How to Create an Affiliate Program: Step-by-Step Guide

Ever considered an affiliate program for your business? 

Sure, it looks impressive when big brands like Amazon or eBay do it — but guess what? If Amazon can score cost-effective leads and sales with affiliate marketing, so can you. 

We’ve seen brands increase leads exponentially with affiliate marketing, mainly when they use Tapfiliate’s tracking platform. 

So, where do you begin? Keep reading for a step-by-step guide on how to launch an affiliate program that skyrockets your revenue. 

What is an Affiliate Program, and Why Do You Need One?

An affiliate program is a marketing strategy that rewards affiliates (partners) for promoting your brand’s offerings with commissions on each product sold or each lead generated. 

Some benefits of affiliate marketing programs include: 

• Cost-effectiveness and high return on investment (ROI): Affiliate programs are often more cost-effective than other marketing strategies because they don’t require an upfront investment. Instead, brands only pay once they have secured a customer lead or purchase. 
• More customer trust: Affiliate programs leverage relationships that affiliates have with a brand’s target audience. 
• Win-win for both parties: Established affiliates can generate passive income, while brands generate more leads and sales at a lower cost. 
• Scalable: Most marketing models require more investment to scale, while affiliate programs can grow exponentially without much intervention from the brand. For example, you might promote your program to existing customers and once they join as affiliates, you can see traffic and conversions rolling in as your customers take on the work of promoting your products.  

Sounds pretty sweet, right? You can experience these benefits too, once you start your own affiliate program. 

How to Create an Affiliate Program in 7 Steps

Some of the most successful companies in the world have affiliate programs, like Target, Shopify, eBay, and Amazon. 

Here’s how you can get started and join the big leagues with your own affiliate program: 

1. Define Your Goals

Most brands use marketing tactics to score more leads and sales — affiliate programs included. But before you invest in everything an affiliate program demands (partner outreach, software, research), you need to establish specific goals for your program. 

And when we say “specific,” we don’t just mean “improve sales.” The best affiliate marketing goals are more actionable and measurable — we’ll include some examples below.

Here are some common goals we see brands set (and achieve) with affiliate programs: 

More leads and sales

Example: Increase leads or revenue by 50% through the affiliate program in three months.

Your social media presence and ads only go so far. But when you partner with affiliates with audiences in your industry, you open up new potential to gather new leads. 

All of a sudden, your website traffic increase and you receive more signups to your newsletter as a result of your affiliate program. These result in quality leads that might not make a purchase immediately, but build your potential customer base down the line. 

And once you nurture the leads your affiliates bring you, they can turn into new customers and more revenue for your business. 

Higher average order value (AOV)

Example: Increase AOV by 20% within one year

Ecommerce businesses, we’re talking to you. Shopify says gentle upselling that resembles a friend’s recommendation could help you achieve higher order values. A customer might order more products with recommendations from your trusted affiliate. 

Higher customer retention rates and repeat customers

Example: Increase repeat customers by 60% in the next seven months

Ever had a customer subscribe to your SaaS just to cancel their membership a year later? Or perhaps your ecommerce brand saw one purchase from a customer and never heard from them again. 

You’re grateful for the sales, but wish you could convince those customers to keep buying. This is called customer loyalty, when customers remain loyal to your brand and make multiple purchases throughout their time interacting with their brand. 

Affiliates help boost brand awareness and trust, which means they might be able to more effectively appeal to a past customer than you were able to. 

For example, a past customer might be reminded of your brand after seeing an affiliate promote your products on their Instagram story. Pair that with a discount code, and boom, you have turned a stale customer into a repeat customer!

More customer trust and brand awareness

Example: Increase customer satisfaction by 25% by the end of 2025.

Let’s say your brand recently experienced some sort of scandal that hurt your reputation with your customers. Without that previous trust, they won’t buy as much from your brand. Of course, sometimes trust doesn’t have to be absent from a significant scandal. You might just not have enough brand awareness for new customers to trust you enough to buy. 

Affiliate programs help boost awareness and trust by backing up your brand with a trusted player in your industry. If a member of your audience has never heard of you, they might not buy right away. But if they see your product in a roundup of best products for X from a trusted media publisher? They might see you differently and be more trusting enough to buy. 

