Happy Sunday, and more importantly, Happy Mother's Day to all the amazing mothers today. In 2013 I met Manoj Bhargava, who said there is NO such MBA program, training program, or course that can teach you better management than a mother could. So to all the moms who consistently put the people around them before themselves, we love and appreciate you so much! 🤗❤️
One of my favorite brands, 21 Seeds, celebrates the "break" moms get between their "day job" and their "night shift" aka taking care of the kids. If you want to give your mom the treat of an incredibly smooth, sippable, and fruit-infused tequila, try 21 Seeds here: Shop 21 Seeds
Today, I wanted to chat all about a topic that usually never gets much love in this industry, sometimes because it's perceived as scammy, or because it's not an easy channel to set up in the first place: affiliate marketing.
It's one of the hardest channels to get to a point where it's truly cruising on its own, mostly because it’s very relationship-based and requires a lot of communication to external affiliate partners. However, once it’s humming, it’s revenue you can rely on, no matter what's going on with Facebook CPMs, pixel issues, or iOS tracking issues (read: invest in getting this done right).
Affiliate marketing isn't a new concept by any means, but the internet did help to accelerate the practice. In 1989, a man named William Tobin patented (https://patents.google.com/patent/US6141666) the concept of affiliate marketing. Since then, Amazon, along with a couple of other companies, drove the innovation in affiliate to bring us here today.
For DTC brands, affiliate marketing is great for macro-ROAS balancing, in addition to driving awareness for your brand. When you spend over 50% of your AOV acquiring a single customer, the 10% of revenue affiliate charges help increase your overall ROAS and keep your CFO happy. The funny part is at year-end when the CFO asks why we can't cut all paid media and only run affiliate channels! 😂.
From a software perspective, I highly recommend getting set up with Refersion to power your affiliate marketing. One of my close friends, Raj Nijjer, has now become the CMO there and after asking him to put together an offer for my newsletter that's more cost-effective than any other platform, he came through! Click here to check out the special pricing!
There are four different buckets I like to categorize affiliates into, as they all have different ways to get compensated, and sometimes different levels of pay too.
Coupon Sites
Coupon sites are the high-volume, low-quality sites you want to make sure have their own designated code. I'm not talking about the industry tragedy, known as the Honey browser extension, but rather sites like RetailMeNot or Savings dot com. These sites sign up for your affiliate program and begin crowdsourcing coupons from users unless you give them a coupon of your own, which I highly recommend.
While these are the lowest quality sites, they do have incredible SEO and will end up taking credit for a good amount of purchases. Make sure that when you set the commission to these coupon sites, you specifically go into their profiles and keep a lower commission rate. You don't want to be paying a coupon site the same amount of traffic as a high-quality publisher who's finding the traffic for you. People usually get to coupon sites once they already know they're buying, and are about to make the purchase, which is probably because of the advertising you've done yourself.
Normal Affiliate Sites:
With "normal affiliates" you can expect to receive good quality customers, traffic, and expect to pay them fairly (10-12%). These range from online marketplaces, to earned media mentions, to "offer" sections of your credit card portal.
You want to make sure you're registered with Skimlinks as a starter. They quietly live inside the CMS of many internet publishers (BuzzFeed, Refinery29, etc.). When they tag your brand, they earn a commission, which also, in turn, makes them more incentivized to write about your products. Another great one to look into is Cartera, owned by Rakuten. They power the offers you see in your customer portal as a Chase credit card customer or an American Express customer. One last one here, with Bitcoin, is Lolli. You can incentivize customers to get cashback in the form of Bitcoin. These platforms place high-quality customers with offers they find to be most interesting, based on their spending habits.
Ambassadors:
These are the most fun to work with and ideally come in through your social media team/person. These are creators, influencers, bloggers, vloggers, or "influencers" who have a following interested in what they use, consume, or purchase. Having an ambassador program, living on top of the affiliate platform gives them the ability to earn money back from anything they push.
