Affiliate marketing programs date back to 1986 when the idea of ‘internet marketing’ was conceived, and patented by William J. Tobin, the founder of PC Flowers & Gifts.
This proves that affiliate marketing has been around for a long time, even before it was made famous by Amazon in 1996 with the launch of their “Associates Program.”
At the time, Amazon only offered books, movies, and music to their customers. Affiliates could join their program and earn anywhere from 5% to 15% commission on generated sales.
During and after the pandemic, which skyrocketed the demand and supply for remote business activities, including affiliate marketing, more businesses have found it necessary to launch and promote affiliate marketing programs for their businesses.
In this article, you’ll discover how you can change your affiliate marketing game through cutting-edge affiliate marketing programs offered by Metricks. However, before we begin with the details, I’d like to walk you through some beginner topics.
Table of Contents
- What Is Affiliate Marketing?
- Growing your Affiliate Marketing Programs
- Affiliate Networks Vs. Affiliate Tracking Software
- Launching Your Program with Metricks
- How Can Metricks Help You
What Is Affiliate Marketing?
Affiliate marketing is a marketing effort that incentivizes third-party marketers (affiliates) to spread the word about a product or service. These affiliates could be other companies or individuals who do not necessarily have first-hand experience with your product.
In return for their marketing, these affiliates earn a commission for every successful referral.
Affiliate marketing has become one of the cheapest and most efficient forms of marketing since affiliates get paid only when they cause a sale to happen.
The main goal of all affiliate programs is to drive profitable customers. One great thing about affiliate marketing, as mentioned above, is that if you can put together a strong program, you should see a high ROI in very little time.
Growing your Affiliate Marketing Programs
Once you decide to market your products through affiliate marketing, you need to start looking for ways to attract affiliates. You can search for people who already sell similar products in your space and invite them to become affiliates for your products/services.
Here are a few tips for getting started:
1. Meet Affiliates Directly
Whatever marketing strategy you opt for, you will need to factor in the time it takes to stay updated. Things change constantly, and what works now will not always be future-proof.
That is why you need to meet affiliates directly and see what is happening in the industry.
There are a lot of events and conferences you can attend, virtually and in person. Just ensure that affiliate reach is a priority and come prepared with marketing materials to sell your products/services to potential affiliates.
2. Affiliate Networks
Affiliate networks are platforms that act as the middlemen between the affiliates and advertisers. They allow you to connect with potential affiliate partners who go to these sites to search for products to promote.
They also offer opportunities to expand your knowledge through their sections dedicated to affiliate marketing program newbies. You will find a wealth of invaluable information on conducting market research, finding your niche, attracting high-performance affiliates, etc.
3. Offer Competitive Incentives
Affiliate marketing programs revolve around rewards and incentives, so before you start, you need to have a clear idea of the commission you will be rewarding your affiliates.
The average commission rate ranges from 5-30%/conversion, but you may want to take your time to think this through. You don’t want to discourage affiliates with too little commission or set it too high that it adversely affects your profit margin.
You can find the most appropriate commission level by looking at competitors in your industry and setting realistic rates for mutual profit.
Once you’ve decided on an appropriate commission percentage, you also need to work out your commission type. This means deciding how you want to pay your affiliates. This could be:
- One-off: This simply means that your affiliates would be paid per sale. For example, if an affiliate sells a $100 product with a 10% commission, you’ll pay them a one-time sum of $10 when the sale is closed. This payment system is best for eCommerce businesses.
- Recurring: Here, your affiliates would be paid monthly. This option best suits subscription-based (SaaS) businesses. For example, suppose an affiliate sells a subscription to a customer for $100 per month and they receive a 10% commission. In that case, you’ll pay them $10 per month for either a specified period or until the customer they’ve referred stops renewing their subscription.
4. Hire an Affiliate Manager
When you get your affiliate program running, hundreds of affiliates seeking to sign up, and everything seems cumbersome. It’s time to hire an affiliate manager.
If you try to run an affiliate program on your own, you’ll quickly fall into the trap of accepting every affiliate that applies to promote your products, and that’s not always a good idea.
You need to be strict with the affiliates you accept because you don’t want your products on sites that can affect your reputation or SEO strategy. An affiliate manager handles all of these for you.
And they’ll not only vet your affiliates before accepting them as partners but manage payments and attend events relevant to the growth of your brand while you focus on the other needs of your business.
Having a single person to “own” your strategy makes it easier for you to build relationships with your partners. They’ll know who to email when they have a question and get valuable feedback that could help your program become more successful.
5. Remember that Your Affiliates Are People
The saying “a company is only as extraordinary as its people” applies to your affiliates. It’s essential to make sure that you’re not treating your affiliates as objects.
They are people, your partners, and working side by side with you to reach the same goal. So the better you treat them, the further you will go with that relationship. Plus, it’s worthwhile to remember that your affiliates can decide at any time to work with your competitors because they’re not bound to you.
They don’t need to rely on you as their primary source of income; they can build all the assets and move somewhere else.
However, if you treat them well — with above-average commissions, timely payouts, listening to their concerns and feedback — they’re more likely to stick around and promote your products for a very long time.
Affiliate Networks Vs. Affiliate Tracking Software
After figuring out how to attract and reward your affiliates, the next thing you should start thinking about is how to manage your affiliate programs.
There are several ways to manage your affiliate program. The first and most basic one is to do everything independently, without any external tools, maybe just a notepad and your spreadsheet where you list your affiliates by their names and manually track every sale or click based on their affiliate links.
