Affiliate Marketing Strategies

By the end of this tutorial, you will learn the three core tenants of marketing that have allowed me to build my eCommerce business, Science of Skill, to a $2M-a-year run rate. I’ll do so by breaking down exactly the way I manage my affiliate traffic.
How do you build a simple system to track who is going to promote for you and when, whom you’re going to promote for and when, and keep it in line to consistently drive lots of traffic from others who have large followings? I’ll answer this question in three parts over the next couple of weeks, starting with Part 1 and the first tenant:

Tenant #1 – Finding Affiliates to Promote Your Product or Service

This strategy will not work if you can’t find affiliates with a big list to promote your product or service, so that’s the first step. Ask yourself – who already owns a list with the types of people to whom I’m aiming to market in the first place? Who owns that audience?
In my arena (Science of Skill), there are folks online who already have an audience interested in self protection, martial arts, and self defense; anyone in that space is a potential affiliate. Forbes wrote a useful article on the myths of affiliate marketing that I recommend reading.

  • Generating a Hit List/Working the Hit List

The “hit list” of potential affiliates that you generate will not necessarily be those who will promote for you anytime soon (i.e. the next few weeks, or even months – though anything is possible!), but it’s a list of anyone who potentially could at some point in the future, from the smallest to the biggest players.
As you do your research and gather names, put these affiliates into an excel document, or whatever you’re preferred contact depository, with a column for their email, url, main web properties, and any other data you deem worth noting.

  • Starting at the Bottom

Usually, you’re not going to go to the 8-figure businesses that are growing consistently month after month, and ask them to promote the “little guy” (potentially you) right away. More often than not, you’re going to start off with affiliates at your level (in terms of monthly revenue, social following, email list size, etc.) or a little bit higher. Aim to strike up the relationships here first.

  • Warm Introductions

The best way to start building those affiliate relationships? Warm introductions. Whenever I get in touch with someone on my hit list and vibe well – maybe we find a way to cross promote, or they agree to test out one of our offers – the last thing I do before I hang up is make an effort to think of people who I want to introduce to that person.
You want to help them network. Ask if they know whoever it is you have in mind, why that person might be a useful business contact for them, and arrange for an introduction, even if it’s just via email. I like to have at least two contacts in mind when I talk to an affiliate (your list from which to choose and pluck will be built over time).
The very last thing I do before I get off that phone – I tell the affiliate the types of businesses for which I’m looking, and ask if they know anyone in that space who I might want to meet. We’ve had individual affiliates who have been introduced to us in this fashion, who have generated over $100K in sales – just from the one introduction.

  • Phone is King

You don’t email people and hope you’ll be able to garner real friendships and get people to promote for you. If you haven’t yet, read Robert Cialdini’s book, Influence at Work; it offers fantastic insight for any business owner. You realize quickly that ‘liking’ is a strong influencer of people, and in order to get the “buddy-buddy” feel, the best way is via phone or by meeting at an event.
On the phone, you can openly and expressively talk about their and your interests, who they know, etc. Your job, in this case, is to build relationships and up the “liking” factor as much as possible – over the phone.

  • Giving First (Sales, Interview, Creative Barters)

One of the best ways to get folks on the phone is by selling their product or service before you ever reach out to them. When  I was still running the brick-and-mortar martial arts gym, I used this approach with a company that sells grappling dummies (and who later became one of my CLVboost Blueprint clients).
At the time, this company was a larger business than us, and before reaching out we sold a dozen or so of their dummies at $600 each. When you make someone a couple of grand, and then send an email and state that you’ve done well with their product and would love to chat and get involved in joint campaigns (read this article for copywriting tips on cross promotions), very few businesses will refuse to talk with you.
This approach is a great way to show that you’re committed and useful. Another great way is through conducting and publicizing interviews. It’s possible for you to write on your own site and related sites in your niche, or host a podcast.
The best ammo is often interviewing the experts; company founders make great interviewees. If you’re publicizing a a potential affiliate’s name and expertise, and helping them by getting the word out, this often develops ‘liking’, and you’ve created an opportunity to bring up the topic of affiliate cross-promotions, either towards the end of an interview or even a week later.

