Affiliate marketing is booming with the industry expected to reach an estimated worth of $12 billion in 2022! These affiliate marketing stats show the industry has tripled in size since 2015. Now more than ever, companies are researching how to create an affiliate program and maximize the value of partnerships.
However, where most companies fall short is the execution phase of creating an affiliate program. Some make the mistake of thinking that anyone can just put a tracking solution in place and partners will magically show up to promote the product.
Well when that fails, many companies give up with a blank statement like “affiliate doesn't work for our product.” That is absolutely correct with that attitude and a program set up by a non-expert.
That's where I come into play. I've had hundreds of companies come to me looking to turn things around. Now I'm sharing the tools and tips I've learned over the last 12 years to help companies skip the mistakes and get right to a prosperous affiliate program.
*FTC Disclosure: This article may contain affiliate links. The recommendations below are based on my first-hand experiences and I earn a small commission at no cost to you. You can read my full affiliate disclosure in my privacy policy.
Table of Contents
Why should your business learn how to create an affiliate program?
If you're not using an affiliate program to promote your business, you're missing out! The benefits of partnership marketing are endless. Having an army of brand evangelists is extremely powerful in spreading the word about your products. Here are a few of the biggest benefits:
- Small upfront investment. Affiliate programs can be set up quickly and easily with affiliate management software that is right for your brand.
- Pay per performance. You only pay when transactions occur. No more spending advertising money to see what works.
- Low ongoing costs. Monthly fees for your affiliate network vary based on volume and solutions. You also pay commissions on sales generated by affiliates.
- Solid return on investment (ROI). Many affiliate programs have great cost-per-acquisition (CPA) rates in comparison to other digital marketing channels like social media and Google ads.
- Highly targeted traffic. Affiliate partners will only promote products they're interested in. And since they make a living on their content, they drive targeted leads who are already interested in what you're selling.
- Low risk, small investment. Many companies never take the time to learn how to create an affiliate program the right way, and those are the programs that fail. And that's OK since the investment was likely minimal. If it doesn't work for your company the first time, you have other options.
Is Affiliate Marketing Right for Your Business?
Affiliate marketing won’t be the right fit for every business. If your business has low margins you may not be able to create a compelling offer for your affiliates while still turning a profit.
In order to attract affiliates, you will need to pay a portion of every sale. Some of the best affiliate programs will even offer recurring revenue from monthly subscriptions.
One of the best ways of determining whether an affiliate program is a right fit is to do a competitive analysis and ask these questions:
- Are your competitors offering programs for affiliates? If not, did they try and fail?
- What platform are they using for tracking?
- What are they paying their partners?
- What do they offer as incentives?
A great affiliate program example is Jasper, who has a product made for bloggers and also can be utilized as a great tool to help affiliate managers create content on behalf of their affiliates. Check out the full Jasper review to learn more.
How to Create an Affiliate Program: Step-by-Step.
Here’s how to create an affiliate program that will grow your sales and score you more happy customers. Follow our 7 steps for affiliate program success.
1. Do your research.
“If we knew what we were doing, it would not be called research, would it?” – Albert Einstein
Although Einstein was around before the days of affiliate marketing, the importance of research has not diminished in the last 70+ years.
As you begin to design your affiliate program you will need to understand what your competitors are doing. If your offer cannot stand out from the crowd it will become one of many programs and will not attract affiliates.
For your research, you can sign up for competitor programs to understand their commission structure, locking period, platform, and much more. Try to find successful programs and understand what they are doing better than everyone else.
As you go through your research you want to begin determining how to create your own affiliate program. Key items to consider include:
- Commission structure.
- What platform you will be using.
- How you will recruit and manage affiliates.
These three key pillars will provide the base for you on how to create an affiliate program. Make sure you are utilizing the right affiliate management tools to build your strategy. You can build on top of them with additional features as your program grows.
Speaking of program growth… you want to create actionable goals and benchmarks for the first year of your affiliate program.
One of the biggest mistakes I see executives make is setting unrealistic expectations before they learn how to create an affiliate program and all the nuances of growing a program.
Affiliate marketing is not like Facebook Ads…you can't just turn it on and expect results. It takes time and effort from an affiliate manager to recruit partners. There are 15 steps to success for affiliate managers to go from “hi” to becoming sales active. A 30-60-90 day plan is not enough foresight, so create a 30-180-365 day plan instead.
