create an affiliate program

When I speak to potential new clients, a question I usually ask is what commission are you thinking about offering to your affiliates?.

These are the most common answers:

well, (COMPETITOR NAME) is offering this, so I’m planning to match that amount

My competitors don’t have affiliate programs – I’d like to offer (LOW COMMISSION AMOUNT)

My competitors offer really generous commission rates but I can’t afford to match their insane budgets. I have no idea what to offer.

On one hand, it's great that these folks have a pulse on what their competitors are doing. Unfortunately, most program creators just take a quick look at commission and decide one of three things:

• That they can match their competitor’s commission structure – and offer the same one
• That they can’t match their competitor’s commission structure – and offer something lower
• That they can do better than their competitor’s commission structure – and offer something slightly higher

But commission is only one part of the program structure equation. Your business is completely unique to your competitors (otherwise why’d you get into business?) so your affiliate program should be unique too.

Think about it:

• If you’re offering the same thing or less, why would affiliates join your program if your competitors have a more recognizable brand name?
• If the higher commission structure you offered to one up your competitors means you can’t offer incentive bonuses to affiliates throughout the year, how will you motivate them to promote you? And what if your competitor got funding and tripled their commission rate?

I’m not saying you should ignore what competitors are doing, quite the opposite actually.  I just want to encourage you to take a more calculated approach when comparing so that you can use the uncovered information to develop a completely unique program structure and style that will attract the best affiliates for you.

Enter the Competitive Analysis

To stand apart from competitors, the crucial exercise you must do before launch is a competitive analysis. By completing this fun investigative work, you will walk away knowing how to set your program apart from competitors.

Keep in mind that when you complete this exercise, you may decide you want to offer the same commission rate as your competitors. That's okay, because you'll be filled with incredible insights that will allow you to come up with a unique angle for your program in other ways. That's the whole point.

Already have a program? If you didn't do this when you launched, I urge you to consider doing it now. I always include one in my affiliate program audits because they really help identify new growth opportunities as well as unknown weaknesses that may be stunting growth. 

What is a Competitive Analysis?

The traditional competitive analysis is done before launching a business and is basically an in-depth review of your competitors compared to your own business. It helps you understand their strengths and weaknesses to identify how you can differentiate yourself in a crowded marketplace.

Even though you may have done a competitive analysis for your business before, ours will be done through the lens of creating an affiliate program so it will be different, less time-consuming and much more fun – promise!

Ready to play detective?

First, download the free workbook by clicking the image below:

Once your workbook is downloaded, follow the step-by-step process below.

How to Perform Your Affiliate Program Competitive Analysis

Step 1 – Decide what companies you will investigate in your competitive analysis

If you only have time for the quick + dirty version, choose 2 competitors and 1 complimentary business.

In case you're wondering, the reason we're looking at non-competitors in addition to direct competitors is to help uncover non-industry specific inspiration and ideas that can help shape your program into something more unique.

Before making your selections, be sure that at least 2 of your choices have affiliate programs. 

To give you an example, let's say I sell craft supplies. I might look at the following companies in my competitive analysis:

Step 2 – Add products + pricing information for all companies including your own

This part is really straight-forward. Head to their sites and jot down information about their products and pricing. Don't feel the need to write down every product available. Just add in the product categories and price ranges that would be relevant to compare to your own products.

Going back to my craft supply business example, I would hone in on Cricut's supplies, images and accessories and skip listing their machines since I personally don't have those for sale. For pricing, I'd go through each of those categories and write down the range I see for each category (or roll it up to a total range) such as 5.99 to 99.99.

Step 3 – For companies with affiliate programs, research the following:

1. Network – The platform they use to host their program on (i.e. ShareASale)
2. Commission – How much they pay affiliates – usually a percentage per sale but could also be a flat rate per sale, a commission based on the affiliate generating leads for the company or a recurring percentage.
3. Program Action – What triggers a commission for the affiliate. Most programs use a sale action but depending on your industry you may also see companies paying for a lead, a subscription or an email.
4. Cookie Length – The period of time the affiliate is eligible for a commission after someone clicks on their tracking link.
5. Terms – What is allowed / not allowed when it comes to affiliate requirements and promotional methods.

Below are some promotional categories you might see when completing your research on program terms:

• Content / Niche – affiliates who promote with content (blog posts, podcasts, videos)
• Email Marketing – affiliates who promote with their email lists
• Social Networking – affiliates who promote on social media sites (i.e. Twitter, Pinterest)
• Paid Search / PPC – affiliates who promote by buying ads via Google Adwords and/or other paid search services
• Display Advertising – affiliates who promote by buying banner ads on various websites and through display networks
• Comparison / Review – affiliates who promote by doing product/brand comparisons and creating reviews
• Mobile / Tablet – affiliates who promote through their mobile app(s)
• Services / Tools – affiliates who promote through their service or tool
• Loyalty / Cashback* – affiliates who promote by offering bonuses/incentives
• Coupon / Deal* – affiliates who promote mainly with coupon codes
• Software* – affiliates who promote through their software products
• CPA / Sub-Affiliate* – affiliates with a network of sub-affiliates that promote under their umbrella
• Social Shopping* – affiliates who promote through a visual shopping website / portal

*These promotional methods are not always accepted by program managers because of issues with fraud.

Step 4 – Do a Program S.W.O.T.

Program Strengths + Weaknesses– Think like an affiliate – what's great and not so great about these company's programs?

Here are some examples to help:

• Fast / slow application approval time
• High / low commission rate
• Dedicated / unlisted affiliate manager
• Long / short cookie length
• Large / small selection of banners and creatives
• High / low frequency of communication with affiliates
• Has / doesn't have info page

Program Opportunities– Based on the strengths + weaknesses you've discovered, can you identify any opportunities to increase the success of your program?

Program Threats– Based on the strengths + weaknesses you've discovered, are there any threats to your program's success?

For the rest, you'll need to channel your inner Sherlock Holmes and do the following:

• Google “Brand + Affiliate Program” and explore the top 3-5 links for information
• Google “Brand + Affiliate Program + TERM (review, experience, forum, etc.)” and explore information written by affiliates and those with experience being part of the program.
• Find the contact information of the program manager and send an email asking a bunch of questions (use an email that won't set off competitor red flags).
• You can uncover some really incredible info (such as average order value (AOV) and earnings per 100 clicks (EPC)) by joining these companies affiliate programs to see what the experience is like as an affiliate.

To do this, you'll need to apply through their affiliate network (i.e. ShareASale, LinkShare, Commission Junction) with an affiliate profile (including site URL) that won't set off any red flags for their program manager. For example, if it's a fashion company, then you'll need a fashion, beauty or similar site to be approved.

If you don't, you could ask a friend or see if you can get through by using a URL of a fashion blog you know of (though this may not work if you need to verify ownership of your blog beforehand). Typically it takes 1-2 days for approval but it's super worth it if you're struggling to gather enough info based on public information.

Step 5 – Craft Your Plan

Based on your findings, use the workbook to answer the following questions:

• How can I make my program different?
• Why will affiliates choose my program over others?
• What competitor strengths will I incorporate?
• What competitor weaknesses will I avoid?
• What opportunities can I act on?
• What threats can I minimize?
• What program action will I use?
• What commission rate will I offer?
• What cookie length will I allow?
• What promotional methods will I allow?
• What other terms and conditions will I include?

Step 6 – Celebrate

What insights did the Competitive Analysis help you uncover? Let me know in the comments below