This works incredibly well for two types of products:
- High AOV products (ideally $150+ per purchase)
- High consumption products
If you want to set up a creative ambassador program, you should have an understanding with your influencers around a content cadence, bonuses, how they can earn higher tiers of commission, etc. Sometimes, depending on the following, this could mean you pay a flat fee, or keep a brand's link in their bio, like this:
Premium Affiliate:
These are your high-quality affiliates. They will usually require some kind of flat fee, in addition to a commission, or they'll simply demand a higher commission structure (sometimes 25-40%, instead of 10%). You typically don't find these on marketplaces, but you can reach out directly and get deals set up.
Companies like RewardStyle have created their own ecosystems to manage the monetization of bloggers/creators with high reach. In most cases, they'll still end net-positive for brands, driving online and retail sales, but you won't squeeze in like a coupon site without paying anything. Another example of a strong affiliate placement is with a media company, The Skimm. You are usually given the ability to pay $35,000 OR 12% of revenue, whichever is greater by the end of the campaign (usually 2 weeks from the email send).
While it sounds expensive, if you have the brand awareness, demand, and AOV to support it, you could be getting a steal of a deal!
One last idea:
One thing I'm surprised more brands don't do is generate affiliate revenue of their own. Let's say you're selling sheets at Brooklinen. Why isn't there a post-purchase email with all of Brooklinen's favorite: mattress, standing desk, lamp, sleep aids, etc.?
It does two very simple things: creates fun content for someone who's just shown intention to better a part of their sleep, and it makes money!
Onto some fun stuff...
Software/App of the Week:
Refersion — Performance marketing for influencers, ambassadors, and affiliates.
eCommerce is sky-rocketing and brands are spending an ungodly amount of money on Facebook/Instagram ads — about 40% of every VC dollar raised, to be exact. Enter, Refersion.
Refersion provides a more cost-effective way to build your customer base, fueled by influencers, brand advocates, ambassadors, and premium publishers. With all our clients at Sharma Brands, we always leverage the power of Refersion's plug & play performance marketing campaigns. Why? It converts!
Grow your influencer network, drive conversions, increase brand revenue, and compensate (read: incentivize) publishers who want to write about your brand, all from a single, centralized platform.
Sign up for Refersion today, and get the Sharma Brands special offer (nice pricing discount) for my newsletter subscribers — click here to unlock the offer.
Brand of the Week:
Cuyana — A premium women's fashion brand.
Cuyana was started by two women, Shilpa and Karla, who wanted to create a global design house that inspires intentional buying. All their materials are ethically sourced, put money into economies around the world, and are designed to last for years. Transparently, we worked with the Cuyana team last year, and when I tell you their products are made to last, they're not kidding.
Get the women in your life the gift of sustainable, ethical, and beautiful fashion with Cuyana. Shop here.
A couple of other notes for this week's newsletter:
- BARCODE before sleep gives you a higher than average Whoop recovery (lower resting heart rate, higher heart rate variability). Try it here: DrinkBarcode.com
- Andrew Foxwell (I mentioned his course last week) just launched a new course. I have known Andrew's work for years and he's one of the best. Trust me, I'm also VERY skeptical of any kind of courses too, but Andrew is legit.
- Route (post-purchase tracking/delivery support) is giving merchants on my newsletter list $100 for 10 minutes and take a demo with them. I highly recommend taking the demo and seeing if it's a good fit for you. We use Route across all our clients and it's increased profits by ~11%, increased customer engagement by ~120%, and decreased the "where's my order" message by ~50%. Schedule the demo, here.
- Western Rise's X Cotton Tee is finally back in stock! These are the BEST workout t-shirts, hands down. I highly recommend trying one for free — click here.
That's all for today! I hope you enjoyed your Mother's Day as well as your weekend as a whole. Get those 9 hours of sleep tonight (hopefully on an Eight Sleep bed) and have an incredible upcoming week!