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How to Create an Affiliate Program: A Step-by-Step Guide

Tips & Guides — 22 Apr 2022

How to Build a Successful Affiliate Program in 8 Steps

How to Create an Affiliate Program: A Step-by-Step Guide

Affiliate marketing, also known as performance or partner marketing, has become a popular way to drive lucrative revenue streams for many online businesses. Statista estimates that performance marketing spending will reach $8.2 billion by 2022, a considerable increase from $5.4 billion in 2017. But what is an affiliate program, how does it work, and how can you implement one to your business’s advantage?

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What is an affiliate program?

An affiliate program is an arrangement whereby an online merchant pays an affiliate – another business, influencer, blogger, or website owner – a commission to send them traffic. The affiliate achieves this through web or social media content or product integration. If an affiliate brings in traffic or cash to the merchant, the merchant pays the affiliate a commission. 

Commissions are generally based on the number of people the affiliate sends to the partner site or those who then buy something or perform a specified action. Actions could include signing up for a free trial or downloading an app.  Some affiliate programs pay according to the number of people visiting the page that contains the merchant site’s banner ads.

Recruiting affiliates can be an excellent cost-effective, win-win marketing strategy – and a way to boost product sales. In this guide, we’ll cover the ins and outs of implementing an affiliate program and give you the steps to follow to get you going. Using these, along with some help from Affise’s parternship marketing software, is bound to set you up for success. 

In this article we will cover the following sections to help you decide whether an affiliate program is right for your online business.

Should you get started with an affiliate program?

Whether you sell physical items or digital subscription services (SaaS), performance marketing can work well to promote your company and increase traffic to your site. To assess whether performance marketing would work for you, answering the following questions could help:

What is your business type?

Affiliate programs work especially successfully for ecommerce and online subscription businesses. Below is an example of what many consider one of the world’s best affiliate programs: Amazon Associates.

Types of businesses that work best with affiliate programs:

  • Ecommerce
  • Beauty and health
  • Fashion
  • Subscription services
  • Technology

Companies with subscribers can gain back the money they spend on commissions whenever a customer renews. It’s down to you to decide whether to reward affiliates every time a customer they bring in renews. 

Small and niche businesses should consider partner marketing carefully, as they may struggle to find successful affiliates in their specialized area.

What is your business bandwidth?

Performance marketing will improve your revenue, but not without significant demands on your business. You must be equipped to:

  • Meet increased demand for your products/ services. You must have the resources to boost your business output and hire more employees.
  • Offer customer support to new leads, nudge them down the sales funnel, and provide high-quality customer service.
  • Part with cash commissions (or an alternative form of payment, e.g., store credits) when affiliates help you make a sale. Given this, affiliate programs work best for companies that have high customer retention rates.
  • Shell out a significant amount on customer acquisition costs (CACs).
  • Offer relatively high commission rates to attract high-quality partners to join your program.
  • Support new affiliates. You must lead them through the partner marketing terms and conditions, tackle issues with commissions, and assist them with performance marketing software.

There are many more questions to be asked to find out if your business will benefit from starting an affiliate marketing program. To examine this subject further and make a well-informed decision, check yourself with our guide “Is Affiliate Marketing Right for Your Business?

8 Steps to create your affiliate program

Once you’ve confirmed you want to start an affiliate program, follow this step-by-step tutorial:

1. Set your goals

Decide which audience you want to reach. What type of customer do you want to attract as a result of your affiliate program? What sort of potential affiliates, e.g., bloggers, will enable you to achieve your goals?

Set actionable goals in terms of:

  • The amount of revenue you aim for affiliates to bring in either monthly, quarterly, or annually. 
  • The average order value (AOV) each affiliate drives. Also, set goals for the number of unique sales driven by affiliates over a given period. 
  • Clicks, impressions, and leads are other measurable targets to follow – as are, of course, affiliate sales

Amassing several different metrics will help you to measure your success. A robust analytics solution can help you track and measure metrics easily. 

2. Select a solution to run an affiliate program

You can either start your affiliate program in-house, join an affiliate network, or use a SaaS solution designed specifically to help affiliate programs succeed. 

In-house could work if you have lots of time on your hands, but this isn’t the case for most business owners. Affiliate networks offer a complete marketing system to help you get up and running in no time. While you will have to pay a fee, the time, money, and effort you’ll save will be worth it long term. 

You can read more about getting started in our guide to managing an affiliate program via the SaaS route. 

3. Decide which products you will include in the program

Performance marketing is one of the largest sources of ecommerce orders, outselling social commerce and display advertising. However, you must keep up with trends when deciding what to sell—whether you’re already established—or a newcomer to ecommerce.

