Over the past several years we’ve seen an influx of Shopify based direct-to-consumer (D2C) companies that have launched affiliate programs to grow that have then run into challenges with the traditional “standard” affiliate model. Through our partnership with Shapetech Solutions (Shopify experts & provider of our Shopify connector), we’ve been able to gain a wealth of experience in recognizing the strengths that propel these companies forward and the critical gaps that hinder their growth. By uncovering the challenges direct-to-consumer brands face with their traditional affiliate programs, we’ve found a number of strategies that can be leveraged in the direct selling space to optimize the affiliate programs we’re seeing companies continue to launch.
Two Challenges Identified
The two biggest hurdles in scaling traditional affiliate programs are a combination of low productivity of affiliates and difficulty recruiting new affiliates. There are a striking number of direct-to-consumer brands with affiliate programs that have extremely low engagement rates, with only a minority actively contributing to sales volume. A lack of participation undermines the foundation and purpose of an affiliate program, making it unsustainable for growth. Adding to the issue is the difficulty companies face in recruiting new affiliates, creating a two-prong scenario where they’re not truly gaining the benefit they were looking for from the affiliate program itself.
Introducing the ‘Super Affiliate’ Concept
The new strategies we’re seeing these companies adopt go far beyond a simple affiliate model; and are setting the stage for what we are calling ‘Super Affiliate’ programs. A new model is coming into focus as direct-to-consumer brands using Shopify find that they need to lean increasingly towards direct sales/MLM strategies, while direct sales companies continue to expand into the affiliate marketing space.
A ‘Super Affiliate’ model combines components of a traditional affiliate program with key learnings from direct sales/MLM strategies. It represents a synthesis of the most effective sales productivity and team building strategies with the broad reach and high adaptability of affiliate marketing.
“MLM companies have spent the last 70 plus years refining the best practices for managing an independent salesforce,” Connor Hester, CEO of Shapetech Solutions observed. “There is arguably no industry more knowledgeable at it, yet the MLM model itself has struggled to stay attractive with the modern part-time sellers.”
“In the last few years, the popularity of affiliate models have continued to rapidly grow, yet, affiliate models are becoming increasingly more competitive and showing their strains when it comes to new affiliate growth, engagement, and productivity,” Hester added. “Savvy DTC and retail companies are starting to realize that there are numerous applicable learnings from MLM from compensation practices like overrides and fast start bonuses to tools and training.”
This perspective underlines the importance of integrating the best practices from the direct selling/MLM space into affiliate models to drive productivity and growth. A ‘Super Affiliate’ program integrates effective training, compensation, and sales tools from direct selling with established best practices within an existing direct-to-consumer e-commerce company that is attempting to drive growth through their affiliate program. This combination lays the groundwork for a more dynamic and engaging ‘Super Affiliate’ ecosystem.
3 Common Strategies for Success
At ByDesign, we’ve collaborated with affiliate companies looking to overcome these challenges and seen the following common strategies emerge:
1. Affiliate Definitions:
The definition of an affiliate’s role is more than a mere job description; it is the blueprint for their engagement and success. We’re seeing a big focus on truly thinking through and understanding the role of an affiliate in a particular company’s ‘Go To Market’ strategy. Depending on the exact product and strategy, we’ve seen scenarios where affiliates can play different roles – such as:
- Sharing links and creating awareness – Standard affiliate models, where incentives are based around customer acquisition.
- Increasing customer retention and lifetime value – Focus on a more relationship sales model, where incentives are based not only on acquisition – but also re-ordering/lifetime value. In traditional affiliate models, this isn’t nearly as common and we’re seeing this become a competitive advantage for companies that adopt this.
- Creating unique content around product/experiences – Focus on creating unique and potentially viral content, with incentives around content creation, customer acquisition and ongoing sales.
We’re seeing the most effective programs being ones that clearly delineate the expectations and responsibilities of the affiliate. This clarity not only guides affiliates in their efforts but also aligns their objectives with the strategic aims of the company.
2. Training and Upline Sales Leadership:
Once the exact role of the affiliate is established along with the shared measures of success – the next area of focus is how to drive results. Leveraging leadership strategies, we’ve traditionally seen in direct sales companies where affiliates have a “sales leader” or “upline” can help motivate and drive productivity. We’re seeing companies benefit from finding ways to leverage their leaders in the field to increase:
- Affiliate Retention – Retaining affiliates long-term and keeping them motivated is often the result of the training systems in place, leadership structure, and a focus on the teams they belong to. When the retention of an affiliate is increased, the lifetime value of their customers tends to follow as the customer experience is personalized and improved.
- Affiliate Engagement – Most affiliates are going to be more engaged and productive when they can benefit from a leadership structure that can provide valuable training, set measurable goals, and offer recognition for accomplishments.
The influence of upline sales leadership is a cornerstone of any successful direct selling program and we’re seeing affiliate companies look to leverage components of this strategy. The key is to empower these individuals with the tools and autonomy they need to inspire their teams creating a cascading effect of increased activity, where motivated affiliates contribute to a culture of success that permeates the entire organization.
3. Incentives and Recognition:
In traditional affiliate companies, the concept of paying a straight commission for sales is the foundation; but we’re seeing the need for these companies to motivate and drive more than just a casual personal referral. The direct selling space has iterated on a number of ways to drive and motivate productivity and we’re seeing a number of these being leveraged within affiliate companies:
- Overrides to motivate the sales leadership positions to drive productivity within the affiliates by paying some form of a level bonus.
- Recruiting incentives in the form of fast start bonuses to drive and motivate recruiting additional affiliates.
- Training related incentives and bonuses around either attending/growing or driving their own training.
- Recognition and progression by leveraging simplified titles that can motivate sales increases and team growth.
The key we are seeing is that just having a straight “pay for referrals” isn’t enough to truly drive and maintain productivity levels. This is where learnings from direct sales incentives, promotions, and bonuses can be key motivators – while being combined with a leadership presence.
Where to Go From Here:
The emergence of ‘Super Affiliates’ is not merely a trend but a pivotal movement within the direct selling landscape, as we’re seeing adjacent verticals leverage best practices and strategies we’ve developed over the years within our industry. We’re collaborating with a number of these direct-to-consumer companies that are adopting these strategies. We are certain there will emerge a set of best practices that can unify the best of the low barrier to entry affiliate model, while driving productivity and growth that you’d see in a traditional direct sales company.
Author: Daryl Wurzbacher – CEO, ByDesign Technologies a Retail Success Company
Originally Published In: The World of Direct Selling – https://worldofdirectselling.com/strategies-for-super-affiliates/
Learn more at ByDesign.com or contact us to schedule an mlm software demo.
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