How to Set Up a Partner Marketing Program
How to Set Up a Partner Marketing Program
There’s no denying that marketing is expensive. It takes a lot of time, money, and planning to get a campaign off the ground. That’s why many brands are turning to partner marketing programs to achieve measurable results while also saving money.
Partner marketing programs are a growing force in the digital marketing world. These programs are a great way to tap into the expertise of other companies or organizations to help you reach your target audiences. Instead of doing everything on your own, partner programs provide you with a network of people who can help you with everything from content creation to social media management. You can then focus your time on more strategic projects.
In this article, you’ll learn everything you need to know about partner marketing programs. Let’s get started.
What is a partner marketing program?
A partner marketing program is a strategy that companies use to partner with other businesses, brands, and organizations in order to expand their reach and build more connections. It’s one of the most effective ways for companies to increase their sales, as well as connect with other companies who can benefit from the programs.
A partner marketing program, also known as an affiliate program, is an ecosystem consisting of three invariable actors:
- Advertiser, a merchant who ones a product or a service;
- Partner, typically known as a publisher or an affiliate, promotes an affiliate product via their online platforms;
- Buyer, a final consumer of a product or a service.
How do you start a partner program?
Creating a partner marketing program can seem like a challenge. You want to reach your ideal customers with a variety of partners, but you don’t know where to start. You don’t know what goes into creating a partner marketing program. Or perhaps you’re not completely sure if partnership marketing is the right strategy for your business now, as you simply can’t evaluate needed for its resources. In this guide to a partner marketing program, we’ll walk you through the main preparation steps that a brand needs to take into account when planning a partner program launch.
Set your partner program goals
First, you’re going to need to set some goals for your program. What are you hoping to get out of this? Do you want more customers? More revenue? Broader brand recognition? Something else? You’ll need to be specific about what you hope to achieve before you can set up a productive partner marketing program.
Obviously, your main goal is to bring more revenue to your business, however, being more specific will ease the evaluation of results and reporting. Further, and more importantly, clearly-set goals will also help you plan the partner program promotion, set program policies, prepare marketing collateral and define communication strategy with affiliates. When setting goals, think big picture and long term rather than just focusing on the immediate results.
Among the common goals that partner program owners set are:
- Generate X new leads every month;
- Bring in $X in new sales revenue this year/ quarter;
- Decrease customer acquisition cost by X% by end of the year;
- Make a partner program an integral part of lead generation accounting for X% of total yearly revenue;
- Generate X new leads per quarter;
- Increase brand awareness by X%, etc.
Before you roll your eyes thinking that it is one of the most over-used advice, let us get our point across. Obviously, you can’t know their financial goals, but you need to keep an eye on their strategy, which partners they recruit, commissions and bonuses they offer, the way they manage their program: affiliate network or in-house, etc.
The core aspect of the competition is the recruitment of affiliates. As you offer similar products your ideal affiliate persona will be almost identical making the competition for the best affiliates very intense. That’s why you need to know what your competitors offer so that you can come up with no less alluring proposals.
For example, if your competitors pay affiliates based on reaching the threshold, think of offering monthly payments. The perspective of getting their commissions faster is very likely to attract new partners.
Define partner commissions
Many factors come into play when setting your affiliate commission rates: the type of product, the number of sales, and how you want to set up your affiliate program. A high commission percentage may work for your business as it will encourage affiliates to promote the service more. However, if you’re selling products with low margins or highly-priced items then these need to be considered before setting an affiliate commission rate.
The most common affiliate commission types:
- Percentage Rate Commission – the most common type of affiliate commission, when affiliates earn a set percentage from the whole amount of the sales or a percentage of the customer’s total order.
- Flat Rate Commission – a set non-recurrent fee that affiliates get once they generate a sale. This is a steadfast commission predetermined for each product. Affiliates will earn the same amount if they generate the same product sale again.
- Tiered Commission Rates – a more complex structure that is expected to motivate affiliate partners to drive more sales. In this case, the more affiliates sell, the more they earn as from a certain sale their commission increases. Tiered commission rates could look like this:
- Sales 1-10: 10% commission
- Sales 11-20: 12% commission
- Sales 21-30: 15% commission
- Sales 31-40: 18% commission
- Sales 41-50: 20% commission
The average affiliate commission rate varies greatly depending on an affiliate vertical and product type, but it is common for the commissions to vary between 5 and 30%.
The Key Things to Consider When Determining Affiliate Commission Rates
- Calculate your product return on investment. First and foremost, you need to consider the initial cost of your product/service, how much you invest in its development, estimate the profit you get and decide how much you are willing (and how much is reasonable) to give away to affiliates.
- Flate rate or percentage. You can choose to set a fixed amount for each sale or to offer a percentage of the final cheque. Usually, businesses with one product offer a flare rate, while ones with a diverse product catalog, for example, most eCommerce businesses, can choose to pay the percentage. What suits you more, depends a lot on your product and pricing.
- Monthly or threshold payments. Depending on product price and frequency of repeated purchases you can choose to offer monthly or threshold payments to your publishers. At large, affiliates prefer to consistently receive money monthly. However, with the attractive commissions from product sales, they can be also more motivated to drive more sales on threshold conditions.
