How to build an affiliate marketing program

At Freshworks, we constantly experiment with our products and processes. 

The marketing function, in particular, tries to explore different ways to take our products to customers. We study how different channels work, and try to find the sweet spot for a product, at the right ROI. 

About a year ago, we tried our hand with affiliate marketing. 

An affiliate marketing program is a referral program where a referrer who directs a new customer to a company gets a percentage commission of the deal that he/she refers and the company gets new referrals.

After ironing out a lot of teething issues, we gradually but steadily built a program that now serves as one of the most important lead generation channels for Freshworks. We started small, with a program just for our flagship product, Freshdesk, and the affiliate marketing program has evolved to the stage where it is now a rich source of leads not just for Freshdesk but for all Freshworks’ products.

With thousands of affiliates on board and hundreds of leads pouring in each month, we now have a channel that not only reaches the right audience but provides the ability to scale. 

Here’s how we built the affiliate marketing program: 

We started with a pilot project on a leading affiliate marketplace.

We chose to start on an external platform before moving on to create our own infrastructure. Here’s why: 

• The technical requirements for running a program are already available

• You have the support of experienced people ready to help you

• Their marketplace offers features like bulk messaging, email newsletters, affiliate grouping, customized rewards, etc.

• It is faster and easier to find experienced affiliates because every affiliate network has its own marketplace where affiliates can find companies and companies can find new affiliates

But there are disadvantages too.

Most affiliate platforms ask for a standard fee and a commission on every transaction. This makes it expensive when transaction values are high. Also, most marketplaces enforce rigid rules and regulations, such as asking for exclusivity.

Building a community of affiliates 

The most important part of creating an affiliate program from scratch is building a community of affiliates who are ready to promote your product. There are a lot of affiliates who would sign up for the program but only a fraction (typically less than 10%) will be active affiliates. 

Having 10,000 affiliates of which 10% are active will fetch you only 5000 leads (at an average of five leads per affiliate), while 8000 affiliates of which 15% are active will fetch you 6000 leads. 

So, how you can get to the best of the best affiliates who will bring you leads?

There are three important aspects to this:

1. Source of affiliate

2. Affiliate screening process

3. Affiliate engagement

While the first two help in getting the affiliate that is most suited for your business requirements, the third one helps in improving the yield.

At Freshworks, we wanted affiliates who had experience in selling a software or those who deal with businesses that need software that helps them solve their problems. The latter actually helped us more and also tied back to the main objective of reaching the businesses when they need the product. A lot of our affiliates are people whose clients are in need of a software for solving a business problem. These clients may not be necessarily looking for a software or may not even know if there are software that caters to their business need.

Source of affiliate:

An affiliate platform has a large pool of affiliates, but when it comes to B2B, only a few will meet the cut. Hence, the source of the affiliate becomes important. The marketplace for each affiliate program is a good source to start. If you make an appealing offer, this source can also give you volume to grow.

Affiliate screening process:

Screening the leads that an affiliate brings in is an extremely important part of running an affiliate marketing program. The importance is heightened when companies operate on a ‘pay per lead’ model where companies pay affiliates a certain amount of money for each lead that is brought in. This is besides the commission percentage that they get if the lead becomes a paying customer. In such cases, the chances of them referring an unqualified lead will be higher because they get paid for each lead they refer, irrespective of how good or bad the lead is. It is likely that affiliates bring in a lot of junk leads simply to get more money. 

To handle this, companies should see to it that the affiliate provide details such as email, country, language ,and also website on which the affiliate would promote the product or service. These details would help the program manager to better understand the affiliate before deciding to accept or reject the application.

Affiliate engagement:

Most affiliates who sign up for the program consider it a secondary business. So, it is important to remind them of the rules of the program, of the reward, and of the mutual benefit that is involved. It is also important to provide support when they face issues and give them recognition when they perform well.

The community will form the foundation of a strong program. 

Companies can create different challenges or tasks that the affiliates can perform, and reward them if they complete the task. This will help in motivating them to perform better and bring in more leads, and will also act as a lever to increase the number of leads and meet targets.

The challenges could be down the funnel like getting a high-value deal for a better commission or top of the funnel like publishing content on the affiliate website with a backlink. With every affiliate profile being different there are bound to be clusters of affiliates who prefer one activity over the other. For affiliates who promote the products by listing them on their website, content becomes important while for affiliates who promote the products to their existing clients, commission value could be a control lever. 

What to watch out for:

Selecting the right platform for the affiliate program, having an appealing reward system, providing proper support to the affiliates, timely disbursement of the commissions, and building the affiliate community are some of the important steps in building an affiliate marketing program. 

And through the process, it is important to be aware of the potential threats that can dislodge the system. Here are a few things you can do to make sure the program doesn’t derail:

• Put a tracking system in place to ensure that commissions are given out correctly and on time to affiliates, especially in cases where there is a recurring commission.

• Give affiliates a manual of the entire program so they can navigate through the system easily.

• Provide affiliated with all assets, such as banners, case-studies, white-paper, etc., that they need to promote the product and online.

• Ensure that you provide them support whenever they face issues.