Running an affiliate program can create a powerful revenue stream for your online business, so it’s no surprise that more and more people are taking this option. From driving up sales through affiliate links to simply spreading the word about your brand, growing your reach and bringing in new customers in the long-term, there are so many reasons to run an affiliate program.
But too many brands are treating affiliate programs like a golden goose. Your affiliate programs won’t reach fruition without nurture and investment. Precisely because affiliate programs can be so profitable, people forget to take care of them and fall into costly traps that damage their revenue streams.
The majority of affiliate programs are making money – recent studies reveal between 5% and 20% of merchant income came from affiliate programs. But imagine how much that could be if you eliminate the mistakes and run a streamlined affiliate program?
So, if you’re a vendor or affiliate, and you’re not convinced, let’s explore just why affiliate programs are so powerful. And then we’ll check out ten mistakes you need to iron out for a smooth – and profitable – affiliate program experience.
Why You Need An Affiliate Program
The decision to commit to affiliate programs can be one of the best you’ll ever make for your business. From SaaS to ecommerce, every business that operates online can turn affiliate programs into a secondary revenue stream – as well as a cost-effective form of advertisement. Let’s look at these dual roads to income that affiliate programs can provide.
Affiliate Sales
The primary reason that organizations go into affiliate programs is to discover new avenues towards selling products and services. With an affiliate program, you’re hitting new customers and market segments that would otherwise be missed, so it’s an instant revenue stream that doesn’t disadvantage your traditional customer base.
What’s more, you’re only paying for the privilege when you get results: because affiliate programs are financed by a small percentage of sales, there’s very little risk. When affiliate programs are working, they’re bringing in an income and if they’re not, they don’t cost a penny.
Growing Reach
Choosing the right affiliates doesn’t just boost your revenue. By reaching out to your customers and encouraging them to add affiliate links on their website, you won’t simply create a direct revenue stream from new buyers following those links. You also begin to enormously expand the reach your organization has, and take steps towards becoming a dominant brand in your industry.
It’s highly likely that amongst your customers are new segments of the market waiting to stumble onto your organization, and by building an affiliate relationship with your existing customers you’re creating highly targeted marketing missives in exactly the right place. Affiliate marketing is an explosive method for growing your reach in your industry, and it can be especially powerful for new and emerging brands. It starts with sales, but simply being seen can have valuable consequences.
Vending
As a vendor, you’ll need to ensure that your customers are safe online when they shop in your store. In other words, their online shopping experience should be secure from start to finish.
One thing to remember is that there are certain regulatory standards for each country. For example, in Europe, the Strong Customer Authentication (SCA) was established in September 2019, mandating vendors to make their eCommerce businesses secure enough for customers to purchase products and services. So, you’ll need to double-check with different countries before marketing products and services to international consumers.
7 Common Affiliate Mistakes To Avoid
Because affiliate programs are so powerful, it’s easy to “set and forget,” and enjoy your new income stream. But to maximize your profit and your reach across the web, it’s worth putting in a little work.
So, if you’re an affiliate and or vendor, here are the most common affiliate program management mistakes – and what you can do about them.
1) Not Vetting Your Affiliate Partners
In the rush to get an affiliate program up and running, it’s easy to miss this crucial step. Businesses think of affiliate programs and get dollar signs in their eyes – yes, the more affiliates you have, the greater your income. But it’s more complicated than that.
Your affiliate program partners will also come to represent you in the wider market, and whilst a few clicks might mean a short-term boost to your income, choosing the wrong affiliate partners can cause significant damage to your reputation in the market. For example, if your partners are prone to spamming customers, you’ll be cast in a bad light and lose revenue in the long term.
So, it’s important to do your due diligence on potential program partners before onboarding them into your affiliate program. Introduce a series of checks, taking in reputation and marketing practices, to ensure they’re right for you.
2) Not Promoting Your Affiliate Program
Once affiliate programs are rolling, they’re generating interest in your brand and a new revenue stream, but getting there takes work. Ideally, you want to create enough of a buzz about your affiliate program that potential partners are reaching out to you – creating a sense of competitivity amongst potential partners will give you greater leverage to agree terms, and let you get more out of the program.
Ideally, start promoting your program long before it’s launched. An email marketing campaign can build the hype amongst both customers and adjacent businesses, ensuring that when your affiliate links are up, they’re being flocked to. Create a dedicated landing page for potential partners to learn more about your program and the way it benefits them.
3) Skimping On Commission
Many organizations consider affiliate marketing as a cheap option – something to draw in revenue, promote your reach, and limit your expenses. And whilst it’s certainly a cost-effective way of increasing sales and marketing at the same time, it’s also about partnership so you can’t cheat your associates.
Calculating the commission that you offer to your affiliate partners should include several considerations. You want to attract quality partners from across the web, an association with whom will boost your brand recognition and create a mutually beneficial arrangement. You can also customize commission based on the value of the product or service your partners are linking – offer a healthy commission on premium products to encourage partners to get involved, and have a tapering scale of commission for further links.
Further to this, maintain your commission rates throughout the relationship. Don’t cut your commissions early into partners signing up. Attractive rates of commission will encourage partners to promote your product and let you get more out of the program.
4) Failing To Track Affiliate Activities
Because vetting affiliates isn’t a foolproof process, it’s important that once you have your affiliate program set up you engage in some form of maintenance of your partner’s activities. Affiliate programs live and die by the relationship forged between you and your partners, so it’s vital to remain engaged in how your affiliates are promoting your links and engaging with customers and clients.
Building a review process into your affiliate program gives you a regular opportunity to check in with your affiliates without it becoming confrontational. Further, tracking statistics such as clicks and views enables you to gauge the performance of your affiliates in an objective way. The temptation to set up an affiliate program and then leave it to its own devices is high, but staying engaged with your affiliates will let your program flourish.
5) Failing To Build Clear Marketing Guidelines
There are a range of strategies in digital marketing. Many practices and activities that can bring short term success will lead to long-term damage to your brand and reputation, and so as a business you’ve undoubtedly been building a portfolio of marketing practices which are acceptable as well as identifying those that are to be avoided.
Because affiliate programs are as much about growing your brand as bringing in revenue, it’s vital that your affiliate partners are on the same page about unacceptable marketing practices. Build a presentation about your brand’s marketing into your program onboarding to ensure that affiliates are following your guidelines. For example, some brands restrict how affiliates use Google’s AdWords to avoid cross-competition between affiliates.
6) Responding Slowly To Affiliate Applications
In the fast-paced world of affiliate programs, time is money. When a vendor applies to join your affiliate program it’s imperative that you respond in a timely manner, offering the vital information and launching an onboarding process while interest is high. Slow responses to affiliate applications can damage the way these affiliates engage in the program – even if you do bring them onboard, the initial buzz of the program will have been lost meaning that your links are poorly promoted.
7) Treating Affiliates LIke Customers, Not Partners
Building a strong relationship with your affiliate partners is the key to achieving your affiliate program goals. Through collaboration and cooperation, you can build an affiliate program that leads to success on both sides. However, many brands go into affiliate programs with a hierarchical view, treating partners like subordinates or even customers. This erodes mutual responsibility for the program’s results as well as limiting partner abilities to apply local knowledge in a flexible way. Remember, they’re called partners for a reason.
Conclusion
Affiliate programs can play a huge role in growing your business. But don’t take it for granted – if you want this goose to lay you a golden egg, you’d better ruffle some feathers. Choose your affiliates wisely, build strong relationships with them and grow a mutual network of cross-promotion to see your affiliate program hit new heights.