Creating a successful affiliate program is equivalent to creating a money-making machine. It’s the ultimate marketing channel.

Affiliate programs enable companies to only pay for performance. It’s like having a global team of salespeople that only work on commission. No hourly wages, no benefits – just pure performance.

Of course, not every affiliate program is wildly successful. So, what makes a great affiliate program?

Why did Shopify’s affiliate program explode while other e-commerce programs did not? Why is Amazon’s program wildly popular while Target’s is hardly talked about?

There are a few answers (which we will get to), but the main idea is simple; if you wan’t to create a successful affiliate program, you need to think like an affiliate marketer. This is similar to the process of thinking like a customer when you design a product.

The best affiliate marketers are business people. They are not salesman, brand ambassadors, or customers looking for a side hustle. Affiliate marketers make their livings by identifying and promoting the best programs.

How can you make your affiliate program the next big thing? Follow these tips.

Set an Attractive Payout

This first point should be obvious. Money always talks loudest in business.

If you want to attract elite affiliate marketers, you need to have an attractive offer. Note that I didn’t say you need a high payout. High dollar payouts aren’t always the most attractive.

For example, a $500 payout may be unattractive for a few of the following reasons:

  1. You have a subpar product that is hard to sell
  2. Your product sells for $10,000
  3. You only qualify a fraction of the leads you are sent

An attractive payout is one that convinces an affiliate marketer that he/she can make a nice ROI. This is essential to any successful affiliate marketing campaign.

Big Brand Affiliate Programs

Surprisingly, I see so many companies fail in this area. They will offer 5% payouts on $500 products with high margins. Their greed hinders their success.

Remember that affiliates are only paid for performance. Every dollar that comes in as a result of affiliate marketing is pure profit. If you have a 50% margin and you only share 5% of that with the affiliate marketer, you are being stingy (and the affiliate knows it).

Would you rather have 100 affiliates being paid 5% or 10,000 being paid 25%? I’d surely choose the latter (assuming it was still profitable).

Spy on the Competition

Deep research is at the heart of affiliate marketing. Before an affiliate marketer enters a niche, they analyze opportunities left and right. This analysis includes affiliate programs.

Consider the following. Assume an affiliate marketer is looking to promote a supplement company and comes across the following options:

  1. Company A offers 5% commissions
  2. Company B offers 10% commissions
  3. Company C offers 15% commissions

Assuming all else was equal, which would you choose? Option #3 of course.

Below is a real example where Bloomingdales and Saks Fifth Avenue are less appealing than Sears, TJ Maxx, and JCPenney. The former programs have lower payouts and lower EPC’s (earnings per click), giving little incentive to an affiliate who wants to promote a retail program.

Affiliate Program Research

Of course, you can compete on more than just price, but ultimately dollars talk the loudest.

It should also be noted that if you set your commission too low, affiliates may choose to promote your products through another affiliate program.

For example, if Supplement Company A pays 5% commissions through their affiliate program and their supplements can also be promoted for 4-5% commissions on Amazon, affiliates are likely to work with the Amazon affiliate program. It’s both easier and more likely to lead to higher commissions.

This means the company is losing out on valuable customer data, website visitors, and additional margin that may come from direct selling (vs. selling on Amazon).

Focus on the Technology

Serious affiliate marketers use serious tools. They track everything from ad copy to landing pages to audiences. If you have subpar tracking tools, you won’t attract the best affiliates.

I’ve run into this issue with many of the companies I work with. I’m ready to promote their programs and then I find out they want to give me a link and send me a commission report by email every week. No thanks.

With tools like Ambassador, HasOffers, and FirstPromoter, you can set up a fully functional tracking system with minimal work and expenditure.

Invest in the technology if you want to attract serious affiliates.

Affiliate Marketing Technology

Work With Your Affiliates

Your affiliates don’t work for you; they work with you. Your goals are aligned. You both make more money when you sell more product.

Work closely with affiliates to make sure they have everything they need to maximize their success.

The best companies I’ve worked with have supplied custom creatives, landing pages, coupons, and more. They also run contests and promotions to keep affiliates excited about the program.

Take On Some of the Risk

When you first launch your affiliate program, it can be difficult for it to gain traction. Many companies reach out to affiliates and pitch the program.

Guess what.

