Affiliate marketing strategies are a viable and appealing growth strategy for direct-selling companies. Affiliate marketing can open up a new selling channel, expand a company’s customer reach, and drive revenue growth. The overall numbers tell the story. In the U.S., affiliate marketing spending reached $8.2 billion in 2022, a big jump from $5.4 billion in 2017.
The truth is affiliate marketing isn’t anything new for many direct sellers, but technology innovations, the power of social media, and the increasing interest in flexible work opportunities in recent years have combined to reimagine the affiliate marketing possibilities for direct selling companies. In many ways, it’s a natural evolution for direct sellers to leverage technology and social media to turn customers into affiliates, and then nurture the affiliates’ progression into building a sales team around gathering/finding more affiliates; increasing earnings based on their overall teams’ sales performance.
It may be a natural evolution, but there’s no set roadmap for success. In this article, we’ll share how we’re seeing direct selling companies incorporate affiliate programs into their overall selling journey.
Defining modern affiliate marketing
While the titles – affiliates, brand ambassadors, influencers – vary from company to company, the basic definition is consistent. By definition, affiliate programs allow someone to earn money for sales they generate for a company. They’re paid a commission that’s based on sales results. The more they sell, the more they earn.
Direct-to-consumer brands have focused on simplifying the ability for a customer to become an affiliate. A happy customer can enroll as an affiliate with just a few clicks and instantly create and begin sharing affiliate sales links with their family, friends, and broader social media community. These social media-based communities greatly expand an affiliate’s reach by providing a built-in audience of people with shared connections and interests.
Behind the scenes, technology simplifies the whole process. Direct selling software platforms can streamline the end-to-end process, from the setup of affiliate links and the tracking and attribution of sales through the calculation and payment of commissions.
Affiliate marketing is a cost-efficient growth strategy because it enables companies to reach an expanded audience while only paying for sales. Implemented strategically, modern affiliate marketing strategies can effectively complement traditional direct selling models and help companies engage and support more sellers.
How to build an integrated affiliate program
Successful affiliate marketing strategies start with knowing your company’s story. To optimize affiliate marketing, you have to understand how it fits within the company’s overall vision, including the implications for existing sales channels and representatives. By starting with a big-picture view, you can create – or refine – your program to enable affiliates to fit seamlessly into your sales structure with appealing options for them to transition into team building down the road.
Mapping out a detailed seller’s journey that imagines each step of the progression and identifies potential issues that your program needs to address is key. The first stage of a seller’s journey should start before any sales are generated – when the future salesperson is a customer.
1. Amplify your shareability.
Establish a strong foundation by understanding how your products can generate shareable stories for sellers. Create a detailed profile of your target customers that includes demographic characteristics as well as psychographic elements like interests, values, and attitudes. From this, craft stories around your brand and products that will resonate. Your aim is to make it almost impossible for your customers not to want to share your message with their connections. You also want to make it clear that it’s possible for people to build a business around sharing their love for your products or services.
2. Consider a referral rewards program.
Incorporating a referral program that allows customers to earn product discounts or freebies can be an effective step in your seller’s journey. But remember, a referral program is not the same as an affiliate program, which pays commissions on sales. It’s important to think through the role your referral rewards program will play along the journey. Will it help to move people to the next step? It’s also essential to understand the costs associated with a referral program so that you can factor that into your total budget projections.
3. Design an affiliate program with progression in mind.
Think of your seller’s journey as a continuum. While people can opt to remain at any level, take a holistic approach that offers appealing rewards to participants at each level and provides incentives for them to progress to the next one.
Define exactly what someone needs to do to become an affiliate and identify what is different; from changes in terms and conditions to the way that they are communicated to. It’s important to think through and establish the journey an affiliate needs to complete to become a representative and build out a sales team. For example, I’ve seen some companies that don’t allow affiliates to recruit other affiliates without some form of requirements (training, kits, etc) – whereas with others; they allow recruitment from the start.
This gives you – and your sellers – a clear progression path, including action steps and clear titles.
4. Fully understand and model the economics and implications to the field.
There’s only so much money available to spend on sales compensation; so it’s important to take the time to fully understand the cost implications and how this money is allocated as you embark on launching an affiliate program. Generally, affiliate compensation models include attributes that will drive the need to adjust payouts, such as giving a discount for using an affiliate’s code or link, or paying a higher initial commission on the sale.
One way that I’ve seen companies handle this is through leveraging multiple “volumes” associated with items, where you can pay a reduced commission (“Commissionable Volume”) but enable sales qualifications to be met through a consistent “Qualification Volume”.
5. Think through what’s next.
How do you plan to engage with affiliates? Will they be incorporated into your existing training and communication plans? Or will they require a segmented approach? Review your training content to identify opportunities to leverage it with affiliates. From this, you can pinpoint milestones along the journey where you’ll need to create tailored training tools to help them succeed. From a communications perspective, build timely, targeted messages to support affiliates along the journey and encourage them to take the next step by sharing the affiliate opportunity – increasing their earnings potential.
An integrated affiliate marketing program should be designed so that affiliates can easily take the next step in their sales progression – building a sales team. The sales journey must include solid training, communications, and technology strategies.
Your technology platform makes the journey work, from enrollment as an affiliate and sales attribution through automated compensation calculations, payouts, 1099 reporting, and sales tracking. Evaluate the capabilities in place and look for additional opportunities to streamline and automate the end-to-end journey, including putting information and tools at your sales team’s fingertips. Integrate your technology as much as possible to enable a seamless journey for affiliates and representatives – and seamless behind-the-scenes administration and reporting for your company.
While affiliate marketing offers an effective growth strategy for direct sellers, every journey will be different based on a company’s unique story and goals. Does your sales journey include an affiliate marketing program? What best practices are you seeing?
By Daryl Wurzbacher – CEO, ByDesign Technologies a Retail Success Company
Originally Published In: The World of Direct Selling – https://worldofdirectselling.com/affiliate-marketing-direct-selling/
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