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How to create an affiliate program for your business

Publication date
Author
Imogen Beech
Reading time
15 minute read

We bang on a lot about the benefits affiliate marketing can bring to your business. Just read our guide to affiliate marketing or our list of affiliate marketing stats to see what we mean. A quick preview for you: affiliate marketing in the UK has an ROI ratio of 1:16 (according to AWIN) and it even drives 1% of the UK’s GDP (according to Wonder).

But if you want to benefit from the growth that affiliate marketing can bring your business, you’ll need to set up an affiliate program first.

Here, we’ll look at how to create an affiliate program for your business. And, just as importantly, how to create an affiliate marketing program that affiliates actually want to join.

How to create an affiliate marketing program that actually works

Every brand is different. And what works for one might not work for another. That said, no matter what kind of business you run or what sector it’s in, you’ll still need to go through the same process and make some big decisions about how you’re going to run your affiliate program.

To help you out, we’ve broken down the process of creating an affiliate marketing program into six simple steps. Let’s get started.

Step 1: Choose how you’re going to run your program

The first decision you’ll need to make is whether you want to run an in-house affiliate program or whether you'd like to use an affiliate network. They both have their pros and cons, so take your time to consider which option will work best for you and your business.

An affiliate network is basically a one-stop shop for your affiliate program. It will allow you to find and manage affiliates, as well as track their performance, issue payments and generate reports. However, there are downsides.

First, an affiliate network will only help you find affiliates who have signed up with that network. 99% of those are likely to be Instagram influencers. While working with influencers on Instagram can be beneficial, it has its limitations (read our piece on the problems with Instagram paid partnerships to see what we mean). Most brands certainly won’t want to work with only Instagrammers, so you’ll need to find a way to source other kinds of affiliates too (clue: Breezy can help!).

Affiliate networks also take a pretty big chunk of commission from the sales you generate from your affiliate marketing (normally around 30% of what you pay your affiliates). So, it’s almost always the more expensive option.

On the other side of things, running your program in-house is more work but it will give you more control. It’ll also cost less.

While you can create your own tracking and reporting systems, most brands that run in-house affiliate programs choose to keep things easy by using affiliate tracking software instead. There are lots of different options out there (in fact, we’ve laid out our top picks in our piece on the best affiliate tracking software). But for the most part, affiliate tracking software offers all the same benefits you’d get from an affiliate network (think affiliate management, tracking, issuing payments, reporting…) – just without the affiliate discovery included. But again, you can just use Breezy for that (yeah yeah, we know we’re biased. It’s true though!).

Ultimately, there’s no one right answer, and what works for one brand might not be the best decision for another. Check out our article on in-house affiliate programs vs affiliate networks for the full lowdown.

Step 2: Design an appealing program

Whether you choose to run your affiliate program in-house or via an affiliate network, the next step is to decide how it’ll work. How much are you going to pay your affiliates? When are you going to pay them? Who gets the commission if a consumer clicks on more than one affiliate tracking link?

The key here is understanding that there’s no point in creating an affiliate program that no affiliates actually want to join! So, you’ll need to treat your affiliate program as if it’s a product, and your affiliates as if they’re your customers. This means making your program as appealing as possible and giving your affiliates clear reasons as to why they should choose it.

As part of this, we’d recommend checking whether your competitors have affiliate programs (they probably will!) and taking a look at what they offer their affiliates. You’ll want to provide at least a similar level of value, otherwise, affiliates will have no reason to choose your program over theirs.

Here are the main things you’ll need to decide on.

The goalposts

First things first, decide what your affiliates have to do in order to get paid. Affiliates get paid based on performance, which means that every time their promotions convert, you pay them. However, what exactly counts as a conversion is up to you.

You can choose to pay your affiliates based on a number of models, but the most common is CPA (cost per action) or CPS (cost per sale). If you opt for CPA, you’ll need to decide what counts as an action. Are you going to pay your affiliates for each product demo booked? Or for each email list signup? The choice is yours.

You can also decide to pay affiliates based on other metrics, such as CPL (cost per lead), CPC (cost per click) and CPM (cost per thousand impressions).

As far as we’re concerned, there’s not a whole lot of benefit to paying your affiliates based on CPC or CPM. At the end of the day, there’s no guarantee that someone who views an affiliate’s promotion or clicks on one of their links is actually going to generate you with any income. So, you could easily end up spending more money on affiliate promotions than you’re generating.

On top of this, online advertising platforms like Google Ads and Facebook already offer CPC and CPM. So, is there really a whole lot of benefit to an affiliate marketing program that does the same? We’re not convinced.

