How To Build A Successful Affiliate Program
The affiliate program is quite simple to understand. It is an online marketing technique where an OEM (Original Equipment Manufacturer) enlists secondary and tertiary vendors to sell and resell a product. Even vendors can set up affiliate programs.
When a vendor sets up an affiliate program, they work with online merchants such as social media influences, marketplaces, and more to conduct their sales.
Here, the vendor pays the online merchant money, and in exchange, the online merchant redirects traffic to the vendor’s platform. In such setups, online merchants earn through commissions of sales they could generate. Affiliate programs are a very cost-effective marketing strategy with low customer acquisition costs.
6 easy steps to build a successful affiliate program
Building an affiliate marketing program is not difficult if you know its different aspects. In this section of the article, we’ll look at how to build a successful affiliate program in 6 easy steps.
Step: 1 Promote products with high Average Order Value (AOV)
Average Order Value, as the name suggests, is the average value of every order that is placed on a website or marketplace.
Affiliate programs pay their online vendors a certain percentage of each order as a commission. Hence, it is advisable for online merchants to promote more items of higher value than those of lower value so that they can maximize their earnings.
To illustrate this with a simple example, let’s assume that each vendor earns 10% of an order. Now, if a customer buys products worth $50, he will earn only $5, as opposed to $50 if the customer buys products worth $500.
There are many ways to promote products and increase the average order value. Online merchants can:
- Offer free shipping services for orders above a certain value;
- Provide group buying discounts to get customers to purchase more products;
- Upsell or cross-sell complimentary products;
- Offer promotional discounts on new products or to first-time buyers.
Step: 2 Price your product appropriately
Products that fit the market well (in terms of the price, purpose, and accessibility of the product) sell well. However, a product that does not address the requirements of the product would not sell at all. For this reason, it is essential to understand whether a product fits the market. Some of the questions that will help a product owner understand market fit include the following:
- What can my customer afford to pay for the product?
- Why would a customer choose to use only my product?
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Step: 3 Use an app to manage your affiliate program
Choosing the correct platform to host your affiliate program can help you reduce management and maintenance costs and resources.
Today, many SaaS (Software as a Service) models can manage all affiliate program tasks like keeping track of commissions, paying vendors, and tracking customers. This will make your affiliate program much easier to manage.
Step: 4 Make a detailed program guide
A detailed program guide serves as a contract that outlines the terms of service and payment. It helps both the vendor and the affiliate program participants outline their respective roles and responsibilities clearly. It also helps you build your program credibility so that more people are willing to work with you without hesitation.
Step: 5 Prepare communication collaterals
Many online merchants promote a single product to customers in any affiliate program. To help them keep their messaging consistent, it is best that product owners themselves develop brand guidelines and communication collaterals.
Online merchants can definitely customize these to some degree, but having a baseline template will ensure that communication is consistent. Furthermore, it prevents customers from getting confused if they encounter two separate online merchants promoting the same product in two different ways.
Step: 6 Choose the right affiliate for your product
The last step in establishing a successful affiliate program is ensuring you partner with the right people to market your product. Online merchants such as social media influencers, marketplace vendors, and more should have a large and active online community comprising people from your target audience.
Their vision should align with yours. Lastly, they should be easy to work with to avoid any professional friction during the collaboration period.
A Few Concluding Thoughts
To sum up, building an affiliate marketing program is easy if one follows the six easy steps outlined above. Affiliate programs can directly increase the potential to generate revenues, not only for the vendors but the online retailers also.
Affiliate programs can also help companies build a brand and establish their identity. It helps businesses reach customers directly.
To conclude, the efforts one needs to put to establish a successful affiliate program pay off in large ways for business. We hope this article helps everyone looking to build a successful affiliate program get started.