Despite the obvious advantages, 78 percent of CMOs admit affiliate programs to be their least mastered area of digital marketing. Why do so many executives fail to utilize a tool with high ROI and limited risk?
Affiliate marketing might still be a relatively new technique, but that doesn't excuse leaders who neglect to take advantage of its benefits. Executives who hesitate to push their affiliate strategies forward put their organizations at a disadvantage. By separating the rumors from reality, CMOs and other marketing leaders can turn affiliate marketing into an ROI powerhouse.
Why Leaders Fear Affiliate Partnerships
With the industry likely to reach $6.8 billion in the next few years, plenty of companies -- especially young ones -- clearly love working with affiliates. Others, however, point to the potential downsides as reasons to stay away. While no marketing technique is perfect, the risks of affiliate programs are lower, less impactful, and more easily managed than the risks of other tactics.
Affiliate marketers face the same scrutiny as other third-party partners. Companies are suspicious of their loyalties to the brand, concerned about paying commissions, and worried about cannibalized profits when "normal" customers start moving through affiliate channels. These concerns are understandable, but they are not significant enough to prevent companies from reaping substantial benefits.
It's true that affiliate marketers don't care as much about the integrity of the brand or consistent messaging as the company does -- that's the point. Affiliates are third-party advocates who exist to secure sales through non-branded channels. They diversify options, bring customers from new channels, and extend product reach beyond the possibilities of traditional marketing. As long as the company provides the branding materials affiliates need, the brand will not be diluted by increased exposure.
Even commissions aren't as evil as they seem. Every sales or marketing channel requires an investment to succeed. Affiliate marketers take more heat than internal departments because they are third parties who benefit directly from first-party sales. Leaders should choose and cultivate affiliate partnerships carefully, but they should not distrust the practice to the point of limiting investments out of fear.
Executives who are afraid of losing internal sales to affiliate channels miss the bigger picture. Good affiliate partners increase aggregate sales, taking only their cut without disrupting normal sales channels. Legitimate affiliates do not engage in "black hat" tactics to trick customers to go through their links. Some scammers do attempt to defraud their clients, but their dishonesty is no different from that of any other vendor.
By selecting affiliate partners with the same careful scrutiny they apply to other areas, CMOs and other executives can ensure their affiliate partnerships help both sides.
How to Create Mutually Beneficial Affiliate Partnerships
Simply knowing what not to do isn't enough. By following these proactive strategies, companies can get more from their affiliate partners and boost their bottom lines:
1. Simplify the process for affiliates.
The easier the company makes the relationship, the happier affiliates will be. Put together a program that appeals to affiliates using simple, straightforward exchanges. Companies like JVZoo -- a SaaS company where vendors (product creators/owners) and their affiliates can smoothly interact -- use multiple secure payment processors, enable instant payouts, and integrate with multiple services in one platform.
These platforms not only add transparency to reduce the likelihood of scammers exploiting the process, but they also facilitate interactions between companies and affiliates. The less work affiliates must do to understand the parameters of the agreement, the more work they can do to sell and promote products.
2. Standardize communication.
When a promotion link stops working, whom does the affiliate contact? Through what channel?
Use a popular messaging platform like Slack to provide instant access to team members in a pinch. If affiliates know where to go, they can get answers quickly and keep sales flowing. Ensure communication choices are the same for all affiliates to make it easier on the internal team.
3. Deliver better marketing collateral.
Affiliates build their own collateral, but no one outside the company understands the brand values and value proposition like the people inside. Regularly develop and distribute quality collateral to keep affiliates flush with usable content. Collect internal material and deliver content to affiliates on a regular schedule, such as through a newsletter or monthly sales update. MailChimp is a popular tool that can help you wrangle a large email list of affiliates and get the most relevant info to them when they need it.
4. Allow affiliates to offer promotions and deals.
Customers love special deals, and affiliates want to offer them. Provide affiliates with unique coupon codes to strengthen the relationship and make them feel valued.
Offer promotions to the affiliates themselves, too. Evan Weber of Experience Advertising holds contests for his affiliates, entering every affiliate with a sale one month into a drawing pool for prizes. This incentivizes all affiliates, not just the big players, to promote the products.
5. Let them be creative.
Affiliates do more than toss up a list of links and hope for the best. They experiment and adjust, always striving to outdo their competitors. Don't let them redesign the company logo or create a new tagline without prior approval, but do give them a long leash to experiment with new audiences, techniques, and messaging.
CMOs who don't give affiliate marketing the credit it deserves are holding their companies back. Affiliate programs are the present and future of online selling. By following these strategies, leaders can create sustainable, mutually beneficial partnerships that attract better affiliates and boost revenue.