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How Do Affiliate Programs Work?

Affiliate Marketing Influencer Campaign WellRed

With subscriptions down, media outlets have turned to alternative sources of revenue – notably, affiliate programs.

At its core, an affiliate program is a contractual agreement in which a company, brand, or retailer pays an affiliate, usually an influencer or media outlet, a flat fee or percentage commission for every sale made on the company’s website. These sales are driven through a customer clicking on a link that the affiliate has posted and promoted on their website, social media platforms, email newsletter, or elsewhere online. Alternatively, affiliates are paid for per click or per lead driven to the brand’s site. Affiliate commissions range from 5% to upwards of 30% depending on product margins, and these relationships can be managed through affiliate platforms such as ShareASale or Skimlinks.

The arrangement benefits both parties: For the brand, the influencer working as an affiliate becomes an extension of marketing to drive sales and web traffic – and the brand only pays for ‘qualified’ leads and sales. For the influencer, the affiliate agreement results in additional income.

However, not every influencer is a good fit for every brand. Child-free influencers would not be a good fit for brands geared toward children. Proud vegan influencers would not be a good fit for a meat brand.

Influencers working as affiliates are not expected to package and ship purchased products to brand customers. They do not operate as retailers; it is the brand’s responsibility to fulfill orders driven through the influencer’s audience. However, because influencers are communicating with their audiences with whom they have cultivated deep trust and rapport, affiliate arrangements inherently place them in an unofficial customer service position, from which they could either be a brand advocate or throw the brand to the wolves.

Because of this, a cornerstone of successful affiliate program is consistent communication between brands and their end-customers on product shipment updates and delays, as well as proper payouts to influencers.

Affiliate relations practitioners, operating internally on the brand-side, or at an external agency, act as mediator between the brand and the influencer. Not only do affiliate relations practitioners source new influencers to join the affiliate program, but they handle contract negotiations, make sure product samples are properly shipped to the influencer, and ensure appropriate and correct commissions are paid out to the influencer in a timely manner.

Implemented successfully, affiliate programs are a powerful driver of increased awareness and sales for a brand – at a lower cost ratio than other marketing activities. However, it is important to invest time and energy into properly maintaining such a program to ensure good relations on both sides of the affiliate arrangement.

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