even in their auto-responder series. Doing this creates a steady flow of revenue to all new buyers,” he said.
26. Raise Commissions for a Limited Time
For example, “If you promote X products this month, I can give you an extra bonus, or raise the commission on a product you like to promote,” Verta said.
27. Incentivize Your Inactive Affiliates to Bring You Better Affiliates
She does this through: “Second tier commission contests. If I am slowing down in affiliate traffic, I run a contest with my affiliate partners to see who can introduce me to the newest, highest quality affiliates, and pay the winner good money (no less than $2,000) to help me do that. Then I second tier those introductions to them for life, so that they keep making money from their relationship with me,” she said.
28. Conduct Monthly Consultation Calls to Keep Your Affiliates Engaged & Successful… & Your Company’s Reputation Safe
They might stop promoting it altogether or end up resorting to unethical techniques to boost sales.
“That can create additional issues for the business. You need to know if they are spamming or doing anything to hurt your reputation,” DeHerrera said.
Advocate for Your Affiliates When Your Company Messes Up
Speaking of your company’s reputation, Alarid emphasized how important it is that you do everything in your power to protect it by showing up for your affiliates, especially when your company, or the company you represent, messes up.
29. Be as Transparent and Helpful as Possible When There’s a Problem on Your End
“As affiliate managers, we are at the mercy of the company owner. Unfortunately, all I could do is contact each partner individually and tell them everything I knew, and promise them I would do everything to get them paid and be in touch on a regular basis. Unfortunately, this partner went bankrupt and never paid the affiliates or me,” he said.
“It definitely hurt and felt like I disappointed my partners. I still wish I could have made the situation better for everyone involved,” he said.
So, when he could minimize the damage on another launch, he did.
“One of the biggest mistakes I have experienced during my affiliate management tenure was during a failed launch of a new health product. I recruited all the big names in the health industry, leveraged personal contacts to get introductions to new health partners, and even used a few personal favors to get large A-list affiliate partners to promote our launch,” he said.
“Long story short, our testing pre-launch was promising. During the first day of the launch, traffic was flowing in large numbers, but sales were not there. We looked for any tech glitch that could possibly explain so few conversions. Not just limited conversions, but literally zero,” he remembered.
“As a company, we gathered together to take quick action. I insisted we cancel the launch immediately and personally contact each affiliate partner — honoring any prizes,” he said.
“I emailed each partner via a mass broadcast email to let them know to stop sending traffic. I chose that route immediately because it informed everyone quickly, and allowed them time to stop sending their highly-targeted traffic to an offer not making them any money. After the broadcast, I began to personally call, Skype, Facebook, and text all the contacts one at a time. I wanted to ensure them we were doing everything possible to make things right, and thank them for their support,” he said.
“My #1 priority was to reach out to each partner personally to maintain a positive and profitable relationship,” he emphasized.
Always Remember: Affiliate Marketing is a Relationship Business
“My biggest mistake was to talk too much business to start. When I was new, I talked business so much I forgot to establish a personal connection with the affiliate. It’s the personal connection that makes any affiliate manager a success,” Alarid said.
This is how he balances that fine line:
“I like to talk enough business to know I need to do business with that partner. Afterwards, I create a personal relationship with them. Once you have a true friendship with your partners, it opens the door to many business opportunities. After nearly ten years in the industry, I consider many of my affiliate partners family,” he said.
Therefore, he keeps in touch with his partners the way many of us keep in touch with family members and friends – via Facebook. This helps him put his affiliates’ needs first on a deeper level than most.
“I use Facebook, not only as an added communication device but also to help know what is going on in the life of my affiliate partners. On the communication side of things, if I noticed they are not responding to an email, but see they are on a beach vacation with their family, I will know not reach out to them until they are back and caught up on emails,” he said.
“I also like to use it to keep up on anything good or new in their lives. For example, if I see that they just had a baby, I like to make sure I reach out and congratulate them or even send an Amazon gift card or something similar. Facebook helps me stay relevant with my affiliate partners’ lives,” he said.
“I’ve traveled the world, hugged, cried, drank, and even consoled my affiliate partners. However, I don’t like to call them partners. I call them family,” he shared.