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Small Business Guide to Setting up a New Affiliate Marketing Program

Affiliate marketing is a must-do if you haven’t already started. Affiliate marketing was born out of the simple idea that if another website delivers you a visitor and that visitor becomes a client of yours, then you should reward the other website by giving them a tiny piece of the pie.

The fundamentals of affiliate marketing haven’t changed, but it has grown more complicated. There are many ways in which you may pay a site to promote your company to its users, but the most common is by paying a fee depending on your business profitability and margins.

For those of you who are just getting started with affiliate marketing, I’ll go over a few points to keep in mind:
  1. Your company’s finest commission/reward structure
  2. Networks that have the best affiliate base have e.g. the kind of affiliates they recruit and the type of affiliates they have.
  3. In what ways can you be seen on the most important affiliate marketing websites and via the affiliate marketing network?
  4.  Making fresh promos and reward programs to get affiliates to promote you above your competition is the key.

Deciding on how to reward your business’s affiliates. The first item to consider is the expense of acquiring new customers, such as advertising. Recruiting 100 new customers costs you £50 if you spend £5000 on marketing in a month and bring in 100 clients. Calculate the amount of commission you may pay your affiliates by comparing this to your client’s lifetime value.

The following is a simple example of how you may go about calculating this: An individual customer’s average lifetime profit is equal to their customer’s lifetime value.

For calculating a customer’s lifetime value, it may be better to take a group of clients recruited within a month and follow their spending over a few years. You may lose some customers, but others you will retain, so you need a substantial sample size for the estimate to be meaningful.


In June 2008, 1,000 new clients signed up. You have a client lifetime value of 1,000 GBP since they spent an additional 1,000,000 GBP in the subsequent two years.


There were 700,000 GBP in sales costs.

Fixed expenses for the company were GBP 100,000.

80,000 GBP was spent on variable business expenses.

Over two years, these 1,000 consumers made a total profit of 120,000 GBP or 120 GBP per client. In the end, you may compare the lifetime value of each client to the cost of acquiring a new business customer, and then evaluate which affiliate marketing channels are the most profitable for a certain product or service.

Anyway, to avoid deviating too much from the topic at hand, based on this amount, you may then figure out how much money you’re willing to spend on affiliate marketing per consumer.

To break even on each client, it is necessary to spend 120 GBP, but because you now know this is the cost per customer acquisition, it is possible to spend 60 GBP per acquired customer without incurring a loss. The average order size may be calculated by dividing total revenue by the total number of orders placed by those 1,000 clients over two years.

Passive income affiliate marketing:

In this case, the average order size would be 250GBP if the average number of orders was based on this calculation, you can expect to earn a commission of slightly less than 25% for new customers who spend £60. When it comes to new consumers, you may either do one of two things:

If you assume that one in every four clients is a new one, you may pay a commission of up to 6 percent on all purchases.

In the case of new business, set a higher commission rate (say, 10 percent) and a lower one (5 percent) for all other orders (although you will need to have the backend website functionality available to track different customers segments).

In addition to the payment to the affiliate, you must also account for network costs. This represents, as a general rule, 25% to 35% of the commissions given to affiliates. A network charge of roughly £300 per month must be taken into account when calculating commissions for your affiliates, so this must be taken into account when deciding commission levels.

For example, you should always set your commission levels lower than you can afford to be able to increase commissions during seasonal specials and reward high-performing affiliates with additional incentives.

What affiliate marketing network should I join? Your negotiation abilities and the prospective scale of your firm will determine how much the affiliate networks are prepared to share with you.

Describe your interest in launching an affiliate marketing program and asking for information on the pros and cons of working with each of the big networks: Commission Junction, Affiliate Future, and Clickbank (for example).

What do you want to know?

  • Last month, how many of their affiliates were responsible for a sale?
  • To be able to compare their stature and range with that of others,
  • How many affiliates are working to promote the brands in your field?
  • For you to view their vertical reach,
  • How much income did your whole industry generate last month as a result of their efforts?


To see how well your vertical is doing financially, another thing to consider is how much of the total income is generated by the top five affiliates (assuming that information is available). How many long-tail or small affiliate marketing opportunities are there?

