How to Setup & Start an Affiliate Program?

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Ellie Updated: August 01, 2021

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In general, the final purpose of all eCommerce store as you are growing revenue by the maximum as well as focusing on driving more traffic to your site. One of the best strategies you will be excited is starting with an Affiliate program. It is great chance to manage the Affiliate network, a precious and powerful asset in your business. The Affiliates take responsibility of referring and promoting your products while you will pay commissions for them if they make profits for you. There are many ways to assist you to increase your sales, but Affiliate program will help you achieve your dream in the shortest and quickest way.

Table of contents

What Does Affiliate Marketing Mean?

What Does Affiliate Marketing Mean?
What Does Affiliate Marketing Mean?

At its core, affiliate marketing is a relation between a company and a marketer. The company rewards the affiliate marketers when they bring new customers to the company. Some companies will pay per lead, and others will pay per customer that registers and purchases products.

Most businesses make it easy to register as an affiliate and market their products. For some, it’s as easy as visiting their website and signing up in a couple of minutes. Others may require an approval process so they can check who is partnering with their business.

When the affiliate is accepted, the company gives them a special link that monitors customers as they click and buy products. And then, the company pays affiliates according to the data collected from the link.

What is the prep?

Ensure your price for Affiliate is the best

The vital link between the merchants and the own Affiliates which is the primary reason to motivate them to work in an effortless way is an amount of commissions they can earn. The charges are paid when a sale made from those who is referred to them. Thus, if you are not focusing on pricing the award, it is urgent to consider how to create the difference on the commission you will offer to your Affiliates.

Make referral tools available to use

If an Affiliate joins in your Affiliate network, there are obviously many similar choices outside he has interested. Because of that, your Affiliate Marketer are overloaded by a ton of products from different niches. A sincere advice for you is standing apart from the crowd by all means in your power and attracting the potential Affiliates’ attention on you. Providing as plenty of resources as possible to assist them to promote you up or run your program smoothly. Since then, they can make money quickly. Some suggestions are mentioned if you have no ideas:

  • Referral link

  • Graphic banners

  • Some helpful articles

  • Excerpts of your products

Aware that the more comfortable Affiliate feels from you, the more sales both you and Affiliates will make.

Create a dedicated Affiliate page on your website

This page will describe your Affiliate program in detail, and you can share openly with your Affiliates. They may be:

  • How much commissions Affiliates get when making a sale?

  • How to use the earned commission?

  • Which do rules Affiliates need to comply?

Human Resource in Affiliate Network is ready

The success of Affiliate program depends mostly on the team working for you. It is necessary to equip a powerful Affiliate Network before you starting up the Affiliate program. But how to build a robust Affiliate Network? You will find a fantastic answer in the blog Why Affiliate Marketing is important?

Starting the stage of success

Request feedbacks from your Affiliates

The smart way to understand how your program is working or what are troubles in the process of the program is communicating with the insiders - Affiliates directly. That is also the wise measure to know you should do next when there is an abundance or a stuck of sales. Creating a short online survey with SurveyMonkey or contacting Affiliates via email is the great idea for you.

Keep your eyes on Affiliate program

As the growth of your Affiliate program is visible, there is little things you need to improve to make it better and more relevant to the current status. Don’t forget this step if you want more success.

Continually contact with your Affiliates

Keep in touch with your Affiliates regardless of new person or those who have worked with you for a long time. The communication needs to be often enough to keep their interests in promoting your work. Moreover, you can collect and add their emails to your mailing list, then send some useful information about your Affiliate program frequently. In conclusion, let show that you are always here whenever they need.

The Guide to Start an Affiliate Program

The Guide to Start an Affiliate Program for Beginners
The Guide to Start an Affiliate Program for Beginners

Starting an affiliate program can boost your revenue, but some businesses are hesitant to get started. Whether it’s because of lack of time, expertise, or fear of making mistakes, this means they are missing out.

Affiliate marketing is an incredible way to enhance brand awareness, create leads, boost sales with less risk than traditional channels like advertising.

1. Select your affiliate platform

Affiliate platforms enable you to control every aspect of your program from one location. You can recruit affiliates, upload banner advertisements, implement tracking analytics, and handle commission pay-outs. These platforms make the whole process more cohesive so that your affiliate program runs smoothly.