However, it’s important to remember that while it’s safest for you as a business to pay your affiliates as far down the marketing funnel as possible, it’s going to be safest for most affiliates to get paid as close to the beginning of the marketing funnel as possible. So, if you’re operating in a competitive market, rewarding your affiliates for those earlier goalposts (such as CPM and CPC) could help you to acquire more affiliates.

Just remember to tie in your goalposts with your company’s KPIs and customer flow. To give you a really crass example, there’s no point in paying your affiliates for every email signup they generate if you’re not even planning on carrying out any email marketing. You get the idea!

Goalposts of your affiliate program

Commission rates

Now that you know what you want to reward your affiliates for, you’ll need to decide how much to pay them.

If you’re going to be paying your affiliates per click or per impression, you’ll need to decide on a set fee for each conversion. However, if you’re going to be rewarding your affiliates per sale, you can choose between paying them a set fee or offering them a revenue share. Or, you can do a bit of both, known as a ‘hybrid’ reward structure.

Most brands will offer affiliates a percentage of each sale, which could be anything from 1% to 40%. Of course, the higher the percentage you can offer, the more attractive your program will be to affiliates. Brands that offer at least 25% are likely to be much more desirable. But it’s not as simple as just that.

For instance, consider the average value of each sale. If your average product sells for £1,000 and you offer your affiliates a 1% commission, they’ll still earn more per sale than they would if you were offering a 40% commission but your average product sold for £10.

That said, you’ll also have to bear in mind the volume of sales that an affiliate can expect. If your affiliate promotes a £10 product, they’re likely to generate many more sales than they would from a £1,000 product, simply because the higher-value product will require a lot more consideration from a customer before buying.

With all that in mind, there’s normally a balance to be had. When you’re working out how much commission you should offer, have a look at what your competitors are offering and use that as a guide.

Make sure you also bear in mind how much it costs you to acquire a new customer. You’ll need to consider all your costs, from manufacturing to shipping, and then check that you’re still leaving yourself with enough profit.

In general, commission rates tend to be lower for brands that offer physical products, simply because of the overheads involved. Meanwhile, brands that sell services or software can often afford to offer higher commissions because there’s little to no cost involved in fulfilling an order.

If you find that you can’t offer a very high percentage of commission, you might be able to make up for it in other ways. For instance, brands that sell subscription products could consider offering affiliates ‘recurring commission,’ which is where the affiliate receives a percentage of each payment the customer makes for the duration of their subscription. This could be for a set period (for example, 12 months) or it could be over the course of a customer’s lifetime.

This can understandably be a big draw for affiliates as it gives them a way of earning passive income each month.

Attribution

Next, think about who you want to reward in the case that a customer clicks on more than one affiliate’s tracking link before converting.

You could give all the credit to the first affiliate (known as ‘first click’). After all, they’re probably the ones who first alerted your customer to your brand. Or you could give the credit to the last affiliate (known as ‘last click’). It’s likely thanks to them that the customer received the final push that got them to convert.

Chances are though, you’ll want to do a bit of both. All the affiliates a customer interacts with before converting have played a part in generating your brand with income, so it seems only fair that they should all receive a proportion of the reward.

Ultimately, you can choose exactly how much credit (and how much of the reward) should go to each affiliate along the way. But there are a few popular attribution models that make a good starting point.

  • Linear: A linear attribution model is where every affiliate involved in a conversion gets rewarded equally.
  • Time decay: With time decay, every affiliate involved gets a portion of the reward, but those involved towards the end of the customer’s journey get a higher percentage than those involved at the earlier stages.
  • U-shaped: U-shaped attribution is also known as ‘position-based.’ In this model, every affiliate gets rewarded, but those that achieve the first and last clicks get the highest percentage of the reward.

If your affiliate program rewards all the affiliates involved in a conversion, rather than just the first or last click, it’s likely to be more appealing to affiliates. After all, there’s nothing that people like less than not being rewarded for their hard work! But it goes a bit further than that.

Imagine a consumer views a really convincing promotion for your brand from an affiliate. They click on the tracking link and decide to buy your product. Hooray! We’re sure you’ll agree that the affiliate did a great job and deserves a reward.

However, imagine the consumer now goes off and searches Google for a discount code for your brand. They land on an incentive site that asks them to click a button to reveal their discount code. Well, that button was a tracking link!

The consumer may or may not have revealed a discount code that actually works. But either way, they’re going to go on and make a purchase, and the incentive site has won the last click!

