How To Launch An Affiliate Program [Step-By-Step Complete Guide]

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Updated: October 8th, 2022

What Is Affiliate Program?

Affiliate marketing is a great way to bring in a new revenue stream, especially when you don't sell products or services.

Simply put, an affiliate program is an agreement where a business pays another business or influencer ("the affiliate") a commission for sending traffic and/or sales their way.

The affiliate typically gets a unique link where clicks and conversions can be tracked.

Affiliate Marketing Key Takeaways

The spending on affiliate marketing makes up 16% of all online orders.
Affiliate content continues to increase and has grown by 175% in recent years
After surviving the worst of the COVID-19 pandemic, affiliate marketing is now seen by some of the businesses as a key to their recovery

Understanding How Affiliate Marketing Works

Marketing can be a costly investment for startups. This is because startups end up putting big investments into advertising, resulting in an elevated risk if the advertising strategies do not work as expected.

However, with affiliate marketing, you are finding someone else who is better at marketing to take up the risk and advertise or promote your products.

Therefore, you (the business) will pay the affiliate a commission for every lead or traffic to the business's products or services.

In that regard, the affiliate is a third party, and the commission is what incentivizes them to find ways to promote the company’s products.

The affiliates promote the business's products or services by running banner ads, text ads, or shareable links on its social media, websites or sending emails to potential customers.

When potential customers click on the ads or the links, they are redirected to the e-Commerce site. Whenever a sale is completed based on the affiliate link, the merchant credits the affiliate account with the agreed-upon commission.

Benefits Of Running Affiliate Programs

The primary reason your business would consider an affiliate program is to effectively market products and services, and ultimately increase sales.

However, businesses are seeing more benefits of affiliate programs in their strategies today.

Here are the benefits of affiliate marketing on your business.

Costs Less To Launch

An affiliate program may not require spending a huge amount of monies to recruit the affiliates. Besides, you will not require setting up advertisements or purchase advertising space.

Instead, you will depend on the affiliates to come up with their marketing content and targeting strategies.

All you need to concentrate your effort on is selecting and vetting potential affiliates.

Low Risk

Unlike an in-house advertising plan, affiliate programs do not cost your business unless a sale has been realized successfully.

Therefore, the business owner does not end up paying thousands of dollars into advertising programs that do not work as expected.

Low Ongoing cost

With affiliate programs, most of the marketing activities are done by the affiliates.

The affiliate marketers bear the cost attached to marketing your products. Since the program is commission-based, you only pay the affiliate from the sales they realize.

The affiliate marketing model makes costs easy to manage and does not interrupt your cash flow.

Higher ROI

Affiliate marketing has a higher return on investment compared to a majority of marketing strategies.

The reason for a higher ROI is that the target audience hears of your products or services from affiliates.

Besides, the business does not incur the cost of advertising, they only pay the commission as agreed.

Helps Build Trust and Credibility

Another benefit of running an affiliate program is that you build trust and credibility.

Today’s consumers would rather take someone else’s word about your products and services over your own.

Therefore, affiliate marketing helps bring more credibility from the potential customers.

Affiliate marketing is quickly becoming the central aspect of many marketing strategies. This is largely because of the benefits discussed above.

Real World Examples: Launch An Affiliate Program

1. How Sendinblue Affiliate Program Helped The Bran

Sendinblue affiliate program has two different streams: one for agencies and another for bloggers.

Sendinblue provides €5 when a referred user creates a free account + €100 if that user purchases a subscription.

2. Etsy Uses Awin Affiliate Program To Increase Sales

Etsy is an online marketplace where vintage retailers and crafters set up online stores, allowing them to become business owners.

The online marketplace set up an affiliate program managed by Awin for North America, Europe, and the rest of the world.

In the case of the Etsy affiliate program, the affiliates receive a commission of 4% for the standard publisher referrals and 2% for referrals generated by user-generated content

Steps To a Successful Affiliate Program

Here are seven important steps for setting up your affiliate program.

Step1. Set Goals For Your Program

Like all marketing programs, setting up an affiliate program requires an elaborate set of goals.

Set a few top measurable goals for your program to help you determine if the program is successful.

Therefore, you will want to come up with the following goals:

The amount of revenue you would like affiliates to bring in per month
Set goals for conversion rates and determine how often you want people who click on affiliate links to make a purchase
Set goals for the average order value driven by affiliates
Determine the number of unique affiliate sales in the given time period

Setting goals will be helpful in measuring your affiliate program's success.

Step2. Analyze Your Competitors Affiliate Programs

By the time you are settling on an affiliate program, you most probably have determined your business strengths and weaknesses, and those of your competitors.

If your competition has an affiliate program, now it is time to look into your competitor's affiliate programs.

Even before designing your firm's affiliate program, conduct a specific analysis of the available affiliate programs.

This initial analysis lets you know where you stand and allows you to position your program competitively.

To run a successful competitor analysis consider the following tips:

Find at least two competitors with affiliate programs
Look at how each competing program structured their affiliate commissions
Determine how each brand finds their affiliates
What are the terms and the conditions of each affiliate program?

Step3. Decide On the Right Affiliate Commission

Based on the findings from the competition analysis, come up with a structured affiliate program.

Remember that one of the most important aspects of an affiliate program is how you pay the affiliates. More important, ensure you only compensate an affiliate whenever a sale is made via their affiliate link.

Step4. Set Up Other Terms And Conditions For your Affiliate Program

Apart from the commission, you will also need to decide and set up terms and conditions for your affiliate program.

Therefore, come up with information on:

How you will allow affiliates to promote and distribute their affiliate links
How long do the affiliate cookies remain active
Come up with a strategy to make your affiliate program stand out
Who will be responsible for running the affiliate program

Determining the above from the onset allows you to run a successful affiliate marketing program.

Step5. Start Finding Affiliates

With the program structure ready, now it is time to start finding affiliates. At this point, you need to determine whether to use an existing network of affiliates or to form your own affiliate network.

No matter the route you choose to find the affiliates, you will need an affiliate tracking method that lets you enroll affiliates, set up unique affiliate links, and monitor affiliate earnings.

Step6. Recruit And Train The Affiliates

Once you have chosen the best-fit affiliates, reach out to them to see if they are interested in joining your affiliate team.

The goal is to find high-quality affiliates and avoid scammy ones. Thus, be sure to screen the potential affiliates.

Step7. Keep Track Of the Affiliate Program

Once you have started your affiliate program, you now need to track its success regularly.

Tracking affiliate program success is best done using affiliate program software. Alternatively, you could use an affiliate network you have signed up for.

Conclusion

We have looked at the important aspects when it comes to setting up an affiliate program.

When you are ready to start your affiliate program, first check the competitor's landscape. Then, design an affiliate program that sets your brand apart in the affiliate's eyes.

Remember an attractive commission will catch the attention of most successful affiliate marketers.

meet the author

Pat Walls

I'm Pat Walls and I created Starter Story - a website dedicated to helping people start businesses. We interview entrepreneurs from around the world about how they started and grew their businesses.

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