If you want to learn more about how to do smart research and build a great affiliate program I go into more detail in my affiliate manager training course. More about the course later. On to the next step…
2. Decide on a structure.
“The structure is there, and will automatically provide the pattern for the action that follows.” – Donald Curtis
In order to guide your affiliate's behavior, you will need to create a program structure that leads to your desired action.
Key decisions include:
- What is the base $ payout?
- Will you create bonus offers?
- What is the lockout period for payments?
- Will you have a private or public program?
- Program or affiliate network?
Each of these decisions will drive different behavior. A higher payout amount may attract more affiliates and a longer lockout period or bonus offers can keep them working with you over a longer period of time. For example, the Shopify affiliate program is going to offer a much different solution for payouts than their competitors like BigCommerce. They are all trying to be each other out in different ways.
It’s easy to get caught up in all of the decisions that need to be made on how to create an affiliate program. But remember…
At the end of the day, your program needs to be profitable.
To inform the decisions you should determine the cost per click, cost per lead, and cost per sale for your product and see what you are able to offer to generate more sales while still being profitable.
3. Create the infrastructure.
“To me, ideas are worth nothing unless executed. They are a multiplier. Execution is worth millions.” – Steve Jobs
The iPod wasn’t the first product of its kind on the market. MP3 players had already been around for 4 years before the iPod launched in 2001.
But no one company was as successful as Apple.
What did it come down to? Execution.
In the same way that Apple wasn’t the first to market, chances are you will have competition that has already learned how to create an affiliate program. But, just as the iPod outmaneuvered MP3 players you can outmaneuver other affiliate programs.
Create a strong infrastructure and you will be able to make a seamless program that makes it easy for affiliates to succeed.
A checklist of key pieces of infrastructure includes:
- Automated email onboarding
- An easy-to-use signup page
- Branded content, banners, and affiliate links
- Partner assets
- Sample templates for use
If you would like more guidance on how to set up your affiliate program for success then the Affiliate Management Mastermind takes you through how to create an affiliate program from A – Z.
Once you’ve got the details ironed out it’s time to…
4. Announce and promote the program.
This is where you can get creative. In order to scale your program, you will need to recruit affiliates. In order to recruit affiliates, you will need to announce and promote your program.
65% of affiliate marketers make their money from blogging. Is there any way you can launch the program through their blogs or newsletters?
Can your company promote it through its social media channels? Or directly via your website like Fiverr does with its program?
Can you get in touch with affiliate marketers with larger audiences to promote your launch? Or maybe get a case study up on a platform like impact.com?
We recommend that you start with your existing customers via platforms that you control (social media, website, email list). Let your customers know that you are launching an affiliate program and what benefits they can get from selling your product.
You might be thinking “that’s great, but how do I get people to sign up?”.
5. Recruit affiliates.
Recruiting affiliates is a long process, broken down to four fundamental steps:
- Collect websites and contact info. Find email addresses of partners that sign up for your program. If you’re unsure how to get started or manage this information you can learn more about the best affiliate manager tools here.
- Determine your competitor’s traffic sources. Use tools like Ahrefs or SEMRush to see where their traffic comes from (social, direct, paid ads) and what key terms they rank for on Google.
- Start emailing. Get in touch with potential partners and pitch them the program. To find emails easier you can try Contactout.com or hunter.io, both great free Chrome extensions. Your best chance is to act like a PR firm with your pitch about the product first.
- Schedule partner calls. and prepare for calls with prospective partners. Once you have them on a call it's up to you to sell them on the program.
As you recruit your first affiliates you will have to start to think about how to…
Dustin's Choice
If you're looking for the best affiliate recruitment solution on the market, look no further than Grovia. Not only does Grovia know how to create an affiliate program that grows, but they also have a top-of-market software solution that is second to none when it comes to finding niche relevant content partners and their contact info. And if you're on a budget, they have a wide range of solutions for any company, from DIY software to a full-service recruitment outreach solution. So if you're looking for recruitment help, give my buddy Rob at Grovia a call. You won't be disappointed!
| Platform | Cloud-based |
|---|---|
| Price | $297 DIY software per monthFull-service starts at $4997 |
| Promotion | Start Your Free Trial |
6. Manage your affiliates.
How to create an affiliate program is only the beginning of the journey (a very important one). As your affiliate program grows, the way you manage your affiliates should change.