If you’re using the ‘last click’ attribution model, a lot of hardworking affiliates (like the first affiliate in our story) won’t get rewarded for their efforts. Meanwhile, incentive sites like the one in our story get a big reward for doing… let’s be honest… not a lot!

By using attribution models that reward affiliates more fairly, you’re likely to find you attract (and retain) higher quality affiliates who create well-thought-out promotions for your products.

Cookie duration

Most affiliate programs use cookies to track where customers have come from and correctly attribute sales to affiliates (although it’s not the only tracking method or even the best). One thing that affiliates will normally consider before joining an affiliate program is your cookie duration.

Many affiliate marketing programs use cookies that last around 30 days. This means that, if a customer clicks on an affiliate link but doesn’t make a purchase until 28 days after, the affiliate whose link was clicked will still take credit for the sale and get rewarded for it. However, if the customer instead makes a purchase 31 days after clicking the tracking link, the cookie will have expired and the sale won’t be attributed to the affiliate at all.

What this means is that the longer your cookies last, the more likely your affiliate is to get rewarded for their efforts. So, if you can ensure that your cookies last a decent amount of time, your affiliate program will be more desirable.

For instance, ClickFunnels uses something called ‘sticky cookies.’ This means that once an affiliate’s link has been clicked, they’ll get rewarded for any product the customer buys from ClickFunnels, throughout their entire lifetime. Our selection of the best affiliate programs has the full lowdown.

Terms like this can be a great way of making your program more attractive, especially if the commission you’re able to offer is relatively low.

Affiliate program cookie duration

Be creative!

Think outside the box when it comes to finding ways to make your program even more appealing. Particularly if your competitors have created affiliate programs with high commissions that you can’t quite match.

Just a few ideas to make your program stand out to affiliates in all the right ways include:

  • Offering affiliates a dedicated affiliate manager.
  • Having a support phone line or live chat available to them with a fast response time.
  • Fast payouts (some affiliate programs make affiliates wait until they’re owed a certain amount of money before paying out).
  • Free products or discount codes.
  • Access to creative assets to make promoting your products easier.

Ultimately, every brand is different, so the chances are you’ll be able to offer your affiliates something that no other brand can. Plus, don’t underestimate how important the little things are – like being good to work with and going above and beyond to make your affiliates’ experience a good one. It’s not all about the commission, after all!

Step 3: Decide whether you want to vet your affiliates

Once you’ve decided how your affiliate program’s going to work, have a think about what kind of affiliates you’d like to work with. Do you want to only work with affiliates of a certain quality? Or are you going to opt for a ‘the more the merrier’ approach?

Because affiliate marketing is performance-based, you might decide you want to focus on quantity rather than quality. After all, if an affiliate doesn’t provide you with any value, you simply don’t have to pay them!

However, there can be some benefits to vetting your affiliates a little more carefully. For example, you might want to avoid working with affiliates that use unscrupulous practices (like some of the incentive sites we mentioned earlier). Or, you might want to maintain a tighter level of control over how your brand is portrayed to the public.

Some brands choose to only work with affiliates who are already tried and tested. For example, they might put in place a minimum number of followers that an influencer needs to have on social media in order to qualify for their affiliate program. Or, they might require bloggers to have a certain amount of monthly traffic.

However, it’s important to note that small affiliates and micro-influencers can have a bigger impact than you might think. Especially if they have a niche following that’s relevant to your brand.

So, if you want to vet your affiliates, it might be more relevant to simply get them to submit an application and assess them each manually based on their individual merits.

Alternatively, a lot of brands do away with the vetting and instead ask affiliates to agree to certain terms and conditions when they sign up. As part of this, you can outline specific behaviours you expect them to abide by when they’re promoting your brand, such as writing clear affiliate link disclosures. If they don’t abide by these rules, you can terminate your agreement with them.

Some brands also state that the affiliates they work with mustn’t work with any other competing brands, so you could consider adding that into your terms and conditions. However, this does rule out some affiliates that could be effective for you, such as comparison sites.

Ultimately, every brand is different and there’s no one right way of doing things. Just be aware that if you end up with hundreds of affiliates, it can be hard to keep an eye on what they’re all posting. So, if you do have strict criteria for the kind of affiliate you want to work with, it could be safer to vet them upon entry rather than terminate your partnership if (or when!) they break the rules of your affiliate program. You probably won’t have to worry about that quite yet though!

Step 4: Find affiliates

Even if you decide to run your affiliate program through an affiliate network, there’s no reason why you shouldn’t go on the hunt for some super relevant affiliates yourself. Although affiliate networks do help you with affiliate discovery to some extent, they only expose you to affiliates that have signed up with them. And, as we’ve already touched upon, these affiliates won’t always be the most relevant or effective for your brand.

