A successful eCommerce strategy uses several marketing channels to reach and convert new customers. It’s no longer enough to rely on advertising to drive your sales. Today’s eCommerce marketer needs to be able to increase and track conversions while ensuring a high ROI. That’s why a key marketing channel to consider is affiliate marketing. Starting an affiliate program helps businesses generate online sales in a way that’s easy to track and scale. They’re a must-have sales-generation channel! This affiliate marketing guide will tell you everything you need to know to get started. We’ll look at what affiliate marketing is, how it can serve your brand, and most importantly, how to set up an affiliate program for your business.
- 1 What is affiliate marketing?
- 2 Is affiliate marketing a good fit for your business?
- 3 What are the key steps to setting up an affiliate program?
What is affiliate marketing?
Affiliate marketing involves working with external partners known as ‘affiliate partners’ or ‘affiliate marketers’ who promote your business’ products to their audience using a tracked purchase link. Affiliate partners are then paid a commission by the brand for each sale they generate. Companies will often sign up to affiliate networks that have a ready-made pool of suitable partners to promote their brand, they can also set up their own affiliate program, or use a mix of both.
Affiliate marketing is a performance-based marketing model that helps brands to generate and track sales by nurturing strong partnerships with a wide network of affiliate partners. In this way, it promises a high return on investment, as brands only pay according to the number of conversions.
Is affiliate marketing a good fit for your business?
If you’ve never done affiliate marketing before, you might wonder if it’s a worthwhile marketing channel for your business. While it can take some time to get your affiliate program set up at first, the rewards will be worth it. Affiliate marketing is especially beneficial for eCommerce brands, as affiliates will create content that drives their audience to visit your website and make a purchase using a tracked URL. For other online businesses, affiliates can boost conversions such as app downloads or subscriptions instead of sales.
When deciding if affiliate marketing is a good choice for your business, these questions can help:
- What are my key business goals (awareness, engagement, or conversions)? Affiliate marketing is a proven strategy for increasing conversions! It’s responsible for 16% of eCommerce sales in the US & Canada.
- Am I getting a good return on investment from my current marketing spending? Affiliate marketing minimizes the risk of brands losing money as they only have to pay when a sale is generated. It’s a good strategy for marketers who need to generate a high ROI.
- What are the different niches within my audience? Working with affiliate networks can help you to directly target different demographics of people within your target customer base.
- Are my competitors running affiliate campaigns? You can use your competitors’ campaigns as a benchmark to help you decide how much commission to pay in order to incentivize your own affiliate partners.
- How much commission can I afford to pay? How will affiliate marketing affect CAC (customer acquisition costs)? Looking at your budget is an important step in deciding how much to pay affiliates. Remember, you want to offer payment that is incentivizing while keeping your CAC as low as possible so it doesn’t negatively impact your ROI.
What are the key steps to setting up an affiliate program?
As with any new marketing strategy, you need to be clear on your expectations and objectives for the campaign. Affiliate marketing is designed to help you increase traffic to your eCommerce store and generate more sales, which should inform how you set your goals. You should be specific about your goals, 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. Then, have a list of your KPIs ready to go, so you’ll be able to measure the success of your campaign.
Set parameters for your affiliate program
Every affiliate program is different so decide up-front how you’ll run each of your campaigns, this can change over time. Consider these questions so you can write an outline of your 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?
If you’re just getting started, you might like to test the method with a small group of affiliates before you decide to scale your affiliate marketing campaigns.
Recruit affiliate partners for your program
This might seem like the most daunting part of setting up an affiliate program, but there is no need to panic. In general, there are two options: paying to access an affiliate network or creating your own. Using an affiliate network might seem appealing as you’ll have direct access to a database of pre-vetted affiliates who you can reach out to and activate for your brand. But, if you’re just starting out, paying significant commission to the affiliate network for each sale might be a deal-breaker.
In this case, recruiting affiliates independently will likely be cheaper and help you retain control over who is promoting your business and how. If you’re going it alone, using a tool such as Upfluence search will help you to cherry-pick the best affiliates for your brand thanks to sophisticated search filters. Alternatively, Upfluence can search your customer database and CRM to identify influential customers who could be activated for your affiliate program. Your customers are already fans of your brand who can promote your products authentically and convert new audiences. Converting your customers into affiliates helps you to start small while maximizing the potential of your campaign by leveraging your customers’ organic brand affinity to drive sales.
Launch your affiliate campaign!
Once you have a network of affiliate partners, it’s time to prepare the logistics and processes to launch your campaign! If you need an easy way to send products out to your affiliates for the purpose of content creation, you can find tips in this blog on product shipping.
Your next step is to plan how you will generate and distribute the tracked purchase links so that online audiences can make a purchase from your store directly from an affiliate partner’s content. Depending on how many affiliates you’re working with, you might like to use Upfluence’s platform to automatically create and distribute these links at scale. As your affiliate marketing activities grow, using a tool for time-intensive everyday processes such as outreach, product shipping, and link distribution will be important for operational efficiency.
Track and attribute sales
Once your affiliate campaign is up and running you’ll need to keep track of sales in real-time so you can measure the success of your campaign and pay your affiliates. As a performance-based model, it’s a crucial step that helps you to make adjustments to your current campaigns and plan for future campaigns. Track your campaigns according to the KPIs set out in step 1 so you can see how well your affiliate program is performing. Using individually tracked links for each influencer means you can measure individual affiliate performance and attribute the number of sales generated.
Now you’ve seen a breakdown of the steps needed to get started with your first affiliate campaign, it’s time to put them into practice! Don’t forget to revisit the questions outlined in this article, and check out the blog articles linked throughout for more practical tips.