Affiliate programs boost your revenue without the overhead of a dedicated sales team. But successful affiliate programs, even retail ones, don’t happen overnight. Much of the most critical work occurs before you sign your first affiliate or make your first sale.
Before launching your affiliate program, you need a solid action plan to understand your market, build relationships, and scale your program.
10 questions to answer before launching your affiliate program
1. Who are your key customers?
Affiliate sellers do their market research, so they know how to talk to their customers.
But that’s only half the story. If you have a working model for your key customers, you can use that model to vet and approach potential affiliates. This tactic ensures you work with those most likely to reach audiences interested in your offer. Identifying customer personas gives you insights into how your products are services solve problems for a specific audience.
2. What does your core affiliate look like?
Research the type of affiliate that would be ideal for your company. Creating an affiliate persona gives perspective into the ideal affiliate’s messaging, interests, and where they typically network.
3. What are your goals?
Many people setting up affiliate programs have only the nebulous goal of “making more money.” Although this is the ultimate goal, it’s not a goal that spurs action.
Instead, make your goals measurable and give them a timeline. “I want to make more money” is terrible. “I want to increase monthly sales by $5,000” is better. “I want to increase monthly sales by $5,000 before the end of the quarter” is excellent.
Besides that specific goal, you can set essential goals toward other metrics, like the number of affiliates signed up, total platform reach of all affiliates, and net profits from affiliate sales. The more you set and measure, the better you can direct your company.
4. What commissions can you afford?
Run the numbers on your net profit for each unit sold, including affiliate commissions. Adjust your commissions downward until they work. If you can’t find a good balance between commission rate and results, you’ll need to find other places to cut costs.
Remember, if your commissions are too low, affiliates will be less motivated to prioritize your products. If they’re too high, it cuts into your profits and you risk losing money.
5. What are your competitors doing?
Researching competitors starts with X. Many affiliates won’t work with direct competitors, but that doesn’t mean all bets are off. If they have a better offer, you may lose your partnership.
Review your competitors’ most effective copy, branding, and graphics. See how audiences engage with the brand, and take note of questions that come up. You can fill the gaps in your content when you see what’s missing from your competitors messaging.
6. How will you handle problems?
Prepare yourself on how to handle conflicts and miscommunication with affiliates. Affiliate marketing partnerships are like any other relationship — they take some work. You’ll likely deal with affiliates who don’t make enough sales, game the system, use black hat techniques, or put forward an unsavory image.
It’s best to have those policies and procedures already thought out and written in your affiliate agreement. If you make them up on the spot when you’re in the mix your business will suffer.
7. What platforms will you use?
You can’t scale affiliate marketing without a platform for those partnerships — and your web presence, payment processing, and team commission distribution.
Consider platforms that handle multiple aspects of the process or ways to bundle the costs and administration. Not every “all-in-one” platform saves money and hassle, but it’s worth looking into your options early to choose the best fit.
8. How will you train affiliates?
The more affiliates know about your business, products, and customers, the better they’ll be able to sell what you offer. Create a consistent, well-organized training program to teach them all they need to know.
Better yet, produce something automated so each new affiliate doesn’t require several hours of direct training from somebody on your team. Free self-paced online platforms like the Partnerships Experience Academy are well-suited for this purpose.
9. What sales assets will you provide?
Remember that affiliate sellers divide their time among multiple brands while focusing on strategies their followers appreciate. They won’t guarantee to create videos, images, content, or other assets to help sell your products.
It’s best to develop a suite of those assets and make them available to your affiliates from the outset. In most cases, you can borrow them outright from your press and marketing materials. You can also adjust them to better suit your affiliate programs or the specific needs of a given partner.
10. How will you sell upstream?
It’s important to remember affiliate marketers are great for bringing you that first sale. But their commissions make the sale expensive. You profit most from the second, third, and subsequent sales to customers. You can also earn more revenue from membership service offerings.
Set up an upselling system before you start onboarding affiliates. Even a coupon to send for the next purchase will exponentially increase the profits you get from each affiliate sale.
It’s a marathon, not a sprint
One final hurdle that stops many affiliate programs is an expectation of quick returns. You won’t see results overnight, no matter how large your pool of talented affiliates.
Focus on slow, steady growth as you add a few quality affiliates at a time. Get those first sales, then look to scale. Learn how to turn those initial sales into high-value, lifelong customers. Build slowly, with confidence and a plan.
Join the Partnerships Experience Academy program for free to elevate your career and learn how to:
- Illustrate the various types of digital marketing and their pricing models.
- Identify the four players in the affiliate and partnerships industry, as well as how they work together to provide value to consumers.
- Understand why partnerships are so important in driving business growth.
- Outline how assorted verticals can use partnerships to drive results and how to set payouts accordingly.
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