Starting an affiliate program for your product or service is one of the most effective advertising tactics in 2021. Having affiliate partners comes with its fair share of benefits, such as not paying before your product or service is sold, having reliable ambassadors for your product or service, and reaching untapped market segments.
These benefits sure look attractive, and that’s why some business owners rush towards starting affiliate programs. At times, businesses launch affiliate programs too soon, only to end up with failed campaigns.
Choosing the right time to launch affiliate programs is not just about being too early but also being too late. Being too late into the affiliate game means dealing with more competitors. The perfect time to launch a program refers to a position where you can reap the benefits of being a first mover with a solid base under your feet. It is crucial to know the right time to launch an affiliate program, and this article is about the things that should determine the timing of your affiliate campaign launch.
Affiliate Programs and Their Benefits
Before discussing the methods to determine the timing of your affiliate program launch, let’s just have a brief overview of affiliate programs as a whole.
Affiliate marketing is a process to promote your products or services through various mediums and channels in exchange for a commission. These mediums can be blog posts, social media, or a simple shoutout in a YouTube video.
For simplifying, any way you can boost your consumer base through a third party can be considered affiliated marketing. The affiliate marketers are equipped with data and tools to help your products reach the right audience to boost sales. They promote your business to get recognized while building the brand and reputation for your business.
When you open a program that invites these affiliates to promote your products or services, it is called an affiliate program.
Though affiliate programs come with a plethora of benefits, the most attractive one is saving on your marketing budget. In most traditional marketing methods, you have to pay for advertising and hope customers will purchase your products or services. Things are different when it comes to affiliate marketing.
Your affiliate marketers will promote your products or services with a commission-based incentive. You have to pay them commissions when they convince someone to take the action you desire (make a purchase, give contact information, download an app, etc.).
Affiliate programs are comparatively safer than traditional marketing campaigns, as you pay the affiliates only after you receive what you want.
When to Start Your Affiliate Program
Now that you know what affiliate programs are and what it can do for your business, let’s discuss the convenient time to launch a program. While some may claim it’s never too early to start your affiliate program, we are a bit skeptical. You need to fulfill some minimum requirements to start marketing your products and services.
Launching a program without fulfilling the minimum requirements will do more harm than good to your business. Here are these requirements.
Product-Market Fit
To become scalable, your products or services need to satisfy the needs of a market and the potential consumers. Product-market fit is the stage of your business where you have successfully identified the targeted consumers and your consumers are satisfied with your product.
An ideal product-market fit scenario looks like this: people know about your product or service, are talking about it, referring your products to their friends and family, and getting the value they are looking for.
At the early stage of your new product/service, it is normal to tap into small segments of vast markets. Starting affiliate programs at this stage is not a good idea because affiliate marketers are not your salesmen. They don’t figure out what you are selling and to whom you are selling. You need to understand your selling points and your customers first and then push for growth to this niche through affiliate programs. Product-market fit ensures you have all of that covered and can recruit affiliates who appeal to your ideal customer.
When you know your product or service has a significant impact on your consumers and are willing to pay money for your product, think about starting an affiliate program. It is easier to recruit affiliates at this stage as well. People are already seeing the value that your product or service brings to them and they would love to receive a commission to refer others who would benefit from your offering as well. Especially by signing up to your affiliate program and getting paid to do so.
Product or Service Traction
Traction is evidence that your product or service is scalable. The growth of a business highly depends on your business model and sales. With the right traction in the right market, you can scale your product or service with an affiliate program. There are several ways to measure the traction of your product or service. You can also consider other indicators such as the number of sales, percentage of positive customer reviews, and percentage of retained customers.
Before considering adopting an affiliate strategy, you should also check if your business has enough traction or sales to interest potential consumers when your affiliate partners tell them to take an action.
Know the Attractive CPA Rate for Affiliate Partners
CPA stands for cost per action. When you recruit affiliate marketers, you pay them commission for every desired action they trigger for you. To offer them an attractive CPA rate, you need to know your numbers first.
Actions can range from clicks to requests for service to filling out forms, app installations and downloads, and direct purchases. However, you cannot agree to a price unless you know your cost, sales number, or average revenue per user. If you have to spend too much money to receive the action, you should reconsider your decision to launch an affiliate program.
You may want to get the job done by offering low rates, but you will not get responses from good affiliate marketers that way. Affiliate marketing takes work and time, and marketers won’t consider your program worthwhile if the rates are too low since after all they take on a lot of risk only getting paid when the agreed action is completed.
Have Industry Data
Before recruiting affiliate marketers, do your homework. You can start by testing some paid media like Google, Facebook, YouTube, Instagram, Pinterest, etc. Running paid ads will give you metrics like CTR (click through rate), best target market, acquisition costs, and ROI. Sharing the data with your affiliate partners will help them promote your products or services to the right audience. They can also estimate how much profit they can make from your affiliate program by comparing the data from the previous campaigns they did for a similar business they promoted.
If you haven’t tested any form of paid media, you won’t have access to such information, and your affiliate partners will most likely pass or take a shot in the dark while promoting your product or service.
Choose the Right Traffic Source
Every business model has its own strategies and tactics. Strategies that have worked for some businesses may not be suitable for your business. We have seen many products have converted well from YouTube reviews, and some were rejected because YouTube or the reviewer didn’t have the right audience.
If you are keen to get some YouTube reviews, the best method is to reach the influencer and offer a flat amount first. Offer the flat amount for a positive review or a tutorial for your product or service. If a few of these reviews bring enough traction, then you can consider YouTube as a potential traffic source. The same technique can also be applied to other media like Instagram or TikTok, depending on your target audience.
Once you have figured out the right traffic source, then you can start searching for potential partners who have enough followers or a media buying speciality on that traffic source.
Build Your Business Brand
It is your business, and you know the best about it. It is your responsibility to build the business brand. When an affiliate partner promotes your products or services, they represent your brand too. You must ensure your brand is being represented the right way. So, keeping some creatives, dedicated content pages, videos, banners, or product reviews prepared is a must. It will give your affiliate marketer the right idea about your business and branding.
Your affiliate partners can use all these prepared content pieces and start promoting your products or services as soon as you get them on board. If they create their own content, they can take inspiration from yours.
Trusting a third party with a huge responsibility like promoting your products or services can be a tough decision in and of itself. If the timing is wrong, your business will face massive drawbacks. Therefore, knowing the exact time when to adopt an affiliate program is crucial.
Yes, there are many success stories where business owners successfully launched affiliate programs from the very beginning. It doesn’t mean you will become successful with affiliate programs by adopting them at the earliest opportunity. It is better to make an informed decision rather than a wild guess.