Set up an affiliate marketing program
1. Hire or appoint somebody who is responsible for affiliate marketing. Alternatively, outsource this work to a third-party.
Calculate what it would cost to create an affiliate manager position within your company and what it would cost to outsource before you make the hire. Adjust the salary for the affiliate manager position depending on whether you require additional services from them, such as the design and development of the program.
2. Choose between affiliate networks such as ShareASale, Rakuten, ClickBank, and Commission Junction, or specialized software in-house like OSI Affiliate, TUNE, and 2Checkout as it suits your business.
Enjoy the benefits of existing affiliate networks that cover merchants and affiliates with tracking, maintenance, and payments management, however, vet the quality of affiliates who join your program when you become part of networks to ensure you are working with reputable ones. Use more freedom and customization options with specialized software, it’s easier to track individual performance, however, set a budget for monthly fees.
3. Provide your affiliates with as much pre-made promotional content as possible, like promo videos, banner creatives, professional product images, landing pages, email templates, and text ads.
For example, ConvertKit has provided its affiliates with free content they can use, like video training lessons, webinars, brand assets, graphics, and other shareable material.
4. Increase your sale prices if you go with paying commission per sale basis, and keep your prices the same when you opt for paying commissions on a per lead basis (PPL).
For example, on a per-sale basis, which is the most frequent type of payment commission, raise the price of t-shirts that cost $10 to $11.20, so you can pay affiliates with 12% of the sale. When on a per lead basis (PPL), keep the price of the product unchanged as the commission comes out of the profit margin. This form of payment is typically reserved for markets where leads are very easy to generate, where the product is easy to sell due to limited options or the customer has an immediate need. For instance, Mazda got 29% more people to test drive their new cars through an online lead generation affiliate campaign. Know your customers really well and also the customers of your chosen affiliates to get the most of per lead basis models.
5. Calculate your average commission based on your operational costs and profit margin, to ensure you are neither paying too little nor too much to those who partner with you.
Consider the following calculation model: (A) Calculate the maximum commission that you can afford, include all costs involved in the calculation, from platform costs to management costs, then take a look at your profit margin as well. (B) Do a thorough analysis of what other programs offer on the base level to ensure you’re competitive. (C) Decide on the amount of the maximum commission that you want to leave for bonuses, performance-based stuff, and private offers. (D) Subtract A from C to get your base commission.
6. Offer higher commissions to affiliates that consistently send quality traffic your way.
For example, Amazon rewarded quality traffic with its Amazon Associates program. The more people would buy through affiliate links, the more commission affiliates would get.
7. Use affiliate networks, affiliate forums, and blogs, or run a PPC campaign for your affiliate program to recruit more people into your program.
For example, join the top affiliate programs in your niche to get insights into who are top affiliates, what kind of support they’re getting, and so forth. Use the information you collect to put together a comprehensive offer and contact them directly.
8. Prepare a killer offer that includes necessary information like conversion rate, commissions to your current traffic, and creative collateral, when you approach super affiliates who you want to get onboard your program.
Identify mature affiliates who can drive a lot of sales and are making at least five figures a month in gross profit. Super affiliates are specifically looking for programs with a high conversion rate, and where the shared revenue with the affiliate is decent, so consider these facts when you prepare your killer offer. Be ready for super affiliates to want to test-drive your program and see how it works on their audience. If they are not happy with the results, they’ll drop out.
9. Use an affiliate newsletter to keep affiliates informed, just like you would any other consumers.
For example, a well-designed newsletter may include stats on top performers, case studies, tips, upcoming promotions, new products, or any changes in a commission that are due to take place.