Not all of your products will necessarily suit inclusion in an affiliate program. You may need an in-house salesperson, fully in touch with the benefits and features of the product, to effectively promote it. Affiliates, too, may not have the right audiences for certain products. Keep those things in mind when selecting which products you’ll ask affiliates to promote.  

Top products for affiliate programs care often in the fashion, health and beauty, sport, and outdoors spheres. Eddie Bauer, for example, is cited as one of the top affiliates in fashion for 2021.

4. Decide on affiliate commissions

Be realistic when setting commissions. Calculate how much it costs you to acquire new customers and make a profit. Add in operating costs, e.g., shipping and fulfillment for items. 

Commission payouts are usually lower for physical products due to the high transaction fees. Digital products and services have no fulfillment costs, so the commission percentage will be higher. 

On average, expect to pay 1% to 30% in commission to affiliates if this is based on pay per lead, click, or sale. 

Read also: How to Calculate Affiliate Marketing Commissions?

5. Establish your affiliate program policy and structure

To achieve success with your affiliate program, you need to create a program guide and include performance requirements. Pin down your expectations in terms of a base level of commissionable transactions per quarter per affiliate. 

You should also be aware of which marketing channels and tools new affiliates plan to use to achieve these goals – such as: 

  • Their own email list to carry out email marketing;
  • Social media posts on, e.g., Facebook, Instagram, or LinkedIn;
  • Webinars.

Decide how you’ll allow affiliate marketers to promote and distribute their links and how long affiliate cookies will remain active, i.e., how long will affiliates be able to earn commissions after someone clicks on their link? 

Make use of performance marketing templates to ensure you’ve covered all the terms and conditions. 

If you decide to draft your affiliate program policy and rules yourself, we recommend addressing the following subjects:

  • When you make payouts to affiliates and how;
  • Which promotional methods or marketing channels are allowed and which are restricted;
  • Which keywords are allowed;
  • What physical products or affiliate product categories (discounted, low priced, etc.) excluded from your program;
  • Other cases when affiliate action will be banned.

6. Select an affiliate platform

As your affiliate network grows, an affiliate platform can help you expand your program with ease. When you’re selecting an affiliate platform, you’ll need one that enables communication between partners as well as streamlines payments processes. You should also look for a platform that helps you manage:

  • Offers;
  • Campaign analytics with advanced tracking and reporting features;
  • Optimized ad campaigns;
  • Partner commissions.

Your solution should also have an intuitive interface, the right tools and plugins, robust fraud detection and good support. 

Affise Reach offers you a SaaS platform that streamlines the entire process of running an affiliate program. Here’s how it works:

7. Prepare your affiliate marketing collaterals

All affiliates will appreciate having the right tools to promote your products/ services. From email templates to banners, you should have a variety of readymade online marketing collateral to ensure consistent brand messaging across all your channels and platforms.

Always make sure to keep your marketing materials up to date so affiliates have the best relevant materials to hand at all times.

8. Find the best affiliates

While some more extensive affiliate networks have the advantage of drawing on a vast number of affiliates, it’s also possible to acquire some on your own, even if you’re a small business. When you’re on the lookout for affiliates, check that these have the following characteristics:

  • Their own platform, full of quality content. That way, you’ll know they’re committed to their own success. 
  • They’re choosy when it comes to the products/ services they promote, so your program has credibility in their customers’ eyes. 
  • They have an understanding of marketing – a knowledge of SEO (search engine optimization is always useful;this will help affiliates market your products/ services more effectively
  • They have robust sales funnels of their own. Many affiliates already work with several brands or networks which means they can provide you with the right skills and experience to help you get great results
  • They share your niche or sell complementary products to yours. When they’re promoting your products with referrals, it’s probably something their audience wants or needs. 

Once you know what to look for in potential affiliates, it’s time to take action. Learn more about the ways to find reliable and effective publishers in our comprehensive guide.

Best practices for affiliate programs

Once you’re ready to build a successful affiliate marketing program, you’ll want to look into best practices to generate the most profit. Here are some optimization tips:

Train and support your affiliate team

Once you’ve recruited your affiliates, you’ll need to get to grips with affiliate management. Brief affiliates on all your program’s terms and conditions and ask them to sign an agreement to show they’re happy to abide by your rules.

Train affiliates on your brand fundamentals and on how the program works. You’ll also need to supply them with their affiliate links along with your promotional resources. Your affiliate manager should keep checking in with them regularly to ensure they’re up to speed with everything.

A great solution to ensure 24/7 access to fresh offers, collateral, and educational materials is launching a partner portal. Read our instructive article to learn the ropes of building a great portal for your affiliates.