  • Track Your Relationship-Building

For the last three months, I’ve maintained a metric (measuring data) that tells how many new affiliates I’ve spoken to in the last seven days. These are affiliates that command traffic and that could help our business, and they are always new.
This metric has become key for increasing revenue; if we’re consistently getting on the phone and garnering new relationships, we are moving ourselves to the next step and creating a bigger bench of potential traffic sources. Enough said.
Stay Tuned!
In the next video tutorial I’ll tap into “superior customer service for affiliates” – how to treat your affiliates like gold so that they’re willing to promote for you.

Next we dive into ‘Superb Customer Service’ for affiliates i.e. how to treat and interact with affiliates to encourage them to garner ongoing promotions, by cultivating liking and trust. Some of these strategies may seem somewhat counter-intuitive, but I’ve found them to be very useful for leveraging lift and real return on investment (ROI).

Payment Terms and Payment Timing

If you have someone with an email list who is driving for your products or services, then the following common payment terms often apply: once you (the affiliate) sells our stuff, we will wait 30 days and then take all refunds and subtract that from your earnings, and then pay you in one month or at the end of the month in which the promotion took place.
This is a very common strategy for paying affiliates, and one that generally adds up to 50% payout of the transaction value for a digital product OR 5% to 8% on the lower end of recurring ongoing billing and up to 20% to 25% on the higher end for the sale of software. Whatever the specific payment terms, I recommend paying as much money as you can as quickly as you can to affiliates.
If you can immediately show your affiliates that their action(s) yielded results (by paying them quickly), then you will pop into their mind more swiftly than someone who pays them later. The idea is to reward affiliates, while the results from their promotion are still fresh in their minds.
To be clear – I’m not saying you should “give away the farm”, 100% of what your product is every time; clearly, that’s not a sustainable practice. I am recommending that you pay as much as you can on the front-end.
Of course, to pay quickly you need to first master your back-end (i.e. have in place follow-up offers and various other products and services that you sell to other front-end customers), but if you’re selling a digital product with no real manufacturing cost, then you have all the more reason to pay sooner. I suggest paying within one week of when an affiliate has finished a promotion.
An exception to the general algorithm is high-ticket products – if you’re selling a low number of high-ticket products, you may have to factor out refunds from what you pay out to affiliates. That being said, almost under no circumstances have we (in any of my three LLCs) had an astronomic refund rate. We may factor in some refunds as par for the course, from there figure out the highest payment possible, and then pay as swiftly and as much as possible to our affiliates.
Our biggest money makers are recurring subscription products, and we know our customer lifetime value (those who subscribe generally pay $175 over their customer lifetime). In turn, we pay $50 or $60 to affiliates for a front-end sale, which may be less than the up-front ticket price, but we know our customer’s lifetime value and can accurately gauge the ROI. Either way you slice it, the ultimate goal is finding core offerings that yield high payouts to affiliates and convert well to their traffic.
A quick note on promotion length – I recommend an agreed-upon promotion period of 42 to 78 hours. Keeping a shorter window makes it easier to immediately reward behavior, and to climb the totem pole with big affiliates.

Done-for-you-every-step-of-the-way

Every facet of what an affiliate might need to do for your offer i.e. “the creatives” (from banner advertisements or simple email templates to various article materials for SEO or content marketing) should already be done prior to the affiliate’s promotion. Don’t expect for affiliates to create the creatives on your behalf.
Usually, we send out the necessary creatives 14 days before a promotion and then again 48 hours before the promotion; being persistent makes it almost impossible for affiliates to lose these materials or to forget about their agreed-upon promotion.
Similarly, with tracking and reporting, the day after a promotion, affiliates should get an email about how well their promotion performed. Two days later, send them their final numbers in a complete report (i.e. how many sold, per product price, total sales). Tell your affiliates that you want to pay them immediately and ask for the best payment method. Act as if the micro-accuracy for their numbers and payment are more important to you than it is for them.

