Learn how to start an affiliate program with this step-by-step guide.

This article provides you with all the information you need to get started with affiliate marketing. Here are eight steps to setting up an affiliate program (and affiliate marketing software).

Our guide covers everything you need to know about starting an affiliate program, from deciding on commissions to finding and recruiting affiliates.

It is difficult to begin and keep an effective affiliate program running. To begin with, you must locate and instruct the proper affiliates, decide on the right commission, and devise a method for tracking their performance. You must also ensure that they comply with your programme’s guidelines.

In order to begin an affiliate marketing programme, you must first understand how to set it up correctly. This article will describe how to establish an affiliate marketing programme using eight steps and affiliate marketing software.

What is affiliate marketing all about?

An affiliate marketing program can help you generate traffic to your site by encouraging content creators to link to and promote it. In return, these affiliates are compensated when they help you make a sale.

Affiliate marketing is when you recruit content creators, such as bloggers, social media stars, or niche experts, to promote your brand on their websites or social media accounts. These individuals will include affiliate links—unique, trackable links that direct readers to your website—in their content. When someone purchases something using an affiliate link, you will compensate these affiliates a commission.

Is an affiliate program the right choice for your online business?

Affiliates can help you generate sales whether you sell physical products or digital subscription services. There are several standards your company must meet to participate in affiliate marketing.

Here are a few things to remember:

Affiliate programs are particularly well suited for businesses with higher profit margins. While these programs can be utilized by virtually any sort of business, e-commerce stores and online subscription services (including SaaS businesses) tend to make the most of them.

56 marketers reported that the following kind of businesses benefit most from affiliates:

• Ecommerce (80%)
• Beauty (77%)
• Apparel (68%)
• Tech (68%)
• Health (61%)
• Subscription services (61%)

*It is up to subscription-based companies whether or not to credit affiliates every time a customer they brought in renews their subscription.

When people buy through an affiliate, they are usually purchasing from someone they don’t know personally.

So choosing a referral program over an affiliate program is the better option if you want customers to refer your products to people they know personally.

Your business will benefit more from a referral program if:

• You’d like to mobilize your customers to tell friends, family, and others they know about your business
• You aren’t ready or able to pay cash commissions on every sale
• Your product is meant for a niche audience
• Your business is new or fairly new, so it’s difficult to recruit suitable content creators as affiliate partners

You have to understand affiliates and influencers are distinct. Influencers connect with their networks of followers by addressing them directly. Affiliates are more interested in authentically demonstrating how they utilize products than generating direct sales than influencers. In addition, the payment for an influencer is based on the campaign rather than commission per sale.

There are several advantages to affiliate marketing programs.

Is an affiliate program the right choice for your company? These advantages may help you decide if an affiliate program is the right choice for your company.

• Affiliate programs help you rapidly increase brand awareness among new audiences that creators have already built for you.
• Affiliate programs let you harness the recommendations of trusted creators. Consumers are much more likely  to trust what affiliates have to say, compares to ads and messages that come straight from your brand.
• Affiliate programs help you reliably track the ROI of word-of-mouth. Every sale is traced back to the affiliate responsible.
• Affiliate programs help you increase leads and sales in a targeted manner. Affiliates have access to audiences who match your ideal audience, and they can link to any product page or landing page you choose.
• Affiliate programs are cost-effective and low-risk. You only pay an affiliate after they’ve generated a sale for your business.

Create the best affiliate marketing program by following these steps.

Following this step-by-step guide, you can establish a successful affiliate program now that you know affiliate programs are the right fit for you and the benefits they offer.

1. Setting goals is critical to the success of your program.

Before starting any marketing program, set objectives for your affiliate program.

Before reaching the audience you desire, you must first determine them.

Your program should have a few key performance indicators, or KPIs, to help you know whether your program is successful. A SMART KPI is one that is specific, measurable, achievable, relevant, and time-bound.

Of course sales are the most important measure of affiliate program success, but these other metrics can also provide useful information.

2. Competing companies’ affiliate programs must be analyzed.

You’ve probably done a general analysis to determine your business’s strengths and weaknesses compared to your competitors. Now, you should investigate your competitors’ affiliate programs.

Prior to developing your own affiliate program, you should conduct a thorough analysis on existing programs to get a sense of where you stand, allowing you to position your program competitively. After all, you’re also competing against affiliates.

Here is how to conduct a competitive analysis for an affiliate program:

• Make sure to find at least two companies with affiliate programs, as well as one firm that isn’t directly competitive with you but shares the same clientele (and thus might entice similar affiliates).
• Compare the commission structure of each competitor program.
• Find out how each brand recruits its affiliates.
• What are the conditions and terms for each affiliate program?
• Try to find out as much as you can about the competitor’s programs by doing some digging:
• Run a SWOT analysis.

3. Choose the appropriate affiliate commission

Use your competitive analysis findings to structure your own affiliate program. Your commission structure, or the method you compensate your affiliates, will be one of the most crucial design choices.

Even if you have seen other commission rules in competing programs, you should only compensate an affiliate if a sale is made via their affiliate link. (Don’t pay for impressions or clicks!)

Choose between paying a set amount for each sale or a percentage of each sale affiliates make. You should also decide whether you want to be paid in cash or store credit. Usually, a percentage commission paid in cash is most appealing to affiliates.

Choose the exact commission rate you will offer your affiliates. While it is important to offer competitive affiliate commissions, one-upping your rivals is not always the best approach.

Your company also must be cared for. Consider your customer acquisition costs, your retention rate, and your average customer lifetime value.

Use this data to determine a commission that will entice new affiliates, but also maintain them.

Consider offering commission bonuses to your top affiliates who reach certain revenue targets, or who account for a certain percentage of your affiliates. This will make your affiliate program even more appealing.