Track and evaluate your performance

Tracking and measuring your success is vital, and you can do this either via your affiliate program software or through the affiliate network you’ve signed up to. 

Affiliate tracking lets you see who is bringing in the most sales and assess how well your program is doing against the measurable goals you set out earlier. You’ll also want to understand revenues, conversion rates, and unique sales – as well as AOV. If your campaign isn’t meeting your goals, you may need to rethink commission structures and pricing or working with different affiliates. 

An affiliate platform with robust tracking and attribution features, such as Affise Reach, will help you learn everything about your traffic and performance. Use this data to improve your affiliate marketing campaign results.

Check your competitors’ affiliate programs

By running competitor analysis, you can determine how well your referral program is performing. Consider: 

  • How your competitors structure their affiliate commissions and what actions trigger the commission payouts – e.g., a lead, sale, or anything else. 
  • How are their affiliates paid, whether it’s a commission per sale or a set amount for an action, and are they paid via credit card or credits?
  • How they find affiliates, and what the terms and conditions of their programs look like.

Run a swot analysis to ascertain each program’s strengths and weaknesses – and to help you see missed opportunities as well as the threats each competitor may pose to your own program.

Competitive analysis helps you to optimize your own affiliate program and make the right choices when it comes to offering a higher commission/lower structure and how you will pay affiliates.

Ready to create your affiliate program?

Affise can help you jumpstart your affiliate program with its customizable platform, packed with full set of program management features and additional services:

  • 1
    Affise Reach

Affise Reach allows you to connect with top industry networks, agencies and publishers and find and recruit valuable partners who will help drive quality traffic your way.

 

  • 2
    Partner and offer management

Partner program managers can create, alter and delete offers and view the number of partners connected to offers. Offer management in Affise also implies automation – for instance, you can set the schedule when offers are active. Partner management options allow managers to ban bots, filter affiliates and collaborate only with the quality ones.

 

  • 3
    Tracking and attribution

Built-in analytics features provide access to data on partner performance. Affise’s CR automation, Click automation and KPI automation enable you to set and follow the right metrics and KPIs – and take away the pain of manual data processing. All three automation tools allow you to understand strengths and weaknesses and optimize every stage of your marketing funnel.

 

  • 4
    Customizable dashboard and analytics

Affise allows you to configure your dashboard the way you want, identify growth opportunities and forecast risks. You can shape reports into line charts, pie charts and more and provide teams with self-service access to insights. You can create your own layers of statistics and see e.g. monthly performance figures and use Drilldown Reports where you can view several pieces of data on the same page. Affiliates can see their statistics in their profile section including traffic, conversions and finances.

Affise analytics tools allow you to test out an unlimited number of campaigns. With 50+ data breakdowns, you’ll be able to get a granular view of how your affiliate marketing campaigns are performing.

 

  • 5
    Fraud Prevention

A staggering amount of money is lost by brands through online fraud. Affise provides several ways to keep your ad campaigns protected – with built-in fraud prevention and third-party tools. Here are some ways Affise works to keep you safe:

  • Eliminate fraud at the start by switching new affiliates into pre-moderation mode. This will allow you gain complete visibility over potential publishers;
  • Ban suspicious IP addresses in Affise to prevent publishers from untargeted areas from joining your program;
  • Employ click-level fraud prevention with Affise’s built in click-level prevention tool This keeps you from click spamming and click injections, ban VPN and proxy traffic;
  • Control incoming traffic from specific IP addresses;
  • Set minimal time to conversions to identify users who convert too quickly;
  • Use analytics to spot fraudulent activities.

 

  • 6
    Easy integrations with third-party services

Affise offers multiple integrations with various software – including marketing solution AppsFlyer and WordPress, via a feature-rich API that allows you to conduct custom integrations. 

Using Affise’s API you can access third-party apps and seamlessly integrate data and eliminate manal entry while keeping data safe and available to permitted users only.

Conclusion

Partnership marketing programs can be far more successful marketing tools than just Facebook ads to drive traffic and boost online sales. If you’ve determined that affiliate marketing is the right way forward for your business, it’s time to make it happen. 

Check out the competitive landscape, design your program and commission rates – and last but not least – identify the right affiliate networks and affiliate software providers to help you reach your goals. 

For a risk-free way to try out Affise’s affiliate marketing software, request a free trial and find out how easy it is to scale and automate your partner relationships across all your marketing channels.

Start building a successful affiliate program with Affise Reach. Tell us about your marketing goals, and we'll help you achieve them.

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Affise Academy

Affise is a partner marketing platform for brands, advertisers and agencies to scale via all possible performance marketing channels. Synergy of technology and our long standing experience lets you expand your partnerships, automate every step of the campaign lifecycle and make data-driven decisions.

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