How do you start an affiliate marketing program?

It isn’t rocket science, and in this post I’d like to show you how to create your own affiliate program in 5 straightforward steps.

Having launched hundreds of affiliate programs myself, and having written books on it (one of which, in fact, is being used as a manual in MBA courses), I have recorded a video where I guide you through the entire process.

For those of you who find textual content to be easier to digest, below you may find my full walk-through the affiliate program setup…

If you want to start an affiliate program for a business, I’ve got good news for you — creating one is a fairly easy thing to do.

Let me divide the whole process of setting up an affiliate program into the key tasks that you’ll need to take care of. There are 5 chief ones to tackle:

1. Select the Platform

Many ask me for my opinion on the best affiliate network or affiliate tracking software to use. I always answer the same way: To determine what’s best for you, you want to, first, study the competitive landscape.

Research how your competitors are using affiliates to generate business. Where do they run their affiliate programs? How do they structure them? And most importantly: how successful are they at it? You’ll be able to judge of this by such signals as their affiliate program’s ranking within an affiliate network, conversion rate information, EPC (or average affiliate earnings per 100 clicks referred to the competitor), overall program’s popularity within the affiliate marketing community, and so on.

As you engage in your competitive intelligence research do not limit your analysis only to immediate competition. Study also what anyone who caters to your target audience does through affiliates and how they do it.

Once you’ve pinpointed the preferable platform or two, look into how comfortable you are with their technology and the capabilities they may equip you with.

2. Determine the Payment Terms

At this stage, you will base your decision both on the results of the competitive intelligence analysis, and on your internal intelligence of what you can afford to pay per acquisition.

It is important to understand that “payment terms” aren’t only about how much to pay your affiliates. You also want to decide whether these will be one-off or recurring payments (especially if your product is subscription-based), same or different on new vs re-engaged customers (will you pay affiliates more on bringing you new business than touching the existing customers?), will you pay based on the last touch (where the full amount goes to the last affiliate that influences the customer) or should it be handled some other way (for example, first touch attribution, or paying for “assists” along the shopping funnel, or even varying compensation based on whether it was an “introducer”, an “influencer”, or a “closer” of the conversion/transaction).

3. Put Together the Program’s Rules

Unfortunately, this vital step is being skipped way too frequently, and it’s terrible! When nothing is prohibited — everything is implicitly allowed. Are you positive that you do not want to prohibit certain affiliate activity or promotional tactics?

From “harvesting” coupons targeting your existing customers and email list subscribers to bidding on your branded terms in paid search, the list of unwanted affiliate tactics should be clearly spelled out in your program’s Terms & Conditions and in related policies. You may find an affiliate program agreement template here.

4. Create the Marketing Collateral

Next, you want to spend time creating your affiliate program’s creatives: from banners to text links, and from data feed to other “sales support tools”, make sure to get all Ts crossed and Is dotted here.

5. Implement Tracking

Finally, to start an affiliate program, you need to implement the tracking component.

More often than not, on your side, tracking will be supported by an invisible “tracking pixel” which you’ll place on your “Thank You” page — the page that the end user sees when their order is confirmed. In such setup, the affiliate click is being tracked as soon as the end user follows the unique URL that each affiliate will have, while the conversion (into a customer) is reported by that “tracking pixel” — when the loop closes and the pixel “fires” tying the referred customer to the affiliate that referred them.

Once the tracking is implemented, tested, and confirmed to work, you’re good to launch and announce your affiliate program.

Starting an affiliate program is not hard. Launching it easy too… What happens thereafter is what’s not-so-simple.

As any serious marketing campaign, every affiliate program must be managed. Don’t leave it on autopilot!

See my other videos on what affiliate program management entails, and — whether you manage it yourself or work with a specialist (such as an OPM agency like mine) — if you want grow it, do devote the time to it.