Building an eCommerce Affiliate Marketing Strategy

Affiliate marketing is a smart strategy for driving sales through creators. Creating an affiliate marketing strategy will help your eCommerce brand to reach new customers within your target audience and maximize conversions. Leveraging the right affiliates for your brand, across the right channels will help you to boost sales with a sustainable, ROI-positive program. In the US, affiliate programs are credited with driving up to 30% of sales. What’s more, when brands work with influencers within their affiliate programs, they can leverage their creators’ social reach and relevant audience demographics to scale growth even faster. 

Whether you’re at the beginning of your affiliate marketing journey, or you’re looking for ways to scale your program, this guide is perfect for you! You’ll understand the benefits of affiliate marketing, how to start an affiliate program, how to leverage influencer affiliates, and optimize your affiliate management to drive the most sales from your campaigns.

Here’s what you’ll learn:

  • What is affiliate marketing?
  • What are the benefits of affiliate marketing?
  • Why work with influencer affiliates? 
  • How to start an affiliate program
  • Tips for influencer recruitment and onboarding
  • Choosing affiliate channels
  • Tracking sales & ROI
CHAPTER ONE
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What is affiliate marketing?

Affiliate marketing is when a brand partners with affiliate marketers who will promote their products and generate sales on their behalf in exchange for a commission. An affiliate marketer’s compensation is usually a percentage of the profits or a fixed fee per sale.

Affiliate marketing works by leveraging affiliate partners to share product recommendations and, crucially, links to buy the products with the audience of their blog, newsletter, or social media channel. Affiliate partners are compensated according to the number of sales they are able to generate for brands, making it a very cost-effective sales strategy.

affiliate marketing

Affiliate marketing: quick definitions

  • The Seller: The company seeking to promote their products or services.
  • The Affiliate/Publisher: The individual who promotes the seller’s goods/ services to their audience in exchange for a commission.
  • The Consumer: Customers who purchase a product/service using an affiliate link or promo code.
  • Conversion: The ‘trigger’ action that results in value for the Seller and commission for the Affiliate: sale, download, subscription etc.
  • Attribution: Knowing which marketing touchpoint resulted in a conversion.
  • Compensation: A flat fee or % amount paid to Affiliates for each conversion they generate.
Recommended reading

Affiliate or Influencer Marketing: What’s Best for Your Brand

How does an affiliate program work?

An affiliate program is when a brand hires several affiliate partners to promote their products over a set period of time. An active affiliate program follows these key steps:

  1. An affiliate partner publishes a tracked purchase link for a particular brand’s product on their blog, newsletter, or social media. 
  2. A customer clicks on the link. 
  3. The customer is directed to the brand’s e-commerce store. 
  4. The customer makes the purchase via the website. 
  5. The tracked link records the purchase and attributes it to the affiliate marketer who published the link. 
  6. The affiliate marketer receives the commission for the sale they generated. 
  7. Repeat!
CHAPTER TWO
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What are the benefits of affiliate marketing?

affiliate sales
  • Affiliate marketing turns awareness into sales!

Affiliate marketing helps eCommerce brands to build upon the online brand awareness created through their marketing efforts (social media, content marketing, influencer marketing etc) with the aim of converting a brand’s online fans into new customers. Affiliate partners that publish blogs, newsletters, and social posts that promote your product will help to push potential customers further along the journey to purchase. 

Whatever the format of an affiliate’s content, they will always include an affiliate link which makes it easy for their audience to proceed straight to purchase directly from their post. Affiliate programs are designed to drive sales through highly converting content, which helps turn online awareness into sales. 

  • Affiliates drive traffic to your website.

Affiliate links will lead users to your eCommerce website. While you should definitely aim for a high conversion rate, not every click on an affiliate link leads to a conversion. However, increased web traffic does offer a key touchpoint in the journey of a new customer who may convert further down the line. Now that a potential customer has visited your website, your product is more likely to be top of mind when they are ready to make a purchase.

  • Effectively track and attribute sales.

Every eCommerce marketer is looking for the best way to measure their marketing programs to be able to allocate budget and scale the most effective strategies. Affiliate marketing is a model that allows marketers to track the conversions generated by each affiliate partner. By using tracked affiliate links they’ll have a real-time view of the number of clicks and the quantity and value of sales generated by each of their affiliates. Being able to track sales in this way makes it easier to calculate the ROI of their affiliate program and prioritize future spending. Attributing sales to individual affiliates means brands can offer additional perks to their top performers and build a long-term strategy. 

  • High return on investment

Affiliate marketing is a strategy that promises a high return on investment. Launching an affiliate program has relatively low setup costs which minimize your up-front investment. Using a performance-based compensation model means that affiliate partners are paid according to how much value they bring to your business. In this way, affiliate marketing means that brands’ spending during the program is based on how many sales are generated for their business. This helps to minimize the risk of overspending on a strategy that doesn’t deliver results. With affiliate marketing, brands’ spending is closely tied to the real monetary value generated by their affiliates, making it an ROI-positive strategy.

cost-per-action model

The Cost-Per-Action Model

Affiliate Marketing uses the Cost-Per-Action (CPA) model, meaning brands pay for each action (conversion). The commission for each conversion can be a fixed price or a % of sales.

