Affiliate marketing is one of the most cost-effective marketing strategies in the modern world. It works brilliantly in increasing your brand awareness and driving new traffic to your e-commerce website. On the face of it, it seems like a pretty straightforward and effortless process of hiring affiliates and giving them commissions on sales.
In reality, it is much more complicated and the success of such a program lies in several critical factors. Below, we discuss a five-step approach that guides how you can launch a successful affiliate program. So, let’s get started.
Five Steps Approach to Creating a High-Performing Affiliate Program
Step-1 Do Your Research
Before you set out to create your own affiliate program, you must do extensive research on several topics. You must ensure that you are familiar with all the essential details that can later play a critical role in your decision-making. There are several things that should be a part of this research, and these are listed below:
Understanding Your Business’s Niche –
The key to every business’s success depends on the abilities of its entrepreneurs to make intelligent strategic decisions and effectively implement them into their operations. This is only possible if you clearly understand your business, its market, and its operations.
Launching an affiliate program can be categorized as a strategic choice, so care must be taken to ensure its success. Before you set out to invest your valuable resources in this marketing strategy, you must investigate the strengths and weaknesses as well as the threats and opportunities that can have an enormous impact on the growth of your business.
Note that the success rate of affiliate marketing varies according to the nature of the products and services. Some products perform a lot better than others.
According to a study by Referral Rock, the success rate for affiliate marketing for several types of businesses is 80% for E-commerce, 77% for beauty, 68% for apparel, 68% for tech, 61% for health, and 61% for subscription services. It is important that you set your goals according to the industry average of your business.
Defining a Budget –
Affiliate marketing is a cost-effective marketing option as compared to some other marketing methods such as PPC and social media marketing. Still, it requires a decent budget for a successful launch and sustainable growth.
Once you identify your business niche and the basics of affiliate marketing, the next thing that you must do is define a budget. This way you can not only allocate your resources more intelligently but also analyze the variances between expectations and actual performances.
In-house Affiliate Program vs Affiliate Networks –
Another vital consideration that you must assess before moving on to the second step of launching an affiliate program is the possibility of outsourcing. Yes, like most business operations you can outsource your entire affiliate program to affiliate networks. This way you don’t have to launch an in-house affiliate program.
There are many pros and cons associated with this outsourcing. The major benefit that you can achieve through an outsourcing affiliate program is that you can focus on your core operations while experts take care of your affiliate marketing operations.
Some of the key operations include sales tracking, commission payouts, and affiliates vetting and recruitment. The major drawbacks of such outsourcing include the loss of control over your operations and the increased cost of hiring professionals. If your startup doesn’t have a tight budget, outsourcing can be a lucrative option for you.
Step 2 Choose an Affiliate Management App
The next step in creating an affiliate program is carefully choosing and investing in an affiliate management app. As the name suggests, this app manages all the essential operations regarding the launch and monitoring of an affiliate program.
These operations include thorough monitoring of affiliate performance, detailed and timely reporting, payout automation, and several customizations.
There are several affiliate management apps that you can avail yourself of according to your preferences. Such apps are exceptionally reliable and trusted by companies and marketers around the globe.
For start-ups, these apps are lifesavers. They can drive your revenue at unprecedented rates. Plus, you also receive high-quality customer service and user support. The most popular affiliate management apps include:
All the above-mentioned apps are powerful tools that can ensure that your affiliate program is launched and operated according to your plan. However, the key things that you must consider before choosing any management app include user ratings and reviews, demos and trials, features, functions, and most importantly the price.
Step-3 Define Realistic Incentives/Commissions
Incentives or commissions are yet another crucial elements of any affiliate program. They not only attract exceptionally talented affiliates but also motivate your existing affiliates to drive more sales.
There are several details that need to consider before defining your incentives. You can start off by investigating the incentives offered by your competitors. This will give you an idea about the industry average and your affiliates’ expectations.
Startups generally do not have much leverage regarding their commissions. Therefore, you may have to offer more and receive less, especially at the beginning of your affiliate programs. But as your business progresses, you can enjoy more freedom in this regard.
For instance, you can impose conditions regarding the performance of your affiliates. You can introduce tier-based commission systems where they are progressively paid according to the volumes of the sales they generate for your business.
Step-4 Recruit and Train Your Affiliates
Affiliates are valuable assets for a business but not all affiliates have the same efficiency and effectiveness. Yes, you need to screen your prospects before appointing them as your business affiliates.
You can take assistance from the affiliate management program. These platforms can help you in finding top-rated affiliates thanks to a vast network of collaborative agents and teams.
If you are manually recruiting your affiliates, you must consider their marketing channels. These include blogs, social media, video streaming websites, microsites, email lists, etc. The success rate of these channels varies according to the number of users.
For instance, personal blogs are one of the most popular and successful channels for affiliate marketing. Thus, you can check the quality of the blogs of your potential affiliates to analyze their previous performance before their recruitment.
There are certain things that you must keep in mind to ensure that your recruitment process is implemented successfully. First, you must ensure that the terms and conditions are clearly communicated with these affiliates and that they agree to these conditions.
Second, you must continually train them with the latest skills in this industry to ensure that they follow the best practices to perform at the highest levels. Lastly, you must keep hunting for new talent and adding them to your team.
Step-5 Analyze the Performance of Your Affiliate Program
Performance analysis is just as important as any other business operation and affiliate marketing is not exempt from it. You must perform a thorough study of your affiliate program and its performance so that productive actions can be taken timely. All the previous steps involve lots of variables and you must analyze each one in considerable detail.
You can start by evaluating your own performance and then move on to the affiliate management app and your affiliates. While analyzing your own performance, you can consider whether you have obtained enough knowledge and skills to handle and monitor all the operations.
Regarding the management app, you can consider whether it has created value for your business and whether is it worth its price tag. Lastly, you can look for affiliate link click-throughs, visitor conversions, impressions, revenue, conversion rates, unique sales, etc.
Also, note that performance evaluation is an ongoing process. You’ll have to continually analyze the progress of your affiliate program to ensure that it meets your goals and objectives.
Creating a high-performing affiliate program is no easy task by any means. It requires lots of commitment and dedication on top of the required knowledge and skills to successfully launch and monitor this program.
This guide highlights all the essential steps involved in this process. They can help you out in getting a head start in your marketing campaign and achieving rapid growth.