Step-by-Step Guide to Affiliate Marketing for Ecommerce Brands to Increase Shopify Sales
As a store owner, the toughest balancing act is figuring out how to increase your sales while keeping your costs low.
Many brands rely solely on paid ads to bring in new customers and sell more but that comes with a large spend, making your net profits razor thin. However, if you’re willing to play the long game, there’s one winning strategy that needs only a lean marketing budget but maximizes your conversions— affiliate marketing.
In this blog, we'll show you exactly how affiliate marketing works, how you can set up your own affiliate marketing campaign, and the best practices you can put in place to ensure this strategy maximizes your growth.
What is affiliate marketing?
Affiliate marketing is a performance-based marketing strategy where your affiliate— an influencer, a content creator, or your existing customer— promotes your products to their audience, friends, or family.
Whenever a sale is generated through them, you pay them an affiliate commission.
This commission can be a percentage of the sale or a flat fee per transaction, depending on your preferences and budget. Unlike paid ads, you have full control over your costs here and how it’s spent.
Here’s what it would look like:
- Create an affiliate program where people can sign up as affiliates, refer new customers, and promote products.
- Each new affiliate gets a unique tracking link or code. This link lets you track sales generated by each affiliate.
- Affiliates promote your brand in several ways— sharing the link with your network, or creating content about your products and nudging their audience to shop.
- When new customers click on an affiliate's link, they are taken to your store to shop. If they make a purchase, the unique link tracks that purchase as one that was referred by that affiliate.
- Choose when to pay your affiliates a commission— after each referred transaction, after 15 days, or even monthly.
Benefits of running an affiliate marketing program
Different marketing strategies cater to different objectives and costs. Affiliate marketing lets you acquire new customers, tap into the loyalty that influencer audiences have to improve retention, and have low costs.
Affiliate marketing is proven to work because of how it’s designed. 84% of people trust recommendations from family and friends. So, when affiliate marketers promote your products within their networks, their audience is more likely to trust the recommendation and thus, your brand.
Affiliate marketing is performance-based, so your costs are directly linked to whether it brings in new sales. Commissions are paid out when affiliates successfully drive sales or leads, allowing you to maximize your marketing budget and making it a lower-risk strategy.
It lets you tap into new customer bases by leveraging the audiences of your affiliates, expanding your brand's visibility, recognition, and most importantly driving conversions. Most affiliates promote through social media, websites, and blogs, enhancing your brand's presence.
Tap into niche audiences who are sure to be interested in your brand with the right affiliate partners, allowing you to widen your reach and find customers who are more likely to shop from you.
Step-by-step guide on launching an affiliate marketing program to drive more sales
Define your goals
Defining your goals is the first step to developing a successful affiliate marketing strategy. With clear and specific objectives, you can create a roadmap that will keep you focused on what matters most.
Consider using the SMART criteria— specific, measurable, achievable, relevant, and time-bound— to set your goals. So, instead of aiming to "increase sales," you can set a goal like "generate $5,000 in sales within the next three months."
When you start, you need smaller goals that get you to scale the program, like connecting with influencers and content creators, nurturing those relationships, and onboarding new affiliates.
Such clarity helps you measure progress and allows you to take actionable steps toward achieving your goals.
Choose the right products to promote
Before you start getting affiliates, you need to identify and highlight the products you want your affiliates to recommend to potential shoppers. Figuring that out is crucial for the success of your program. Products that are in high demand and have a history of selling well are likely to bring results.
You can also focus on products with a high price point to bring in orders with higher value, boosting your affiliate revenue and overall sales.
Change the rewards and the products you’re pushing within your affiliate program as different products gain popularity and trends change.
To get more insight into the kind of products that are working, listen in on how audiences are talking about products they need. You can even use tools like Google Trends and keyword research to find products in your category that have steady or increasing search interest, allowing you to understand market demand.
Select your affiliates
Next, you need to choose the right affiliates for your campaign. Your research in finding these affiliates requires you to understand who the affiliates are within your niche, the ones who recommend such products, and have an audience that matches your target customer base. This way, you can partner with people who truly complement your brand.
