We are all familiar with the basic concept of Affiliate Marketing. Bloggers or social media mavens sign up on your website to be affiliates for your company. They promote your product on their various channels. When people click through to your website and make a purchase, you share that profit with the affiliate. People with high profile blogs and well known social media channels can even make a living with this strategy.
But how do you make it work for you with your SaaS model? Customers purchase SaaS by the month or the annual subscription, which makes it somewhat different from more traditional storefronts like Amazon. Amazon affiliates get a flat percentage of each affiliated sale. With SaaS, affiliates expect more.
Let’s look at some of the details to help you find the right affiliate marketing program for your company.
What Do You Mean By Affiliate Marketing?
There are several programs that are referred to as affiliate marketing by casual users. Let’s be clear about what we mean.
- An affiliate program is when a user promotes your products and uses a specialized link to refer to your website. If someone makes a purchase through that specific URL, a tracking code is activated, and the user is rewarded. Affiliates may or may not be customers; often they are influencers who are solicited by the company to be spokespersons for the company.
- A referral program targets current customers who spread the word about the service to their friends or business partners. While they may be similarly rewarded with monetary compensation or free products and access, they are customers before they are spokespeople.
“Knowing which of these two you’re dealing with makes a big difference in how you structure rewards”, says Ben Givon, the CEO of Baff Networks. “Your customers may be fine with receiving benefits that deal directly with your software; in some cases, in fact, they prefer it to money. With affiliates, however, they are simply looking for financial rewards.”
How Can These Programs Work For you?
Content marketing, customized ads, and spreading branded messages are all great ways to attract the attention of your target market, but there is still no marketing method that is better than word of mouth. Customers want an assurance that your product or service is worth the money they will pay for it, especially in the modern world where attention is hard to capture.
Affiliate marketing lets industry experts give a personalized recommendation to your product, giving you an authority in the area.
How Can They Work Against You?
Not all affiliate marketing programs are created equal, especially once you’re hiring a third party company to manage your affiliate marketing program for you. When you’re choosing a company to manage your affiliate marketing, pay attention to:
- Who owns your affiliate information. You always want as much unrestricted access to your own information as possible. Some companies what to keep your affiliate information; if you then choose to work with a different management program, you will need to rebuild your lists. This is very inefficient.
- Who manages the affiliates. Some management programs view the affiliates as their customers, meaning that they market to the affiliates directly. If you want to change terms or turn these customers into your own customers at some point down the road, this can be complicated.
What Is The Best Affiliate Marketing Program For Your SaaS business?
There is no one size fits all answer to this question. There are many different options for great affiliate marketing programs that will work with many different companies. For SaaS businesses, here are a few factors to consider:
- How will commissions be offered? Some companies choose to offer a one time commission. This can be up to 100%, since after that first commission is paid, the customer can now be upsold or marketed to directly. Other companies offer a smaller fee that continues throughout the business life of the customer. This encourages both the affiliate and the company to create a longer term relationship.
- What payment models will the program work with? There are many different online payment methods these days, and most affiliate programs have a list of what programs they will work with. If the program you want doesn’t accept your payment method, then you may not be able to track your payments properly. This can invalidate the entire affiliate program.
- What is the overall cost? Most affiliate programs charge a flat fee for tracking. For smaller startups, paying that monthly fee can be prohibitive.
If you’re looking to work with an affiliate marketing program for your SaaS, make sure to do your research and find the right program for your business. Know what you’re signing up for.
Has your business benefited from affiliate marketing?