Is your affiliate program undervalued, or do you get a quick “no” or “eye-roll” at the mere mention of launching one?
I’ve been there. I started working in affiliate in 2000 when there were just a handful of partnership types and the industry lacked transparency.
The word “affiliate” means different things to different people and often evokes a negative connotation. That’s because the affiliate program hasn’t always had a seat at the growth table and leadership doesn’t always fully understand it. It’s seen as a risky black box that doesn’t add incremental value to the buyer journey or target your ideal customer profile (ICP).
How to share the value of affiliate partnerships
To help businesses see the revenue potential of affiliate partnerships, I start by aligning it to the partnerships umbrella already in place for other partner-led growth motions.
From there, I leverage the existing workflows to help operationalize the discovery, onboarding and sales enablement materials for affiliate partners to succeed. Getting buy-in on the measurement framework to evaluate performance reinforces the value affiliate programs bring.
One of the most important pieces that is often missed is creating a closed-loop process for learning, sharing and iterating. This helps to break down silos, keeps colleagues in the know, and ensures your affiliate program is transparent and fully aligned with the business.
How affiliates influence your ICP at every stage of the buyer journey
Affiliates can add value at all stages of the buyer journey for companies of all sizes. Here’s why you partner with them:
- Discovery: Affiliates have unique platforms and followings that allow brands to get introduced to new audiences.
- Brand credibility: Affiliates with strong domain and subject matter authority use their voice and credibility to promote brands in a way that resonates with their audience in your ICP, driving awareness, consideration, purchase and advocacy.
- Flexibility and control of cost: By paying on the outcome of conversion events, brands can control cost and enforce value throughout the sales funnel.
- Growth portfolio stability: Affiliates fill marketing gaps and can mitigate risk, for example when cost per click (CPC) and cost per mille (CPM) on the core channels spike or a privacy controversy removes targeting capabilities. It should be the lowest cost per acquisition (CPA) channel outside of organic.
- Control and risk: Brands decide who you partner with and the length of those partnerships.
How affiliates help close deals with SMBs
Suppose your target ICP company is an SMB with a self-service conversion funnel and/or a light sales-assisted motion.
In that case, affiliates should be the most efficient program in your paid media mix for driving new customer acquisition and incremental revenue.
Remember, you pay a commission on the outcome and can flex up or down based on quality and volume so it should be a predictable ROAS regardless of scale.
How affiliates help close deals with mid-market or enterprise companies
Suppose your target ICP company size is mid-market or enterprise. In that case, affiliates won't be able to close the sale — but they are in the sphere of influence of your target buyer.
They should drive micro-conversions (for example, downloads of a whitepaper you’ve produced or demos booked), that move future customers down the sales funnel.
In addition to driving purchase, affiliates provide content for reuse and tend to produce long-form, evergreen content that ranks in the SERPs, paying off in perpetuity.
Related: 10 key metrics that affiliate managers need to know.
Build a defensible affiliate program that proves value
At the foundation of an affiliate program that’s scalable, defensible and proves ROI by closing more deals with your target ICP is:
- Alignment: If you don’t want the “eye roll”, you have to gain buy-in and approval from key stakeholders on the right affiliate partners, sales enablement materials, KPIs and commissions for partners to succeed.
- Resources: You can’t just turn on the firehose of relationships to drive purchases. They need to be nurtured. That takes time and a dedicated resource to manage and grow the program. The program manager needs to work cross-functionally to source, recruit, onboard, activate and optimize partnerships that fill the gaps to drive incremental revenue.
- A solid foundation: The right tooling and data flow allow you to procure partnerships at scale, automate commission payout to the value in the sales funnel and gain real-time insights into the incremental value and quality of affiliate referrals. Adopting partner relationship management best practices and implementing workflows to recruit, onboard and activate affiliates will create operational efficiencies giving you more time to build relationships.
- An attractive commission: You have to offer something that 1. aligns with your business goals and unit economics, 2. is competitive, and 3. allows you to incent quality and volume.
Optimize and scale your affiliate program
Once your program is set up, the work doesn’t stop there. To continue support and resourcing for it across the business, you’ll want to keep an eye on the following.
Measurement
Report all the data that you will use to measure affiliate performance.
It’s easy for affiliates to see volume in their reports, but often, the quality measurement is missing making it difficult for them to adjust their marketing efforts.
Say a brand is paying affiliates on a lead, and the definition of a lead is that it is qualified, submitted to the brand and meets the following criteria:
- The lead submitted is complete and accurate and includes information like full company, phone and email
- The lead is net-new to the CRM (meaning, not previously submitted to the brand, not already in the CRM and is not an existing customer).
- The lead is within a country or region where the brand provides its service
You want to report all leads — including unqualified leads and their reasons for not being valid — so affiliates can understand the results and adjust. Most affiliates will test your funnel and tracking by becoming a lead themselves.
Say you are paying a small commission on a lead or free trial and a larger commission on a closed won opportunity or upsell to paid account, you’ll chain those two events using a unique identifier (for example, a customer email) so you and affiliates can run funnel reports seeing conversion rates, getting a sense of quality.
Source and recruit to the gaps
Most affiliate programs suffer from the Pareto Principle in which approximately 80 per cent of affiliate partner revenue is driven by 20 per cent of partners. Over-reliance on a handful of affiliate partners or one partner-type (for example, review sites) is risky and not defensible.
The most defensible, predictable and scalable affiliate programs I have seen have a breadth of partnership types and approximately 60 per cent or higher volume coming from the long-tail of affiliates.
These partners have high-intent audiences and work on a pay-per-performance model only helping to fund partnerships that require a hybrid flat fee + higher commission structure.
Just as brands want to diversify their customer acquisition strategy, it’s important to diversify partnerships in your affiliate program. Source and recruit affiliates that fill gaps you aren’t reaching through other channels to drive incremental revenue. Remember that affiliates can add value at every stage of the buyer journey.
See more: How to add a referral program to your affiliate partner program.
Onboard, activate and optimize
Building a productive affiliate partnerships engine requires constant learning, sharing and iterating with a fine tooth comb. Consider reviewing and optimizing the following areas:
- Incentives: Test and optimize activation campaigns. Increase commissions rates or distribute bonuses to reward and further incentivize top performers.
- Education: Build onboarding resources to pave path to performance like welcome kit, one-pager, FAQs, “how to” guides and approved content for easy plug and play.
- Communication: Create and send monthly affiliate newsletters and establish stronger direct relationships with top performers and rising stars.
- Assessments: Provide routine assessments of affiliate performance down to partner level.
Once you have developed and launched efficient partner onboarding and communication processes incentivizing affiliates to drive quality at scale, you’ll mitigate risk and set clear expectations of the role of affiliate in your customer acquisition strategy.