Pick a platform where you can find them, like Instagram, TikTok, YouTube channel, or even blogs. From there, you can research influencers in your niche. For instance, if you’re a fashion brand, you can identify lifestyle influencers, fashion creators, or even magazines.
Here are some questions you can ask yourself:
- Is their content high-quality, engaging, and educational?
- What do their engagement metrics look like?
- Does their content have a lot of likes, comments, or shares?
- If they run a blog, how much traffic does it generate?
This will help you find those who have a strong influence over their followers and have gained their audience's trust.
Tip ⛄: You can even turn your customers into affiliates because they already trust your brand and will happily refer your product to their friends and family.
Help your affiliates create valuable content
It’s all in the relationship you have with your affiliates. This is why we recommend helping them create content as they showcase your brand to their audience.
Give your affiliates more information about your products and why they should sign up for the program. Many brands send out high discounts (like at 40% off) or even freebies to influencers with a massive following or ones that they are sure will bring in a huge customer base that is likely to retain for the long term.
Besides incentivizing them, you can provide them with high-quality product images and videos. You can also develop guides to inspire content ideas and formats, such as gift guides, product reviews, or how-to tutorials, making it easier for them to produce relevant content.
Tip ⛄: The best affiliate programs also provide training to make sure your affiliates understand your brand and marketing strategies. This will help them to maintain consistency and build trust with their shared audiences.
Offer competitive commissions
To attract high-performing affiliates, two things are extremely crucial— clear payment terms and competitive commissions.
Your commission should motivate them to partner with you. The standard commission rates most merchants set are between 5% and 20%.
Since commission rates can vary widely among merchants, researching the rates set by your competitors is always a good thing to do.
If you want to make your affiliate program more enticing, aim to set your commission slightly higher than theirs. With a higher commission paid out to them, creators will have the budget to create quality content and prioritize your brand over your competitors.
Analyze your affiliate marketing results
Lastly, once your affiliate program starts running smoothly, you need to understand the effectiveness of your campaigns that drive in more affiliates and optimize your approach for better performance.
To do this, examine key metrics like sales generated by affiliates, conversion rates, and engagement levels. This will help you identify which affiliates are driving the most revenue and which marketing tactics are most effective.
Based on this data, you can make informed decisions, decide where to allocate resources, which channels and types of affiliates to focus on, and refine your affiliate program.
What features should your affiliate marketing software have?
Tracking your affiliate program manually is a challenge, especially as the number of affiliates and referrals grows. You need an affiliate marketing tool that does this for you.
When evaluating your options and figuring out the right affiliate marketing tool for you, you need to check whether the tool has specific features that you are looking for. These are 5 features your affiliate marketing app needs:
Simplified affiliate enrollment
The tool you pick should have an easy system to onboard your influencers, content creators, and affiliates onto the program.
Ensure that it gives you multiple affiliate acquisition options to pick from—a custom sign-up form or landing page, automated customer-to-affiliate conversion, a CSV list upload, or even the ability to add them manually.
Social Snowball is an affiliate marketing app that simplifies the process for you. The app lets you automatically turn every customer into an affiliate the moment they buy from you, letting you nudge more referrals from them and grow your pool of affiliates without extra effort.
Once they're in, customers have access to a personalized affiliate dashboard where they can find their unique referral links, and performance data about their sales, making sure your affiliate partners get accurate payouts.
Easy payouts
Paying out your affiliates needs to be an automated process within the software you use. You can’t be expected to manually calculate and send out the payment to every affiliate within your program.
Instead, your affiliate management tool should send out instant cash payouts to your creators as per your preferences. Here are 3 ways the tool should support you:
- Ensure that it lets you pick how often affiliates are paid out based on your preference.
- Support all types of payment methods like PayPal, direct bank transfers, Venmo, etc so that you can cater to the different needs that your affiliates have.
- Allow bulk payments. So that you can send them out to all creators as quickly as 2 clicks. Here’s how Social Snowball does it.
- Send automated email notifications whenever a payment is sent.
- Allow affiliates to track the total passive income they earned from an easy-to-access dashboard.