Affiliates get tons of these pitches all the time.

I can’t count the number of pitches I get that go something like this:

We have this awesome product. We just launched a program. Do you want to promote it? Sign up here: #LINK#

It doesn’t take a marketing MBA to figure out that this isn’t the strongest pitch.

When you recruit affiliates, you are essentially asking for them to take on all of the risk. They invest their time and budget into promoting your product and you only pay if they deliver results.

If you really want to stand out, sweeten the deal. Take on some of the risk yourself. Sure, this is counterintuitive to the “pay for performance” model, but it can help you attract the right affiliate marketers, which could pay off in the long run. Of course, you need to properly vet affiliates first in order to minimize your risk.

Here are some of the ways companies have stood out when pitching to me:

  • Offer to pay for a sponsored post to start the relationship
  • Offer to cover some ad spend
  • Facilitate a unique partnership vs. pure affiliate deal
Affiliate Program Incentives

Create a Strong Brand

Which hypothetical info product do you think would be easier to promote:

  1. An business course created by Mark Cuban
  2. An investing course created by Joe Nobody

Clearly, the first example would be much easier to promote and, therefore much more attractive to an affiliate. Of course, Joe Nobody can’t just become Mark Cuban over night, but there’s a middle-ground.

If you want to create an attractive affiliate offer, you need to have an attractive company. Affiliates should want to associate with your brand. Companies like Shopify and Amazon have armies of affiliates because their brands are already so strong.

They offer great products that make it easier for an affiliate to get a commission. Don’t expect affiliates to carry the weight of your marketing team. You are responsible for building a reputable company that attracts elite affiliates.

Amazon’s affiliate program does well despite its low commissions and short tracking window. Check out the payment schedule below:

If any other company offered a 5% payout on digital products with a 24-hour cookie window (tracking), they would be laughed at. Amazon gets away with it because they’ve built a strong brand.

Final Considerations and Recommendations

If you want to create a successful affiliate program, don’t sleep on the steps above. Here are a few other ways you can attract great affiliates:

Consider Your Cookie Window – Your “cookie window” is the window in which a referral counts for the affiliate. If you have a 30-day window, affiliates will be rewarded for any sales that come within 30 days of someone clicking their affiliate link. Affiliates always appreciate longer cookie windows. SEMRush offers a competitive 10-year cookie window which is highly attractive to affiliates.

Affiliate Program Cookie Window

Consider Your Tracking Rules – What happens when two affiliates refer the same customer? Do you reward the first affiliate to refer the visitor or the last affiliate who drives the sale? There’s no right answer here, but you should consider what works best for your company.

Consider Your Payout Terms – Favorable payout terms can be viewed as another benefit to affiliates. If one company pays Net 60 (i.e. 60 days after the commission is generated) and another pays Net 7, the latter is far more attractive. Cash flow matters and, in an industry filled with a lot of sketchy programs, offering fast payouts makes you stand out.

Offer Tiered Commission Rates – Reward your top performing affiliates and incentivize performance by using a tiered payout structure. Affiliates will receive different payouts depending on the amount of people they refer. For example, Hostgator pays $65/signup for affiliates who refer 1-5 customers per month and $125/signup for affiliates who refer 21+ customers.

Tiered Commission Rates

Offer “Exclusives” to Affiliates – Turn your affiliate relationships into partnerships by offering “exclusives” to affiliates. These could be exclusive landing pages, exclusive offers, exclusive coupons, or exclusive access to certain marketing channels. For example, if a company has an affiliate performing well with Facebook Ads, they may offer that affiliate exclusive rights to that advertising channel (meaning other affiliates can’t promote using Facebook Ads). Similarly, many companies offer affiliates access to exclusive deals (i.e. free trials and coupons) that make it easier for the affiliates to promote.

Affiliate Program Exclusives

Share What’s Working – Your goals are completely aligned with those of your affiliates. If a certain marketing strategy is working well, share it with your affiliates. For example, if your business has seen great success with Pinterest Ads and subpar results with Google Ads, share that information with your affiliates.

Share Success Stories – Social proof is incredibly powerful. If you have successful affiliates, share their stories. These stories can help affiliates better understand the potential of your program. For example, many companies will make statements like, “Our top affiliate made $50,000 last year!”

Affiliate Program Social Proof
Example of Social Proof