Have a think about the kind of affiliates that would suit your products, brand and objectives. For example, if you’re looking for affiliates to support your longer-term growth goals, bloggers who drive traffic to their sites using SEO could be your perfect partners. This is because SEO (search engine optimisation) is geared towards helping content to pick up more traffic over time. Instagram promotions, on the other hand, would quickly disappear into an archive of content.

Alternatively, if you’re looking for a short, sharp boost to sales during a difficult month, an Instagram influencer whose followers match your audience could be exactly what you need. Their promotions will be viewed immediately after they’re posted, whereas a blogger using SEO could take longer to get traction and conversions.

You’ll also have to consider things like an affiliate’s reach, relevancy, reputation and more. Check out our blog on creating strategic partnerships that work for your brand for a step-by-step guide.

Once you know what kind of affiliates you’re looking for, there are tons of ways to reach out to them, from attending networking events to scouring the web. Our piece on how to find affiliate marketers has the full lowdown.

However, if you want to save a whole lot of time and headache in your search, make sure you sign up with Breezy. We’ll ask you for some basic info, such as your keywords and competitors, before generating hundreds of relevant affiliate suggestions that could be the perfect fit for your brand.

Find affiliates for your affiliate program

Step 5: Help your affiliates to promote you effectively

Rather than just recruiting affiliates to your program and then leaving them to it, it’s in both of your best interests to work together and ensure that the affiliate’s promotions are as effective as possible.

Yes, the affiliate is likely an expert in their field and knows how to provide content that’s interesting to their followers. But you know your product and how to sell it better than anyone. So, by working together, you can make sure your affiliates have the skills and materials they need to effectively promote your product and maximise conversions.

Just a few ways in which you could support your affiliates include:

  • Product demos: By helping your affiliates to become familiar with your product and how it works, they’ll be able to promote it much more genuinely and effectively.
  • Free products: Similarly, by allowing your affiliates to actually use your products, you’ll be able to work with real advocates (assuming they enjoy them!) as opposed to people who are posting generic ads.
  • Creative assets: Consider giving your affiliates access to images, videos and other creative assets that they can use to create powerful promotions to market your product.
  • Affiliate manager or support team: A good affiliate or partnerships manager will be able to give your affiliates bespoke support and advice on how to get better results.

If you’re a small brand without the resources to hire a partnership manager or grow a partnerships team, that doesn’t mean you can’t support your affiliates and help them to achieve better results. Make it a priority to consider how you can best onboard your affiliates, get them familiar with your product and give them the help and support that they need when they need it.

A lot of this can be automated but make sure that you don’t lose that human touch altogether. Even if it’s just providing an email address and making it your mission to respond quickly, having that support from a human being really does make all the difference!

Step 6: Evaluate and repeat!

We know that we’ve encouraged you to make a lot of decisions in the previous steps. But none of this has to be set in stone!

As your affiliate program grows and evolves, you’ll want to be continuously analysing its performance and evaluating how you could do better. You can do all the research and prep that you want, but there will always be some things that can be improved upon once your program is up and running. It will just take you working with some affiliates to help you identify what those things are.

For instance, if you approach a lot of affiliates and not many are willing to join your program, you might realise that you need to make your program more appealing. We’d recommend asking for feedback where you can, to help you identify how you could encourage more affiliates to join. It might be something as simple as the fact that your competitor is offering better commission rates or perks, in which case, you’ll need to make it your mission to do better.

Alternatively, if you have lots of affiliates but their promotions don’t seem to be converting, there could be a number of issues. Could it be a problem with the relevancy or quality of the affiliates you’ve partnered with? Or could it be that your affiliates aren’t confident with how best to sell your product?

Ultimately, by taking the time to learn from things that aren’t working, you’ll be able to create an affiliate program that’s as powerful and effective as possible.

Ready to create an affiliate program for your business?

At the end of the day, creating an affiliate marketing program for your business isn’t rocket science. In fact, it can be achieved relatively quickly and cheaply. You just need to make sure that you’re in it for the long run. After all, there’s no point in creating an affiliate program if you’re not going to continue optimising and improving it to make it as profitable as it can be.

One way in which you can save time without compromising on quality, however, is by signing up with Breezy. The average affiliate manager spends 35% of their time sourcing new partners. However, by using Breezy for your affiliate discovery, you’ll be able to access hundreds of relevant affiliate recommendations a whole lot more quickly and easily. You’re welcome!

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