There are some major affiliate platforms that you can select from, along with several smaller operations that are quickly achieving traction. Choosing the most suitable one will depend on the particular requirements of your business. While some platforms have a wider reach in the USA and Canada, others are larger worldwide. Many have publishers in certain industries, so you need to pick one that matches your target audience. Some of the most well-known affiliate platforms include:

  • CJ Affiliate (formerly called Commission Junction) - one of the biggest and longest-working platforms with a tremendous read across 285,000 publishers.
  • Rakuten (formerly known as Linkshare) - a major international affiliate network run by the Japanese music giant of the same name.
  • Share A Sale - a huge network with a central focus on the US and Canada.
  • Affiliate System - Buid custom for your eCommerce stores. Ex: Affiliate system for Magento 2 stores

2. Recruit your affiliates

Recruit your affiliates
Recruit your affiliates

Finding new affiliates is one of the most time-wasting tasks when starting an affiliate program. That’s why you should draw a clear strategy.

You want to find expert affiliates in your niche, but there is nothing ensuring who will drive sales. Therefore, you need to concentrate on the number of marketers you recruit. Here are four great strategies to recruit affiliates:

Access your customers

Approaching your existing customers is one of the simplest ways to recruit new affiliates.

The good thing is, existing customers are already familiar with your products, so you can skip the product introduction part.

Your clients already understand the value of your goods. And if they are satisfied with your solution, suggesting your brand to others might be obvious. As they have a good understanding of your products, they can explain your products to others with ease.

To select potential affiliates from your customer base, a Net Promoter Score survey comes in handy. The survey is created to assess how happy your customers are with your goods and if they are willing to suggest your goods to others.

Implement the survey and find out the highest-scoring customers.

Look for competitors’ affiliates

Do any of your competitors run an affiliate program? If yes, you might want to find out who their affiliates are.

Backlink research helps you have a peek into your competitors’ connections and affiliates. You can take advantage of a tool like Ahrefs, Mangools, and SEMrush to run a backlink analysis of your competitors’ website.

Download a backlink report and begin sorting the links on domain authority and the amount of backlinks provided to the competitors’ websites. Check the links and see whether there are proper partners for your program.

Contact influencers, experts, and educators

Influencers in your niches can allow you to access new audiences that have an interest in your products or services.

Let’s dive into social media groups, forums, communities, and educational platforms. Then, search for the experts your target audience often listens to and check their follower base and what type of content they produce.

Next, you send a personalized message to invite them to your affiliate program, explain your products and why you think they would be beneficial in a partnership. Remember to send follow-up emails to those who haven’t replied.

When you can communicate with a potential affiliate, you can provide extras like a free item or a coupon to get them on board.

Use paid advertising

Paid advertising can be a perfect strategy to raise sign-ups on your affiliate page.

You can try experimenting with search ads on Google and social ads on platforms like Instagram or Twitter. Select platforms where your affiliates often visit and link your ads to your social accounts. Besides, it’s essential to monitor what type of affiliates sign up via the ad campaigns.

3. Build your commission structures

Build your commission structures
Build your commission structures

Regarding paying your affiliates, there are some commission structures to select from, including:

  • A flat fee
  • A percentage of the sale
  • Product credits
  • Recurring commissions

You can offer a flat fee for each purchase made or trial started. Or you can get the purchase amount of the referral and send a percentage of this as commission to the affiliates.

In case you have an established product or service, you can also choose to provide your affiliates with product credits. This may work if you want to recruit our own clients as affiliates.

Another choice is to pay your affiliates a recurring commission for each referral they obtain. In other words, provided that the referral stays a customer (or in a specific time frame), the affiliate gains another commission when they repurchase an item or renew their licenses.

A proper commission structure should be selected based on the types of activities and results you expect to get from your affiliates. This relation is close with what type of traffic sources you let the affiliates use.

Take a look at some popular affiliate commission structures.

Temporary incentives

When your affiliate program is launched, you can rocket your sales by giving temporary rewards to your affiliates. Temporary incentives can be implemented in the form of a contest among your excellent affiliates. For example:

  • Holiday-related higher commissions
  • Rewards for producing content
  • Rewards for selling new items

Scaling payouts

Scaling payouts help encourage partners to gain more referrals by raising the commission for a specific amount of sales.

For example, partners who gain less than 30 referrals per month earn a 15% commission. Meanwhile, partners who achieve 30 referrals or more will receive a 25% commission.

This gives extra momentum for affiliates to effort and acquire a higher commission percentage.

Two-tier payouts

In addition to building structures to reward affiliates for sales, you can decide to reward them for getting new affiliates.

This two-tier structure means you provide the affiliate a share of the new partners’ sales.

For instance, partner A introduces partner B to the program. Parner A receives a 10% commission on his own referrals but now can get another 5% commission for referrals from partner B.

A two-tier structure can be a clever move to expand your affiliate program and get more and more partners on board. It’s usually applied to less established affiliate programs to help drive new affiliates.

Categorized-tier payouts

This commission structure enables you to divide your affiliates in multiple groups.