This is almost impossible because even if you track all your clicks and sales, attribution, a significant part of affiliate marketing programs, will be impossible with this method.
Then, when it’s payday, you manually calculate the commission and transfer money to your affiliates one after the order. This sounds very tiring and inefficient, doesn’t it? This method may work if you have two or three affiliates who don’t generate many conversions.
Anything more than that, though, and you should need some real help, and this is where affiliate networks and tracking tools like Metricks come in.
1. Affiliate Networks
These are huge networks that handle the application process for you and allow people already subscribed to their network to become your affiliate. Affiliate networks serve as middlemen between advertisers and their affiliates.
One disadvantage of working with a network is that they charge a commission, which is normally up to 30%. For example, this is how it works: Brand C affiliate programs might sell $1 million of clothing.
They pay their affiliates a 10% commission, so the total commission of the program would be $100,000. The affiliate network would then charge a 30% override on this figure so the brand would pay $130,000. The affiliates would get the $100,000 commission and the affiliate network would get a $30,000 override.
Depending on the network, you may also need to pay setup costs. This covers the cost of integrating you to the network and testing tracking etc.
Start-up fees can range from nothing to over $5,000. I have been asked for $30,000 before and, obviously, I never started with that network. This cost is often negotiable when you discuss contracts with the network, but it is worth noting when considering the start-up costs.
2. Affiliate Tracking Software
These are software designed to manage all operations related to affiliate marketing. It enables merchants to track sales-related data.
There are generally two ends to this kind of software. The first one is for merchants, who can manage their programs, set up commissions, add products or new programs, assign conversions to particular affiliates, share promotional materials with affiliates, calculate commissions, issue payments, etc. The second is for affiliates who join the program.
They can find their unique trackable links, explore the program features, find marketing assets to use for promotional activities, get insights into how to maximize the efficiency of their promotional efforts, provide mass payment, and so on.
If enabled by the advertiser, affiliates can also track their progress and compare their results to other affiliates in the same program.
What makes affiliate software different from affiliate networks is that the software gives merchants more independence.
They can customize each program according to their affiliate marketing strategy, apply various commission payment methods, issue affiliate codes, and referral links, and, most importantly, choose from all potential affiliates rather than being limited by those associated with a particular affiliate network.
Some of the benefits of using affiliate tracking software like Metricks to run an in-house affiliate program are:
While networks might charge a 30% override, you might pay only 5% when using a tracking solution. So for every $100 spent on commission, you would only pay $5 rather than $30.
A better understanding of the company products and customer needs. You benefit from account managers’ knowledge of your products or services. This can often be lacking with the network.
ii. Speed to market
It can mean a quicker turnaround on time-sensitive offers. The in-house manager would be able to contact key affiliates instantly and arrange promotions.
iii. Complete control
With the program managed in-house, you have complete control over your affiliate program your affiliates, and everything in between
iv. Payment and commissions
Affiliate networks normally have a finance team that arranges invoicing and payment. When running in-house, you will be ultimately responsible for affiliates being paid.
When using a network or an agency, you have to rely on them to create weekly report templates and measure performance. If you want to get insight into a number of variables, waiting for the network to provide them can often be quite time-consuming.
vi. Policing the program
When you manage the program in-house, you are responsible for ensuring that affiliates are promoting your brand ethically.
If you are starting an affiliate program for the first time you can really benefit from working with networks that will instantly give you access to thousands of affiliates, a task that would be very time-consuming if done in-house.
Launching Your Program with Metricks
By using third-party software like Metricks to manage payouts and communication between you and your affiliates, you can make everyone’s life easier and automate every process in your affiliate marketing program.
Sure, a spreadsheet can work for small-scale affiliate programs. But people make mistakes — and you don’t want your priced affiliates to rant on social media that their commission hasn’t been paid accurately for the sales they’ve made.
Metricks solve your problems. We are automated, so payouts are made accurately and on time, every time — even if your affiliate manager is off sick or on vacation.
As soon as you approve an affiliate to join your program on Metricks, they are issued a special link. This link is unique to them and helps track customers as they click and purchase products, and then pay the affiliates based on the data collected from the link.
Here is an example of my Binance affiliate link. Metricks will provide you with a platform to generate something similar for your affiliates when they sign up to promote your affiliate program. Notice that there is a question mark at the end of the link and then an affiliate ID.
That ID tells Binance and helps them track anyone who creates an account via my link, and they pay me a percentage commission when the person trades on the platform.
Also Read: Metricks Affiliate Marketing Glossary
The best thing about affiliate marketing programs is that everyone wins.
The company wins because they are able to get new customers. Only affiliates that produce results make any money. So the company gets new customers at virtually no extra cost to them.
The affiliate wins because they are able to utilize their audience and expertise to potentially make more money than they could if they just worked a regular 9-5 marketing job.
They are paid on results, so the affiliate is incentivized to work hard and rewarded when they succeed. They also have a lot of freedom that being an affiliate marketer gives, not to mention they don’t have to deal with all the headaches that owning a product can bring.
And finally, the customer wins because they are introduced to a product that can benefit them more.
How Can Metricks Help You
2. Free Trial
Henry is a marketing and communications specialist. He enjoys helping individuals and brands find answers to their marketing questions. He has spent the majority of his career in the SaaS industry, gaining experiences in areas such as corporate communications, digital marketing, branding, and community building.
Henry currently serves as the head of product marketing and comms at Metricks.