Consider how you want to treat your top performers and what new incentives you might be able to offer. Maybe top earners can become part of a VIP Club where they get access to exclusive promotions to share with their audience.
With the growth of your program, you may want to also consider how to approve and deny applications. Will your program remain public or will there be a vetting process that requires a minimum amount of traffic?
One big key that companies often miss is how to create your own affiliate link for free when an affiliate joins. It should not be the affiliate's responsibility to learn how to create an affiliate link! Programs are free to join, but a good affiliate manager will know the importance of getting the unique tracking link to affiliates immediately after they join. This is the time they are most excited about the program.
To keep your affiliates and potential partners up to date about all of these changes we recommend that you stay in touch via email, providing regular updates.
Don’t forget to celebrate the success and victories along the way. Tout your big wins to the boss, don't be shy. Done right, building an affiliate program can be exhilarating!
Not everyone can be as excited about their job as the Target lady, but successful campaigns are known to make you celebrate a little. I know for a fact that if she knew how to create an affiliate program properly, she would love her job as an affiliate manager.
7. Measure success and adjust as needed.
Finally! Your program is live, you’ve got affiliates signed up, and sales are starting to roll in.
What’s next?
To ensure that your program continues to grow you will want to measure program success and make tweaks as necessary.
That means creating daily, weekly, and monthly reporting for you to track trends over time. You can leverage reporting capabilities in partner networks or create your own to ensure accurate reporting.
As more data becomes available you can use A/B testing to try new approaches with your affiliates and see what yields the best results.
Get creative with your activation campaigns. Find out what motivates your affiliates to do more.
FAQ
How much does it cost to set up an affiliate program?
It costs between $500 and $2,000 to set up an affiliate program on a network. Affiliate managers can expect an additional $500 in expenses to cover additional services like website hosting, keyword research, and contracting to set up an affiliate program.
How do affiliates get paid?
Affiliates marketers earn a commission for marketing another business’ products or services. They are paid for each sale they make either through an affiliate network or directly through the affiliate program that they join. When companies learn how to create an affiliate program, one big mistake they often make is NOT giving the affiliates their unique link immediately after they join. Don't be this affiliate manager!
How do I start affiliate marketing as a beginner?
Affiliate marketing is all about driving traffic to products or services via your unique affiliate links. In order to begin affiliate marketing as a beginner we recommend that you choose one channel and focus on growing your traffic there.
Can I do my own affiliate program?
Yes, hopefully, this how to create an affiliate program guide was helpful in showing the steps your company can take to create the program. However, growing an affiliate program is a full-time job, so I would not advise trying to manage partners and try to run a company at the same time. The most successful programs will invest time, budget, and dedicated effort into finding partners.
How do I create an affiliate link for free?
No tracking platform is free in affiliate marketing. Your first investment will be the affiliate network, which will give every affiliate that joins the program a free affiliate link.
How do I start affiliate marketing as a beginner?
This is simple: get a mentor that has gone through the struggle and teaching the right methods to be a winner. Here are my suggestions for the best affiliate marketing courses.
What affiliate tracking solution should I use for a WordPress and WooCommerce site?
Some brands are interested in how to create an affiliate program in WordPress. My suggestion is to use a trusted 3rd party affiliate network or platforms like impact or Shareasale. However, there are a few good WordPress plugins that companies can use if they are on a budget.
Is there anything else I need to know about how to create an affiliate program?
Yes, there are hundreds of intricate details on best practices of how to create an affiliate program and especially how to manage the program after launch. My affiliate manager mastery course teaches everything you need to know to grow the program.
Wrap it up Dustin.
Now that we’ve gone through how to build an affiliate program it’s time to get started! Let me know in the comments what your next steps look like and I’ll let you know if you’re on the right track.
If you have an affiliate program and are looking to take it to the next level you will want to check out the Affiliate Marketing Mastermind.
Hello Dustin,
Very good content, is affiliate marketing suitable for drop shipping business ? I’d love to use affiliates to boost sales but I am selling low ticket physical products below $50, so I’m worried about the commission is too low to recruit affiliates. Thank you
Drop shipping and affiliate do not mix; it is one or the other. Commission being low is not a problem as long as you convert well and it is a product that partners are excited to promote.
Hi, why would the business model matter? Dropshipping or not, can a person not happily promote an affiliate link? Thanks.
Mark
Certain sites will not have affiliate as their focus and might do direct links.