  • In the last month, how many new affiliates were brought on board?
  • To assess their level of growth and dynamism.
  • Last month, they brought in how many new vendors?
  • In the same vein, do they have an arrogant and sluggish attitude?
How to start affiliate marketing:

How many business owners from your sector are present? A solid affiliate marketing base is ready and waiting to promote you if you go with the majority (as long as they are already marketing to your rivals).

  • How many affiliates do they have, and which are the top five?
  • What are the top five largest affiliates in your field?
  • Is there a sales commission that they will charge for their services?
  • It is possible to run various commission rates on the same server.
  • Are they able to generate leads for a price per lead?
Affiliate marketing course:

What is included in their management fee? With regards to affiliate recruiting, reporting, issue solving, and industry updates, what can you anticipate from them?

The more information you can gather on each of these points, the better prepared you will be for the negotiation stage, when you may pit your arguments against one another. How much power you have and how far you can go are determined by the size of your company and the money you bring to the affiliate networks.

Be enthusiastic about your marketing and growth strategies for the networks. The more people view you as a brand that’s developing and growing, the more likely they are to go above and beyond to accommodate you.

By the time you reach this point, you’ll already know what you want, so trust your instincts and the information you’ve gathered, as well as the best price. Go with the individuals you like and trust on a personal level, but only if you can believe that they will take your company seriously and will devote time to marketing you as well.

Get noticed by the most important affiliates in your industry. A target list of affiliates is the first thing you should do after your account has been set up and is ready to start. Work with the networks to get the finest available real estate for the affiliates’ sites by ranking the affiliates on the list according to their potential.

A list of all affiliates who have made a sale for a rival of yours in the last six months should be provided to you by your affiliate network. Assuming the affiliate network makes a mistake and gives you sensitive data (unlikely); ask them to rank the affiliates in order of income generated.

For the first three months, put together a promotional strategy that will outshine the competitors. A higher percentage commission and a conversion rate that is at least as good as or better than your rivals will soon win over affiliates who are companies in their own right and are only interested in advertising the merchant who can make them the most money.

View the most effective EPC affiliates (earnings per click). The next step is to figure out how to give them a chance to make money with you. To do this, just calculate: A website’s conversion rate is multiplied by the commission rate per sale. As a rule of thumb, X

Affiliate marketing for beginners:

For the first month, make sure the affiliate network has agreed to highlight you as a featured merchant on their website, blog, Twitter, Facebook, and any other social media platform they use.

Get in touch with the other affiliates right away and introduce yourself as their support at your firm, explain your proposal, and the affiliate marketing commission rate, and explain that you have an exceptional offer for the first month that will have sky-high conversion rates. For the best affiliates, you should save some money in your promotional spending plan so that you may reward them with a unique offer for prominent placement on their site.

You’ll run into affiliates you can’t reach or who don’t respond, but don’t be discouraged; this is typical; affiliates are busy people. Once you have the top 10 onboard and are recruiting the long tail through email, then get on the phone and work your way down the list to get additional affiliates on board. Think of creative methods to capture their attention and use the network’s relationships to help you contact affiliates.

Let your network know that you’ll be making them work for their commission. Be thankful and complementary when they’re good, but beware of them becoming lazy after the initial flurry-you need to hold the pace for at least three months, and then it should get easier as some secure relationships that don’t need to much maintenance are established. Affiliates and networks alike should take note of this.

How to make money with affiliate marketing:

Promoting yourself instead of your rivals via new affiliate marketing programs will increase your affiliates’ exposure. This is a difficult problem; with no clear-cut right or incorrect answer. However, there are a few guidelines to which I would adhere:

Remember that affiliates are very busy and may not be interested in a complicated (but enjoyable) promotional concept if you come up with anything too complicated.

To keep your affiliates excited about advertising you, don’t simply give them the same old promotions every month. If they already know how it will perform on their site, they won’t be motivated to try new things for you.

If your top affiliates have a lot of interest in cushions, provide them with unique offers related to them. Utilize the data you’ve collected after each promotion to figure out what works best for which customers and how best to tailor your website to match their specific demands.

Show up to affiliate marketing events, meet people in the industry, perform favors for them, and generally have a good time since people’s impressions of you will be shaped by how they see your social and professional interactions.


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