Examples of cost-per-action used in Affiliate Marketing:
• % of revenue generated from sales.
• Cost per order
• Cost per lead
• Cost per subscription
• Cost per download

Recommended reading

Top 5 benefits of Instagram affiliate marketing for brands

CHAPTER THREE
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Why work with influencer affiliates?

Have you considered combining your influencer marketing strategy with affiliate marketing? Working with influencer affiliates will help you sell more and scale your affiliate program. Influencer affiliates are social media influencers who are activated as affiliate partners. Influencers are known for their large social reach and engaged audiences, making them the perfect partners to drive sales for your brand. 

Differences between influencers and affiliates

  • Affiliate marketing has the sole focus of generating conversions whereas influencer marketing has a much wider scope (brand awareness, engagement, events etc).
  • Affiliate compensation is based on a revenue-sharing model. Influencer compensation models vary and can include free products, a flat fee or a performance-based fee.

Similarities between influencers and affiliates

  • Both have an online audience that offer valuable reach to their brand partners.
  • Both create content that aligns with the values and niche of their brand partners.

Benefits of working with influencers as affiliates

  • Drive more sales.

Working with influencers who have a large social media following increases the potential of driving sales for your brand. Affiliate marketing is a great way to activate influencers because it leverages authentic influencer content to drive engagement and conversions through affiliate links.

  • Achieve even higher ROI.

For brands it’s a worthwhile investment that effectively generates sales and compensates affiliates according to their performance, helping them achieve a high return on investment. 

  • Encourage high performance with incentives.

For influencers, earning an affiliate marketing commission is a great incentive as they can potentially earn more money over time as opposed to one-off campaign payments or product sampling.

  • Sustainable growth.

Affiliate marketing with influencers is a great way to nurture long-term influencer partnerships because it’s mutually beneficial for both brands and influencers.

Recommended reading

Affiliate Influencer Marketing: How to Make it Work for Your Brand

CHAPTER FOUR
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How to set up an affiliate marketing program

Now let’s focus on the practical knowledge you need to set up a successful affiliate marketing program.

Let’s explore what steps go into planning, managing, and tracking the success of your affiliate marketing program.

Key questions to help you plan your affiliate program:

  • How many affiliates do you want to work with?
  • How long will your affiliate program run? 
  • Which products will you offer for affiliate promotion?
  • Will you ship product samples to your affiliate partners? 
  • How much commission will you pay your affiliates? 
  • What are the terms and conditions?
Recommended reading

Your Affiliate Marketing Guide!

The main process for running an affiliate program:

  • Set goals and parameters for your campaign.

You should be specific about your goals for your affiliate marketing program. For example, maybe you want to increase web traffic by 20%, boost total conversions by 5% or see a 40% up-tick in sales of a particular product category during a set period of time. 

  • Identify affiliate partners for your campaign. 

There are several options for recruiting affiliate marketers including paying to access an affiliate network, using an affiliate agency, searching an affiliate database, or using your own application form. 

  • Reach out to your shortlist of affiliate partners.

Invite your selected affiliates to join your campaign. Be sure to include details about the goals of the campaign, deliverables, and how the affiliates will be compensated. 

  • Formalize your partnership and agree compensation.

Create an affiliate marketing agreement that sets out the terms of your partnership, expectations, and compensation. Signing an agreement ensures both affiliates and the brand are committed to upholding their end of the bargain.

  • Onboard your affiliates so they are ready to start promoting your brand. 

Make sure your affiliates have everything they need to begin promoting your products. This includes sending them a creative brief, marketing materials, affiliate links, and product samples so they can start creating content.

  • Track sales and pay your affiliates.

Track the sales generated from your program in real-time so you can calculate the commission for your individual affiliates and pay them in a timely fashion. 

  • Optimize your processes and scale your program. 

Monitor your affiliate program so you can make improvements. Incentivize influencers with cash bonuses and continue recruitment to scale your campaign. Check out this essential affiliate marketing checklist to get ideas on how to optimize each stage of your program!

Recommended reading

Top Tips For Setting Up An Influencer Affiliate Program

CHAPTER FIVE
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Affiliate marketing strategy: recruitment and onboarding

Deciding how to recruit your partners is an important element of your affiliate marketing strategy. How you recruit your affiliates will depend on your budget, the size of your program, and what you’re looking for in your chosen affiliates. 

Here are the pros and cons of the most common affiliate recruitment strategies.

recruit affiliates

Affiliate network

Pros:

  • Access a large volume of vetted affiliate partners. 
  • The affiliate program is largely managed by a third party, freeing up time for your team to focus on other priorities. 

