On this episode of the SaaS Boss podcast I interview Mark Thompson about affiliate marketing. Mark Thompson is the co-founder of PayKickstart.com – a SaaS that is reinventing the modern-day shopping cart and affiliate management, helping thousands of businesses and Entrepreneurs sell more, maximize customer lifetime value and automate subscription commerce.
How Mark started working with software companies
Mark has been in software for 8 years and an online entrepreneur for 10 years. He helps local businesses focus on their marketing using various strategies such as SEO, PPC, email marketing and social media.
He stumbled on the warrior forum and saw people selling products such as wordpress plugins and themes. He appreciates the concept of creating a product and being able to sell it at any time you want and as many times as you want without really having to put more time in it because it is easier to scale that type of business, so he has focused on that for the last 8 yrs.
In the last 4 years he has focused on his main business PayKickstart which is an online billing and online affiliate management platform that aims to remove the technical hurdles of running an online business.
How he created PayKickstart
It was originally supposed to be used internally to sell their own products but people kept contacting him and asking him how he was able to overcome the challenge they were experiencing so it was open to the public about 4 years ago.
I chime in on how the best part about creating a tool that solves the problem you have is that you are the prospective customer. You know how to talk about the pains you are experiencing and how your product solves them.
They usually try to automate think certain tasks that are tedious so that you can solve them with a few clicks.
Mark talks about what he loves about affiliate marketing
Affiliate marketing from the perspective of a product creator mitigates the risk of spending thousands of dollars on your offers. You can leverage other affiliates, subscribers and their community in order to generate that traffic and buzz.
One of best low hanging fruit strategies is to partner with other affiliates and give them a commission only when you make sales.
Are there any specific industries that affiliate marketing won’t be a good fit for?
Some industries are better than others, often times the larger the industry or niche is, the more opportunity there is for affiliates. The health industry is huge, supplements or fitness coaches or fitness products make it a large niche.
Self-help, music programs or teaching someone a language are large industries as well.
Online retail is quite difficult, if you were to join an Amazon affiliate program they would pay you pennies compared to a smaller boutique shop and it also depends on if the vendor has tons of traffic.
Amazon doesn’t necessarily need to rely on affiliates because they have all the traffic, back in the day they used to give better commissions because they relied on those people.
How do you assess the available opportunities and identify if it is a right fit for you?
You need to look at your competitors and see the type of affiliate programs they have. You can scroll down to the bottom of their website and find the link that says affiliate or partner program.
Find out the way their programs are structured, if they have offer incentives, their promotional marketing materials and more.
If you don’t have much authority in your space or you are just starting out you may need to increase the commission you are offering to make your affiliate program more attractive.
Are there any specific brands that come to mind that are crushing it with affiliate marketing?
Mark says Clickfunnels has done extremely well with affiliate marketing and one of the major ways they have generated such a massive audience is from their affiliates. He has also won a Jaguar car from promoting them.
The kind of sales information that is available on their website
They have about 60,000 affiliates in their marketplace and they encourage product creators or vendors to provide more information about their products so that they can generate organic affiliates who are requesting to promote their products.
When you are an affiliate you want to find products that are going to pay you well and products you believe in.
There are affiliates that promote products because they love it and there are those who do it for a living and they are looking for a high converting offer that would give them money.
He has discovered that the best kind of affiliates are those who promote your products primarily because they love it and even if you did not have an affiliate program they will still talk about it on facebook, youtube and other communites.
What is the next step after you have identified the person you are willing to share a part of your revenue with?
The next step is affiliate outreach. Try and identify people that are influencers or have an existing audience and reach out to them.
About 90% of people who want to grow an affiliate program make the mistake of thinking only about what is in it for them and not what is in for the intending affiliate.
They don’t go about it from the angle of I want to build value or I want to build a relationship with these people, rather they just tend to focus on the type of commission that is available with their program and most affiliates are turned off by that approach.
What are some tools that can help with the management of affiliates?
PayKickstart is a billing platform to manage the checkout process and it can also manage your affiliate partners. You can approve or deny and affiliate request to promote your offer. You can manage their payouts.
