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How to Win Loyal Customers with Affiliate Marketing


Word-of-mouth has long been a powerful marketing tool, but with social media today it’s even easier for shoppers to turn to people they know for endorsements. In fact, according to Nielsen, 92% of global consumers trust this type of “earned media” above all other forms of advertising. This trend has led to a boom in influencer and affiliate marketing. Once we clarify the difference between these two, we’ll offer strategies for how to win loyal customers with affiliate marketing.


Influencer vs. Affiliate Marketing


Let’s first get on the same page regarding influencer and affiliate marketing. Both see brands partnering with people online that have credibility with the brand’s target audience. These individuals are typically active on social media, blogging, or videos and have loyal followers who share their interest in a specific niche.

A shoe distributor, for instance, might partner with a well-known video blogger (vlogger) who focuses on athletic shoes to build credibility and generate brand awareness for a new running shoe product launch.

In an influencer marketing scenario, the brand might provide a sample of the shoes in the hopes that a positive video review would boost sales. Or the shoe company might invite the vlogger to make a video for its own branded site to help build buzz for the launch and strengthen brand awareness.

Taking an affiliate marketing approach, however, the same company would partner with the same vlogger, yet this time would offer a revenue share of any sales they helped generate.

While free products and even just the excitement of being the first to know about the brand’s business can be enough to motivate influencer marketers, some influencers are also paid a flat-fee for their partnership.

The affiliate marketer, on the other hand, is paid consistently based on an established compensation structure. Whereas influencer marketing is typically more focused on brand awareness, the affiliate marketer is working to help the brand acquire customers and grow revenue. Using tracking cookies and a pixel placed on the brand’s site, the shoe company in our example would be able to calculate ROI in terms of sales, orders, subscriptions, average order value and more. 

One more big difference? The influencer typically doesn’t disclose their official partnership with the brand. However, the affiliate must do so to avoid running afoul (either for themselves or the brand) of the FTC’s Truth in Advertising laws.


Why Affiliate Marketing? 


Affiliate marketing is one of the fastest-growing sources of revue for online retailers, according to a BI Intelligence Study. By 2020, U.S. spending on affiliate marketing is expected to have reached $6.8 billion.

Some 40% of US retailers have cited affiliate programs as their leading customer acquisition channel.

Further research indicated consumers that made their first purchase with a brand through an affiliate in 2016 resulted in a 21% higher average order value and 58% higher average customer revenue. These new customers came in at a rate 7% higher than other channels and began showing their value within the first year with a 19% higher rate of orders.

With these kinds of numbers supporting affiliate marketing, you can bet it’s a competitive environment. Read on for tips to effectively plan and manage an affiliate marketing program.


How to Plan & Manage Your Affiliate Marketing?


Just because you may be new to affiliate marketing, it doesn’t mean you don’t know what you’re doing. You can approach this channel with some of the same strategies you would any other — you’ll see.


#1 Set specific goals.

Deciding to get into affiliate marketing just because everyone else is doing it is not a savvy move. You will want to set up tangible, measurable goals. Acceleration Partners, an affiliate marketing company, lists several possible metrics you may want to use:

  • Registrations, Email Sign-Ups, Giveaway entries
  • Sales, Orders, Subscriptions
  • Conversion Rate
  • New vs Returning customer
  • Average Order Value
  • Cost Per Acquisition (CPA)
  • Customer Lifetime Value (CLV)


#2 Know your audience.

Again, as with all successful marketing programs, you need to identify the target customer. The goals should be developed in relation to this audience. For instance, if the objective is to retain and sell more to existing customers your affiliates will address different pain points than if your goal is to recruit new ones. 

Affiliate Royale suggests getting to know your audience via user surveys, Google analytics, social listening, and reviewing what your competitors are doing to build audience relationships.

It takes time and research, but the better your understanding of your audience the more targeted your messaging can be around how your product provides a solution.


#3 Develop your compensation model.

Effective affiliate marketing requires proper margin management. According to Econsultancy, “affiliate fees vary incredibly…it’s common for retailers to pay 5-15% in percentage of sales, but in some industries it’s much more.”



Image credit: Amazon


Amazon, which operates the world’s largest affiliate network with over 900,000 members worldwide, tells potential participants they can earn up to 15% in referral fees. The amount depends on the product sold – with video game consoles netting 1% while an Amazon kindle could generate 8% revenue. 


In determining a commission structure, you might weigh:

  • Value of new versus existing customers
  • Product category margins
  • Offering temporary incentives with a new product launch
  • Cost per lead


#4 Determine attribution.

For affiliate marketing to work well, you need to be able to analyze the path the consumer took to buy. This can involve several touch points. Three main ones are Introduction (the first touch point), Assist (middle touch point) and Closer (the last click to purchase). A blogger who mentions the value of your product may be an introducer. Then, a website that offers product-to-product comparison might be the prospect’s next stop before they make a purchase decision.

By understanding the what, where, when, and why of each channel, you can more effectively value each affiliate’s effort. Impact Radius uses the example of the wasteful closer to illustrate the importance of understanding fair share of attribution. A partner might get the customer to shop for an item, put it in cart, and …well, then that shopper goes to look for a coupon. Now, the coupon site is the last partner to refer that sale. But, really, all they did was erode the retailer’s profit — the person may have purchased otherwise — so the attribution commission would reflect both parties’ roles in the buyer’s journey.


#5 Produce targeted content.

 Use the research you’ve done to identify your target customer and the best affiliates for your program to ensure that you’re providing content suitable to that affiliate. You’ll need to determine the content requirement for different publishers, and develop creative content which suits that environment.

 There are several different types of affiliate sites. These include:

  • Incentive sites – Easily the most popular as they offer coupons or promo codes for customers when they are looking for a deal.
  • Content sites – These offer articles and columns which monetize the affiliation relationship through banners, links and even sponsored content. Bloggers can fall under this category as they too will use banners or include links in their posts.
  • Comparison shopping sites rely heavily on datafeeds and let users search millions of products easily.

Considering just these three, it’s easy to imagine how the creative content would vary. Incentive sites, for instance, will have little room for text and will need to compel the audience to take advantage of a deal. But a banner ad on a blogger’s site might be more informative with product logos and up-to-date pricing.


#6 Prepare Your Website for Affiliate Traffic.

Putting someone in charge of affiliate marketing, and building up a great program, won’t do much good if the prospects sent to your site struggle with navigating or purchasing on your site. Before launching a full-fledged affiliate program, be sure that you’ve optimized your site for conversion. This can include:

  • Simplifying navigation
  • Making the site mobile-friendly
  • Shortening forms to be user-friendly
  • Making the Call-to-Action stand out
  • Streamlining page load time
  • Testing landing page design
  • Editing content to communicate clearly and concisely
  • Revamping site for an attractive overall design



Learn more about optimizing your eCommerce site for managing affiliate marketing.


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By Thinkwrap Commerce

Tags: B2C, Latest Trends, Marketing