Here’s how to set up payments with Social Snowball ⤵️
Embed video: How To Set Up Payouts In Social Snowball - Full Tutorial
Referral tracking
Referral tracking lets you make sure fair payouts are made, attribute sales correctly, understand which campaigns are working, the kind of influencers to invest more in, and track the effectiveness of the program so that you can make data-driven decisions to optimize your strategies.
Here’s what a referral tracking dashboard should do for you so that you can get a clear picture of your affiliate program's performance:
- Automatically track using unique affiliate links and attribute them to the correct referrer.
- View real-time reports on your referral program’s performance. Allow you to break down the metrics by affiliate, product, and time. Get insights— see which referrers are driving the most sales, which offers are converting best, etc.
- Identify and flag suspicious activity, protecting your program from abuse.
- Create and customize referral offers, set different offers for different customer segments, and align everything with your business goals.
- Create a fully branded referral sign-up page to match your store, giving customers a consistent brand experience.
Integrations with popular tools
Integrations with other tools you use can open up a lot more opportunities to automate processes, run campaigns, and track performance.
Integrating with Zapier, for instance, can enable you to connect the affiliate tool with thousands of apps in just a few clicks. This helps you get automatic updates based on affiliate activities, such as adding new affiliates to email lists or customer databases.
Fanjoy, an online merchandise platform made an extra $100,000 in just 4 months by adding information about their affiliate program in the post-purchase emails they sent to customers with Social Snowball and Klaviyo integration.
Here's how it works:
When a customer buys from Fanjoy, they get a thank you email. This email also explains how they can make money by sharing Fanjoy's products. If the customer doesn't sign up right away, Fanjoy sends them a reminder email within 24 hours.
By automating this process with an integration between Social Snowball and Klaviyo, Fanjoy made it super simple for customers to become affiliates. No complicated sign-ups or delays. Just a straightforward way for happy customers to start earning commissions on referrals. Here's what their team had to say about their experience:
Avoid coupon leak
When running an affiliate program, you have to make sure your links and codes are safe. This is so that people can't use it in a way that you don't want them to, fake a sale, and drain your budget without actually getting you any sales. So the best way to go about it is using one-time links.
Social Snowball's Safelinks feature does just that. It generates unique, single-use discount codes for every customer who interacts with an influencer's link, eliminating issues such as code leaks and safeguarding your hard work. The best part? It looks and works like any other link you use.
Frequently asked questions about affiliate marketing
What are the key features of effective affiliate marketing software?
When choosing affiliate marketing software, look for these important features:
- Easy onboarding for affiliates
- Ability to turn customers into affiliates.
- Automated payouts simplify commission payments.
- Strong tracking capabilities to keep an eye on clicks, conversions, and sales in real-time.
- Integrate with email marketing tools and include workflow automation to make your processes smoother.
What strategies can increase your affiliate marketing ROI?
When you start your affiliate marketing, you need to first build your relationship with your affiliates and nurture them so that they are likely to recommend your brand and your products.
Once you do, try these strategies to maximize the ROI of your affiliate program:
- Set higher commissions for products that offer the most value, as this will motivate affiliates to drive more sales.
- Provide your affiliates with valuable resources and promotional materials to make it easier for them to market your products effectively.
- Run targeted promotions to boost conversion rates and average order values.
- Analyze your affiliate program data to identify top-performing affiliates and strategies, allowing you to refine your approach for maximum impact.
Read more about the strategies you can use to make your affiliate marketing program more effective.
Ready to set up an affiliate program that increases your sales?
While paid ads are a quicker way of acquiring new customers, it’s bound to increase your costs. Prioritizing and implementing an affiliate marketing program lets you focus on a low-cost way to acquire customers and effectively retain them for the long term. When done right, your affiliates will increase your brand’s visibility, introduce you to new audiences, and drive more engagement and conversions to your eCommerce business.
We hope this guide helped you understand how you can set up an affiliate marketing program for your brand and scale it for success. While knowing the right strategy is crucial, the tools you use to set up your affiliate program are just as important.
Social Snowball is a Shopify app that lets you set up and streamline your entire affiliate marketing strategy in one platform. The app’s extensive features give you enough flexibility to customize your program, track referrals, and manage coupons.