4. Other key program aspects should be decided upon.

You must also decide on the following, in addition to your commission:

An important factor to consider when working with affiliates is whether or not to allow them to promote certain products or services of yours. When affiliates promote items that result in higher average purchase values, for example, this results in more revenue for you and, if you have chosen a commission based on a percentage, a higher commission for the affiliate.

5. Find affiliates to start.

Creating your own affiliate network is your next step once you’re ready with your program structure. At this point, you’ll need to decide whether to use an existing network of affiliates or create your own.

It doesn’t matter which method you select to locate affiliates; you must have an affiliate tracking system that allows you to enroll affiliates, create affiliate links, and track their progress. The existing affiliate network or affiliate program software—more on each later—will accomplish this task.

Are you going to rely on an existing affiliate marketing network?

A pre-existing affiliate network can help you build a foundation of representatives rapidly, particularly if they already have connections with leading affiliates in your field. It can also maintain connections with these affiliates for you, since networks generally handle affiliate management.

Affiliate networks also have a huge disadvantage. In addition to the commission you pay affiliates directly, they charge their own commission (or finder’s fee, in a manner of speaking). (Sometimes, this charge is as much as 30% of the commission you charge.)

Furthermore, an affiliate network might require you to pay an additional $30,000 if you paid affiliates $100,000 in a given year.

Even though affiliate networks track your affiliate performance and pay out affiliates automatically, you won’t have direct control over your valuable affiliate data.

Do you plan to establish your own network of affiliates?

You can still track and compensate your affiliates efficiently if you decide to build your own personal network of affiliates (affiliate marketing software is also known as affiliate platform or affiliate management software).

When you consider the price of an affiliate network, the cost of affiliate software is usually much lower. In addition, you have full control over the data you need and all other aspects of running a program. Thus, opting for the right affiliate software rather than an existing affiliate network offers a multitude of benefits.

Consider partnering with reputable websites, bloggers, and social media influencers whose audience you want to reach, who produce high-quality content, and who are relevant to the niche your business serves or to the people it serves.

Once you’ve decided which accounts you’d like to work with (people who already use and love your product or service), make a list of those people. It’s even better if they’re already familiar with your product or service, but it’s not required.

You may also place an open affiliate application on your website, promote the affiliate program, and allow potential affiliates to come to you. Screen them carefully, depending on your needs, and see how well their niche and audience match yours.

Join a LinkedIn group dedicated to affiliate marketing to discover suitable affiliates. Post a message and wait for interested parties to contact you in response.

6. Recruit the best screen potential affiliates.

Choosing the right affiliates and approaching them to see if they would like to join your team is the best approach. You should avoid scammy affiliates at all costs, so be sure to screen potential affiliates carefully – both manually and with business intelligence tools.

You must also decide how many affiliates you wish to enlist. The scale of your reach and the degree of exclusivity for your affiliate program both factor into your decision.

When selecting affiliates, you should follow these steps:

After you’ve decided on the affiliates you want in your programme, send them a personalised message. This message should inform the affiliate how the programme works, explain the benefits to the affiliate (including how commissions are paid), and provide a brief summary of the affiliate’s duties. You want to convince the affiliate to join the programme and begin a healthy and open relationship with them.

After affiliates decide to join your program, inform them about the program’s terms and conditions, and require them to sign an agreement to adhere to these conditions.

In order to create an effective affiliate program, you need to establish a clear and thorough agreement. It should include everything from the program’s terms and conditions to the requirements for affiliate participation to the standards for properly promoting your products.

In order to create an affiliate program agreement, learn all the crucial elements. Use our free template to do so.

7. You should train your affiliate team and keep them informed.

Provide affiliates with promotional resources, such as branded banners, product images, or videos, as well as train them on brand and program fundamentals. Also, provide affiliates with their unique affiliate links and go over best practices for placing and promoting them.

Long-term affiliate relationships need to be nurtured for the best results, so support doesn’t stop at training. Remember that.

Make sure affiliate partners receive the latest updates and promotional announcements in a timely manner. This includes news about sales and offers, new products to advertise, and any alterations to the affiliate programme. A monthly webinar or Zoom meeting is a good choice, as is posting updates in a exclusive Slack, LinkedIn, or Facebook group.

Plan to regularly check in on individual affiliates’ progress, whether through email, direct messaging, your affiliates’ dashboard, or Zoom. Set times to check in, and stick to them.

Make certain affiliates know how to reach you if they have questions about the programme. Choose among email, phone, an online form, direct messaging, or a private forum to communicate with you as needed.

Affiliates can gain firsthand experience with your brand’s offerings by trying out your products or services for free or at a discounted price. By doing so, you can help them promote you accurately in content.

8. Keep track of how your affiliate program is performing

You must regularly monitor your affiliate program’s performance after you’ve begun. Your affiliate program software or affiliate network will inform you of its status.

Also, look at how well your affiliate program is meeting the measurable goals you set during planning, including revenue, conversion rates, unique sales, and AOV. If your program is not meeting these goals, you may want to adjust your commission structure or reconsider your affiliate lineup. Keep track of which affiliates are bringing in the most revenue.

Don’t miss out on our guide to the top 20+ affiliate marketing best practices for even more affiliate marketing tips.

Finally, I’d like to say a few words to wrap things up.

Armed with the knowledge of how to establish an effective affiliate program, you can begin your own. Assess the competitive environment first. Then, create a programme that distinguishes your brand from other affiliates by offering a lucrative commission. Of course, recruit the right affiliates to help your brand reach sales targets, as well as finding them.

The information we provided in the tips can tell you why affiliate marketing software is vital if you want to establish your own affiliate network.

Interested in learning more about affiliate program tips and strategies specific to your industry? Check out the guide that is tailored to your business: