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Affiliate marketing is the ultimate business flywheel.
It turns your happy customers into salespeople who promote your products and services to their friends, family, and online audience.
Happy customers → Refer new customers → Become happy customers → Refer new customers
And the flywheel keeps spinning.
The question is, are you ready for an affiliate marketing program? You don’t want to start a program too soon, overwhelming your team or seeing it flop before it can get traction.
To figure out if affiliate marketing is for you, answer these 5 questions before you start putting your program together.
Before you can start your affiliate marketing program, you need a product. You can sell an ecommerce product, SaaS, or a service. All qualify for affiliate marketing, but only once they’ve gone live. Without a product, you don’t have anything for your affiliates to sell.
Make sure your product is in the wild before you launch your affiliate program.
As tempting as it is to build out the affiliate flywheel as quickly as possible, you need happy customers before you can get it spinning. That means your product needs to be live AND in the hands of your customers. As soon as they get your ecommerce product or see the results of your SaaS or service, you can ask them to become affiliates (and sweeten the pot with an incentive).
New businesses always want one thing. More customers. But, that’s not always the best thing for your business. If your supply chain can’t handle more shipments or your SaaS tool is bursting at the seams—an affiliate marketing program shouldn’t be your focus. Building a foundation to grow in should be.
Have the systems and processes in place to onboard new customers.
Once you’ve built out the systems and processes that can seamlessly onboard new customers, then you can start to work on your affiliate marketing program. You don’t want your affiliates hearing from their referrals that they were ghosted by your company when they asked to sign up or found a 12-week waitlist to buy your product. Your affiliate program only works if your affiliates are proud to recommend your company, so make sure you can handle more customers before you take your program live.
When you’re confident that your business can handle more customers, it’s time to figure out what your affiliate program looks like. What can you offer your customers in return for their referral? This could be free merchandise, exclusive access to events, discounts, gifts, special experiences, or cash.
The incentive of your affiliate program is a product within itself.
When you choose the incentive for your program, you’re essentially creating a new product offering. Your customers can refer people to your company—in return for something that excites them. This means your incentive can’t be something your audience will easily overlook. It has to be worth their time and credibility, so they feel like they’re winning by sending new customers your way.
Once you’ve figured out your incentive, it’s time to look at the numbers. Can you afford to give that incentive to customers at scale? Your affiliate program shouldn’t require much upfront investment or a single dollar landing in the red. It should bring in new customers at a cost-per-acquisition that’s lower than your other marketing channels.
Check that you can afford your incentive at scale.
An ecommerce store needs to look at its margins to know how much it can afford to discount customers that refer their friends, family, and online audience. A marketing agency has to crunch the same numbers. They have to see if the cash payouts they give their partners make sense in relation to the contracts signed. Run your incentives through your financials to make sure you can afford them as your affiliate program grows.
If you want your affiliate program to be a big part of your marketing strategy, someone on your team needs to run it. Like any other part of your strategy, you need a leader to watch the data and optimize based on what they’re seeing. If your affiliate program sits on the back burner, you can’t expect it to bring front burner results.
Choose a team member to be the affiliate program lead.
At DigitalMarketer, we’ve learned that adding a lead to every new project is essential for success. Someone has to be in charge or else communication gets messy and suddenly your affiliate program has been sitting on the sidelines for months, untouched. Assign a team member to be in charge of the program and market it to your audience, optimizing your incentives and copy for the maximum number of affiliate partners.
An affiliate marketing program is for every business…but it’s not for every stage of business. Certain requirements need to be in place before you set your affiliate program live (and spend your time and money on it).
Go through these 5 questions to make sure you’re ready for an affiliate program:
#1: Is your product live yet?
#2: Can you handle more customers?
#3: What do your customers want in return for referrals?
#4: What can you afford to give per referred customer?
#5: Can someone on your team market your program?
If you can answer yes to each question, you’re ready for your affiliate program to go live.
That means your flywheel of happy customers → referrals → happy customers is about to catch its first glimpse of momentum. And it’s your job to keep that momentum going.