Cons:

  • Significant up-front cost to join a network. To scale, you’ll need to join several different networks. 
  • Running your campaign through a network means you have less control over your campaign as the network is an intermediary between you and your affiliates.



Affiliate marketing software

Pros:

  • Using affiliate marketing software such as Upfluence gives you access to a creator database. You can therefore easily search for highly relevant affiliate partners and cherry-pick who you want to work with. 
  • With Upfluence, you can also identify potential affiliates by analyzing the social reach and purchase data of your customer base. You can uncover influential individuals in your brand’s network who can be activated as affiliates for your brand.

Cons:

Affiliate marketing landing page

Pros:

  • Easy to set-up in-house. 
  • Can build your program over time with rolling applications. 

Cons:

  • Needs a large-scale distribution strategy to attract new affiliates to apply and stand out from the crowd.

Recruiting customers as affiliates

Pros:

  • Cost-effective activation. Your organic advocates are 7x more likely to accept a free collaboration and will be 52% cheaper for ads.
  • Increased authenticity; Your customers are genuine fans of your brand and can speak authentically and convincingly about your products. 

Cons:

  • If you’re a new brand with a small customer base you’ll have a smaller pool from which to pinpoint influential customers. 
Recommended reading

Affiliate Marketing Strategies To Grow Your Network & Boost Your Sales

Onboarding affiliates

This process is key to making sure that your affiliates are ready to start promoting your products. You should spend time making sure that your affiliates understand your brand values and key messages. Sharing a creative brief will help to clarify expectations and offer content production guidelines. Don’t forget the practical details such as generating and sharing affiliate links, and sending out product samples and marketing materials to your affiliate network.

Recommended reading

Beginner Affiliate Marketing: How-to Guide for Brands

CHAPTER SIX
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Affiliate marketing channels

affiliate marketing channels

The best way to get the most from your affiliate marketing strategy is to test different channels until you find the ones that work best for you. Affiliate marketing is most often associated with blogs. Many affiliate marketers created long-form content such as product reviews, product rankings and listicles that featured affiliate links as a way to monetize their blogs. Affiliate marketing has now expanded to include many different channels including:

Increasingly, affiliate marketing is moving away from blogs and newsletters and more towards social media channels. Social media networks such as Instagram, YouTube and Tiktok have a huge captive audience who are already engaging with their favorite creators and making purchases based on their content. Social media represents a huge untapped channel for brands. Thanks to the rise of social commerce (i.e shopping on social media) it makes sense for brands to start integrating affiliate marketing into their creator programs to help boost sales.

Recommended reading

How To Use Social Media For Affiliate Marketing

The variety of content formats available on these channels opens up more options to engage new online audiences and drive conversions. Affiliate marketers can utilize their content as photos, videos and text to reach and convert a maximum number of people. You should choose your affiliate marketing channels according to your target audience. You need to be reaching them where they spend their time online. 

Recommended reading

Influencer Affiliate Marketing: Channels, Strategies, and Tips

CHAPTER SEVEN
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Tracking affiliate sales and ROI

Once your affiliate campaign is up and running you’ll need to keep track of sales in real-time so you can measure your return on investment and pay your affiliates. You should track your campaigns according to the KPIs you set out at the beginning of your program. The most KPIs to track include: total number of sales, total value of sales, average order value, conversion rate and total commissions generated. 

Using individually tracked links for each influencer means you can measure individual affiliate performance and attribute the number of sales generated. This is crucial to being able to transparently calculate an affiliate’s commission. You may also decide to create a tiered commission structure, to offer even higher incentives to those who generate a large volume of sales. Analyzing individual affiliate performance will also help you decide who to work with for the long-term and who you want to reward with cash bonuses and other perks for a job well done. 

Capitalize on success to boost your affiliate marketing strategy

  • Work with the best

Monitor your best-performing influencers; stop working with non-performers; and double down on top performers! It’s affiliate Darwinism: reputable and ethical affiliate marketers will survive while unscrupulous ones won’t.

  • Repurpose content

Use your top-performing content, make sure you ask for white-labeling rights, and test media amplification. Repurposing influencer-generated content to be used for evergreen content including paid advertising for brand awareness campaigns, social proof, testimonials, lead generation, and syndicated content will extend the utility of IGC and make your influencer/affiliate campaign – turned – content marketing campaign deliver for months to come.

Recommended reading

Affiliate Marketing Tips to Grow Your Business

Conclusion

We have explored how to create an affiliate marketing strategy to drive growth for your brand. This guide has put forward key methods to scale your affiliate program through hiring influencer affiliates and turning your customers into affiliate partners for your business. There are also a ton of practical tips for setting up an affiliate program if you’re new to affiliate marketing or need ideas for how to optimize your process. From affiliate recruitment to onboarding, sales tracking and payouts, we’ve covered the top tips and best practices to make sure you’re at the top of your game.

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