- Consider your average customer lifetime value. When the average customer CLV is rather long, businesses can afford to pay more to affiliates for bringing new customers.
- Compare commissions of your competitors. Your offers must look competitive against the ones of your competitors.
- Consider bonuses. You can consider adding bonuses (commission tiers) to motivate your affiliates to drive more sales and earn extra. Bonuses can be successfully combined with the threshold payments.
- Review affiliate commission occasionally. Nothing stands still. Make timely adjustments to your affiliate commissions if there are sufficient changes in the markets that may require commission corrections.
The commission you set for your affiliate partner will have a significant impact on the success of your affiliate marketing campaign. Setting the commission rate too high will leave you without a significant piece of the profit, but putting the rate too low will not motivate the affiliates to promote your products. To find the perfect balance, you should consider how relevant your product is to the affiliate’s audience, how much work they need to do, e.g. building & hosting a funnel (landing page), and how much profit they will make. The key is to find a commission rate that is reasonable and motivating enough to drive sales.
By the way, at IREV Lead Distribution we have a feature that significantly eases the process of funnel management. Feel free to have a look and contact us if you are interested.
Set affiliate program policy and rules
As with any other business deal, working with affiliates requires a certain legal agreement that would define the rights and obligations of both sides. Here you specify affiliate commissions and payouts, acceptable payment methods, and any additional rules. No less important, in the same document, you specify acceptable traffic, keywords that affiliates could target, creatives, and marketing collateral that is allowed.
Prepare marketing collateral
To get started your affiliates need to have access to the marketing collateral they can use while running campaigns for your brand. The more detailed it is, the better it will work for your brand. Having a library of marketing materials and resources for affiliates can be a great way to grow your affiliate program sustainably. Typically a well-thought-out affiliate marketing collateral consists of a brand guide, examples of creatives, image banners, examples of articles, social media posts, youtube video descriptions, etc.
Make a partner recruitment strategy
From the start, you would not have new affiliates coming to join your program every day. Thus, you need to develop a promotional plan for your partner program to spread the word about it and make it attractive to join. You may also try reaching out to individual bloggers and publishers if you believe they can add value to your brand. It means that you should start with making a persona of your ideal affiliates. Once it is done try to reach them out on the relevant platforms.
Some of the most effective ways to find & recruit affiliate partners are:
- Industry events
- Landing page
- Email signature
- Marketplaces / Affiliate program directories
- Banners on your website
- PPC Campaigns
- Reach to your existing customers
Choose a platform to manage your program
To manage your partner program you obviously need software that would make it possible to manage relations with affiliate partners, add new advertisers, analyze the results of the campaign, optimize campaign settings, and invoice partners. There are three ways you could do this:
- Using Partner Program Platform
You can launch your program and subsequently seamlessly manage it on a dedicated SaaS platform. Nowadays it is the most popular choice to be able to keep track of all partner marketing efforts and report their results consistently. The cost of the monthly package is rather affordable, platforms come with a bunch of must features and usually, there is a place for customization. The price for a SaaS partner management platform usually ranges from $500 to thousands of dollars. The price is defined by the monthly amount of events, conversions for example, and extra smart features platforms may offer.
With SaaS platforms, you always get a member of the support team to help with setup processes and recommendations on overall campaign management along the way. In this way, you get advice both on the technical and business side.
If you have a look at the IREV partner platform it provides a complete infrastructure to manage, analyze and optimize campaigns that affiliates run under your partner program. You can launch your first campaign and grow your network of affiliates. With the extensive analytics & reporting tools, you can collect and monitor your data in real-time, reviewing it in the customizable for your needs dashboards. Additionally, there are plenty of smart features that could distribute traffic to the best-match offer and thus monetize your traffic at a higher rate.
- Joining an Affiliate Network
As an advertiser, you can join an affiliate network and create a partner program on their premises. It will guarantee you a quick start with access to analytics features a chosen affiliate network provides. Make thorough research and ask their sales representatives all possible questions, because with an affiliate network there is no option to customize the platform and add missing features.
You will be assigned an account manager who would be helping with setup and ongoing support. The level of support and an average answer speed could vary and depend on the package you pay for.
The price for running a partner program on the affiliate network premises consists of several variables: a set-up fee that varies from $500 to $2000, a commission from your revenue ( on average 20 – 30%), a monthly fee, and additional fees for extra services. In some cases, a network might also require a first-time deposit as a guarantee of an advertiser’s intention to work on the platform and actively promote the affiliate program. These deposits are very common in the gambling niche.
- Building a Custom Solution
There is always an option to order a custom development of an in-house platform that you would be a full owner of. Some of the biggest and oldest affiliate networks run their programs on custom-built solutions. However, with a nowadays rich choice of ready-made platforms, building an in-house solution will significantly postpone the program launch and will definitely come up with extra costs not only for the development but also for consequent maintenance.
Instead of Conclusion
If you are wondering how you can keep track of your partner program efforts and report the performance consistently, let us show you how you can rapidly launch and easily manage a partner program on the IREV partner platform. We will demonstrate how you can keep track of all your affiliate marketing activities, and see exactly whose efforts have brought you a new sale.
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