For this structure, you decide the payout per category. For instance, you can divide your partners by the quality of referrals they get, the type of marketing activity they use, or the product category they promote.

This structure’s advantage is that you can segment and reward your affiliates based on their performance. This means you can give higher payouts to better-performing affiliates.

4. Maintain program compliance and fraud detection

Maintain program compliance and fraud detection
Maintain program compliance and fraud detection

Holding a successful affiliate program means that regulations and policies need to be strictly complied with. The policies will help protect your business and align the expectations between your brand and your partners.

Generate and update partnership policies

Make every effort for thorough and clear policies regarding both your affiliates and your company responsibilities.

Your agreements should cover some topics like:

  • Accepted and forbidden traffic sources
  • The usage of the brand’s trademarks and materials
  • The usage of discount codes
  • Offering potential customers precise information on prices, the use of affiliate marketing, etc.

Some common policies and agreements include:

  • Terms and conditions
  • Privacy policy
  • Cookie policy
  • Data processing agreement
  • Paid and organic search policies

It is important that your privacy policy and terms of conditions should cover your legal issues and the matters mentioned earlier. Your cookie policy is to provide insight into cookie tracking and affiliate attribution.

The data processing agreement is a legal one to make sure that you as a business can process data. Plus, paid and organic search policies are to guarantee that the affiliates drive traffic in a fair and transparent manner.

Companies and affiliates often compete for the same traffic, and you would specify what counts as valid traffic for conversions.

After determining whether you enable paid traffic or not, it’s necessary to figure out what exactly you enable. Your policy might contain limitations on using brand keywords, trademarks, direct links in the ad text.

For organic search, you might want to limit the use of back hat techniques to bring more traffic to your site; for instance, “cloaking” is the use of misleading URLs to clients.

Moreover, you can remind your affiliates of your brand’s terms of service and other agreements. Discuss updates clearly and timely and ensure your partners can find out your policies.

Resolving fraud

Protect your program from unwanted activities and invalid referrals by proactively dealing with fraud.

To save your brand and company, you need to have processes in place to recognize possible fraud and own the data to prove it.

Common practices are to identify abnormalities in traffic amount, conversion rates, and other metrics.

Additionally, you also want to keep transparency on the traffic sources utilized by the partners. Any strange metrics or activities can indicate a non-compliant affiliate.

There are also some external tools to support you in detecting fraud. These often work with a mix of ad and search engine technology and the fraud criteria and information you give.

Non-compliant partners will look for new ways to earn fraudulent commissions, so fraud detection should be updated on a regular basis.

5. Evaluate and improve your success

Evaluate and improve your success
Evaluate and improve your success

Key performance indicators will allow you to monitor the progress of your program. These metrics can analyze specific aspects of your program and help optimize your strategy.

Traffic numbers

The traffic driven by affiliates lets you know the influence of your program compared to other channels.

It’s also an amazing metric to check the improvement or decline of your program. If you keep recruiting affiliates but the total volume of traffic decreases, you might discover what causes this. Maybe some of your excellent affiliates became inactive, or you made several changes.

Percentage of active affiliates

It’s ideal to have many affiliates on board, but you will see that only a small percentage of them can create sales. Instead of concentrating on the number of affiliates, let’s keep an eye on the percentage of active affiliates.

Determine what it means to be an active affiliate and monitor this number over time. This percentage brings you insight into the quality of your partners.

It also offers you information about your recruiting strategies. You can recruit many partners, but the ones that can grow sales for your company are the important ones.

Lifetime value of referred customers

A customer’s lifetime value is an anticipation of the total amount of money a customer will give to the brand before churning. This value is predicted according to a forecast of how long you can retain your customers.

To generate a precise calculation, you need to evaluate your business’s churn rate, profit margin, and average revenue per user.

Customer Lifetime Value formula
Customer Lifetime Value formula

When you have your estimates, you can utilize the formula to find out the customer lifetime value. The customer lifetime value will show you how much profit an average referral can generate. This allows you to calculate an estimate of the amount created by the referrals. It’s also a vital figure to predict your program’s profitability.

The Bottom Line

Now you know the steps to start an affiliate program, are you ready to build one?

Similar to any other type of home business, affiliate marketing requires a huge amount of time and an attempt to develop your business and build rapport with your customers and your affiliates.

If you decide to conquer affiliate marketing, keep in mind that it’s not a fast or automatic business model, but you can run your own business with minimum risk.

Wish you all the best of luck!

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Ellie
Ellie
Ellie Tran is a content creator at Avada Commerce. She loves watching movies, baking and traveling. She always desires to learn more about marketing, especially content marketing, to gain helpful skills and knowledge.

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