You can automatically pay them their commission at the point of sale specifically if they are using Paypal and they check out with Paypal you can send that affiliate their commission immediately when the customer buys.
You can also do a delayed commission where if they are buying with credit card or maybe a wire transfer or you don’t have a level of trust or relationship with the affiliate you can hang on to the funds. Their vendors usually hang on to the commission until the 14 days or 30 days refund period has cleared and then you process the commission and then it marks it in the system that it has been paid.
You can also include things like promotional email copy or banners. The affiliate can log in, grab their marketing materials which makes it easy for them to promote and keep track of all their commissions, find out what commissions have been paid and the pending commissions that are owned by the vendors.
What promotional materials should you have before reaching out to affiliate partners
Mark creates a JV or affiliate page for his product and it is a sales page but it is a sales page for the affiliate not the customer.
The affiliate sales page is meant to sell them on the reasons they should promote your product, tell them your price points, the commission structure, the value that you are providing, who it is that you serve.
From a marketing material standpoint you can provide email swipe copy so that they can take their copy, customize and share it with their list, they can also banners on their blogs or website. You can provide promotional tweets, promotional social posts to facebook groups or fan page.
If you have a one week launch or a time sensitive promotion, you can also create an affiliate contest where you track in real time who the top affiliates are, who are referring the most sales and they can see a real time leaderboard of where they are and you can throw in an incentive like the top affiliate will earn $500 or a trip to Bermuda.
Are there any success stories that you will like to share especially from early stage companies?
When his company was at an early stage they generated over $100,000 with affiliate partners within one week and at that time they has a wordpress plugin that helps you to build your email list which was sold for about $50. Affiliates contributed about 95% of the product revenue. At that time, he was not aware of sales funnels, order bumps, upselling and other ways of increasing the lifetime value of a customer.
They have someone in the fitness space who has an online fitness program that generates about 30% of their sales just from affiliate partners.
Why it is important to hold on to your existing customers?
Most online business owners and startups often ignore the importance of hanging on to their existing customers. If you can add value to your customers and make them happy, they will be the biggest ambassadors of your products and your best affiliates.
Make sure you have an amazing product or service that is adding value and solving your customer pains and challenges, you can then leverage those customers and compensate them for telling other people about it.
In your members area or wherever they are accessing your product or service, you need to make sure that it is apparent that you can join, become an affiliate and earn a commission.
A lot of SaaS companies that have significant growth and are profitable realize the importance of making their customers happy. Mark company has been able to grow substantially over the last year by reducing their churn by about 60% or 70%.
If a product is $100 a month subscription and you are offering 30% revenue sharing, would people go through such hustle for just $30 a month or is there a better way to compensate those people?
You can build a sales funnel that will compensate affiliates both in the short term and in the long term.
The affiliates can be given a 50% commission on a $300 sale and they can be given a 20% or 30% recurring commission for the life of the customer.
The smart affiliates are the ones that are focused on the recurring commission especially if churn is down and the company delivers on its promise to the customers.
Any other tips that can help in structuring commissions?
Do you have a sales funnel, do you have upsells or other opportunities to increase the customer value. Offering a $30 commission on a one-time payment for a product is often not a good enough incentive for affiliates to continuously promote your product.
You also need your sales funnel to convert well so that for example you can tell your affiliates that on average your first upsell converts at 30% so you will make more money. If you know those numbers, it will help you to structure your commissions.
It is also important to know your EPC (earnings per click) that is what a lot of affiliates look at because they want you know approximately how many dollars they will make if they send you about 100 clicks to an offer.
Any parting words?
Everyone can start with an affiliate program and it is an easy way to generate traffic, leads and sales. The risk is low and setting up an affiliate program is easy.
You can also leverage a marketplace like paykickstart where there are thousands of affiliates in the marketplace.
PayKickstart – Power your online business with the most flexible shopping cart and affiliate management platform
ClickFunnels – Marketing funnels made easy
Warrior Forum – The #1 Digital forum & Marketplace
Amazon Associates – Amazons’s affiliate marketing program