Special Treatment

The building of relationships and liking can be an invaluable asset for your business’ continued success. I like to make the analogy of the financial world, in which there are people who manage the portfolios of others – whether that be an Edward Jones, a Morgan Stanley, etc. Handling affiliates’ best interests is a similar game.
The boots-on-the-ground sales staff are often not the most highly-trained quantitative traders, but they frequently don’t mind the face-to-face aspect of the business. Their job is to build the liking and the relationships with the customers. This is not done through manipulation, but through active relationship-building i.e. being useful and providing value.
For this reason, when dealing with big affiliates, we’ll often (in addition to the pay out) send a personal card or handwritten note in the mail, along with a small gift (or larger, depending on the offer) to the affiliate’s office after a promotion. This is usually a small gesture, such as a Starbucks card for affiliates and their assistants, an extra $20 to get a dinner or beer on me, or a similar token. Nine times out of 10, the affiliate will appreciate the gesture, even if the offer didn’t go so well. Consider doing something similar to the affiliates that you value.

Introduce Them to Quality People…Often

If leveraged, you’ll find that one of the best gifts you can give to serious business folks is introductions to people who are worth having in their rolodex. This could be other affiliates, vendors in the space where the affiliate is actively looking to build an audience, or similar business owners who are smart and with whom they could socialize and learn. Any time you have a genuine introduction to make, the first people you should think about are your big affiliates – the ones who have the potential to really boost your ROI.

Be useful to affiliates using the above strategies, and you’ll find that you’ll garner the liking factor responsible for building real affiliate relationships.

Next we’ll be speaking about developing a system to manage affiliate traffic. Many email marketers have a tendency to manage affiliate relationships and outreach “gunslinger” style i.e. they attempt to keep everything upstairs in the brain and try to remember which affiliate is promoting on what day, who they’re promoting for, etc.
Just as email marketing needs some level of rigor to ensure quality of execution, so too does affiliate marketing require an equal level of efficiency.
Provided is an abbreviated version of the system that we use to manage as many as 12 affiliates in a given week. I had to come up with a system that could be delegated to someone else. Though you – the company owner, CEO, etc. – may initially manage such relationships, eventually you’ll want to hand this task off to a lower-level employee or contractor.

The Management Spreadsheet

This sample spreadsheet (identical in structure to ours) has 3 columns, and you’ll see that the third column is a bit unique.The rows are labeled by day, indicating daily tasks. The first 2 columns are the marketing media channels that we use – email and Facebook – with affiliate promotions.
By looking at the content in columns 1 and 2, we know which affiliates are promoting for what products, and what needs to be done for that particular day. Any “?” in the content symbolizes placeholder promotions, meaning the  affiliate has not yet affirmed dates; if that day comes and the affiliate still hasn’t confirmed, we assume that promotion doesn’t happen and delete the content.
The “unique” 3rd column is for affiliate care/outreach, containing anything that relates to ongoing communication with an affiliate. We certainly don’t put every detail of every email communication into this column, but we do include a specific message geared toward a particular affiliate for a later date. For example, if it’s the beginning of September, and know I want to reach out to Steve in December and have him introduce me to Allen, I note it in this column. I might make a similar note if I plan on introducing an affiliate to a useful contact.
On any given day, I have an employee go through each column and check whether we’ve updated a particular affiliate, given out the necessary creatives, gotten in touch with a contact, etc. Once a day’s worth of tasks is complete, we bold the day – it’s how we know our day is done.

Our actual action system is a bit more robust in its contents, and includes symbols that tell  whether an affiliate did the promotion (or not), etc., but essentially we’re always bolding and moving down to the next day/row.

Summing it Up

In order to keep an eye on the bigger picture, it’s important to create a system for managing affiliates (MarketingLand provides some additional common sense tips on improving affiliate relationships in this article). This includes tracking the basics i.e. ongoing relationship information, any promotion that you’re doing for an affiliate, and any promotions that you need to ensure happen from affiliate partners.
I would recommend using the above outlined process, or something similar. Keep in mind that nothing is set in stone with this model, but it works well for us as a simple system, and converts what lives in our heads and email threads into a more tangible, visual spreadsheet.
Remember that it’s not quite a system of it’s not delegatable. If you as a business owner develop a system that’s so esoteric and complicated that only you can manage it, then it’s not a system. The goal is to build a simple, visual process that you could train relatively new employee to manage.

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