Affiliate Marketing Definition
Affiliate marketing is a type of arrangement in which a business pays commission fees to affiliates in return for marketing leads, opportunities, or customers they bring. In some cases, instead of paying for customers, businesses offer other kinds of rewards, such as free products or services.
What is the difference between affiliate and referral programs?
Affiliate programs work similarly to referral programs, but they do not include the relationship factor – an affiliate doesn't have to be a brand's customers, and they do not recommend the products to their friends and relatives but to their audience.
That's why affiliates are usually business people who have a broad network of business contacts or influencers with a large audience – bloggers, YouTubers, streamers, etc.
How to build an affiliate program step-by-step?
An affiliate program needs to be well thought out from a company perspective. Follow the next few steps while planning an affiliate program:
- Set a target for the affiliate program.
- Define an ideal customer for your products or services,
- Create an affiliate persona – based on the ideal customer persona you've created before, choose a set of features that would define an affiliate you'd most like to work with.
- Select the activities suitable for rewards – decide whether your company would award affiliates for bringing traffic, leads, sign-ups, or just for paying customers.
- Choose the rewards – a commission, free items, and so on.
- Create tiers if necessary – reward the most influential affiliates additionally.
- Set the rules of an affiliate program – decide on the affiliate cookie lifetime, create terms and conditions, and designate a decisive person for all things related to your affiliate program.
- Track the program results – take a look at the effectiveness of your affiliate program to check if it meets the expectations you've set at the beginning. Then, make changes and improvements if necessary.