Before jumping straight into talking about how to effectively set up and run your affiliate program, I think it is important to explain very simply what affiliate marketing is and how it works.
A simple explanation – Affiliate marketing is a quick and effective way for your brand to use the power of other websites (affiliates) to get products and services in front of a large audience of potential customers in return the brand pays a commission to the website for either traffic or sales generated.
So How Does It Work and Track?
It’s simple! Once you are signed up with an affiliate network or a tracking platform your program is then given a unique tracking code. You pass this tracking code on to a website (affiliate) who will promote your offers or services using a range of different marketing techniques such as banners, text links, email, voucher codes and more. When a potential customer clicks on the banner the unique tracking link will fire, telling the brand which website / affiliate it came from. If the customer, then goes on to purchase you then pay the website / affiliate a commission. This is either a set monetary amount or a percentage of the sale. (Basket value) You only pay commission to the website/ affiliate if a sale is generated – this model is called CPA – cost per acquisition.
Setting up the affiliate program - Introduction
Setting up and running an affiliate program is not a straight forward simple task. Important decisions need to be taken during the set-up process and clear strategic goals must be put in place at an early stage to make sure the program ultimately drives good quality incremental traffic & sales for the brand.
If you are considering setting up an affiliate program, the first thing you need to consider is the behavior you want to create for the program. What are the programs main aims? New customer acquisition? Increase sales / subscriptions? Brand awareness? Whatever the type of behavior you want to create, make sure you get these important points set out clearly before considering launching a program.
Look at competitors – are your competitors in the affiliate market? What are they doing in the affiliate market? What are they paying affiliates to drive sales? What vouchers are they using? It is good to get a full picture of competitor behavior within the channel and put together a competitor analysis before moving on to the next set up phase of the program.
Once you have a clear idea of the types of behavior you want from the program, and a clear picture of competitor activity, you can then build a quick picture to see if your brand can be competitive within the affiliate channel.
Once you are clear on the direction, behaviors, and your competitiveness, you need to then consider what affiliate network you would like to work with. Each affiliate network has its own strengths and costs attached. What affiliate network best fits your brand?
When the network is selected, what is needed to get your program up and running? What marketing tools do affiliates / publishers need to effectively promote your products or services?
When the program is set up how do you promote the program? How do you recruit affiliates on to the program? How can you get the right publishers to promote you? What type of publishers are out there to help you promote the program? Do they all work differently?
When the program is up and running and driving sales, how do I keep growing the program? Do I still need to keep recruiting? What are the best ways to communicate with my publishers? Is the program driving incremental sales or is it duplicating customers from other online marketing channels? Would you have already won the sale if an incentive by an affiliate was not offered?
All the above mentioned are core parts of an affiliate program, and careful planning for each of these stages need to be put in place before implementing.
These series of articles take an in depth look at all the key areas of setting up and executing the key areas of an affiliate program which includes:
1. Creating the correct behavior
2. Competitor Behavior
3. Affiliate networks and how to choose one.
4. How to use a network effectively
5. Marketing tools for publishers
6. Promoting your newly launched program,
7. Recruiting the correct affiliates
8. Voucher Promotions – How to use effectively
9. Continued Growth
10. Helping create brand awareness
11. Driving incremental sales
12. Other factors of an affiliate program.
As the affiliate marketing channel is so complex with different types of affiliates and marketing techniques, not all the areas can be covered. The topics covered in this guide are the most important to get your program up and running the correct way.
Look out for Part 2 in this series of articles - Creating the correct affiliate program behaviour.