More productivity and efficiency

Example: Improve marketing budget ROI by 50% in four months

How well does your marketing budget work for you? You might spend $1,000 monthly on search engine optimization or pay-per-click (PPC) ads for $1,500 in new sales — not bad. But with affiliate marketing, you don’t have to spend anything upfront until you make a sale. 

Remember, you get to choose your affiliate commissions, which makes your marketing budget more efficient since you can be sure there is zero wasted ad spend.

You won’t spend a dime until you gain a dollar (if your percentage-based commission is 10%, that is). 

2. Choose the Right Affiliate Marketing Software

We just discussed some examples of affiliate program goals — but how do you know if you’ve actually reached them? You might be able to track sales and ROI from one or two affiliates, but it becomes harder when your program exponentially grows and you now have 20 or 200 affiliates. 

The most efficient way to measure affiliate performance is with an affiliate platform. This is a subscription-based tracking tool that helps you: 

• Generate affiliate links: You can share these trackable links with your affiliates so that you can attribute new customers and sales to them as your program progresses. 
• Create customizable reports: Dive into the nitty-gritty of metrics with reports that compare affiliate performance, product sales, channel-specific metrics, and more. 
• Track daily or historical performance: Most affiliate tracking tools have dashboards that show affiliate sales, total sales amounts, and new leads or customers within your chosen time periods. 

3. Design Your Affiliate Program Commission Structure

Time to crunch some numbers. How much of your product price are you willing to part with? Or, more importantly, how much can you comfortably share in a commission without sacrificing your ROI or operational efficiency?

You might get support from your finance department to visualize commission rates that work for your brand. But it’s not just about a single numerical value — commissions have multiple structures, too. 

For example, Tapfiliate’s flexible commissions give you plenty of options to pay your affiliates, including: 

• Flat-fee commissions: This is the most common commission structure, in which you pay a flat fee or dollar amount for every new lead or conversion that your affiliate brings to your brand. 
• Percentage-based commissions: You might offer a 10%, 20%, or 30% commission for every sale, depending on your business model and revenue goals. Tapfiliate also lets you customize different rates for different affiliates. 
• Recurring commissions: These commissions are paid out every month, which suits subscription-based and SaaS brands well. Plus, they act as quite the incentive for affiliates to bring you new leads. 
• Lifetime commissions: This structure awards affiliates for every purchase attributed to a customer they brought you. It incentivizes them to promote your brand and build loyalty across their audience base. 
• Product-specific commissions: These commissions might differ from your regular structure because they cater to a specific product category or individual products. For example, you might offer higher commissions to affiliates who sell a specific product to meet another business goal, like selling off excess inventory or promoting a product on sale. 

Finally, you’ll need to figure out how to engage and retain high-quality affiliates within your program. One way Tapfiliate helps you do this is through tiered commissions and performance-based increases, where you can automate a commission increase once an affiliate reaches a specific milestone or number of sales. 

4. Create Compelling Promotional Materials

Promotional materials help market your product offerings to your target audience. Your affiliates, who may be social media influencers or web publishers, might have their own strategy for promoting things on their marketing channels. 

But if you want more control over how they market your brand, you’ll need to share your own materials with them. This might look like social media infographics with your brand’s logo in the corner, or email marketing templates that reflect your brand values while promoting limited-time offers. 

Tapfiliate offers a feature where you can create and share branded assets with your affiliates. Not only does this help you maintain your brand image, but it also saves your affiliates time in their process and engages them. You can learn more about these features on our pricing page, under “assets management.”

5. Recruit Affiliates

Now, it’s time to find affiliate partners that most resonate with your audience. Here are some common partner recruitment strategies we recommend for a successful affiliate program: 

• Reach out to industry players: Notice any prominent publishers or influencers in your niche? You might reach out to them directly to start promoting your products in exchange for a commission. 
• Start with existing customers: Who likes your products better than the people who buy them? Tapfiliate offers an automated customer referral program where you can automate invitations for affiliate signups to customers after they purchase a product. 
• Browse directories on affiliate networks: Impact and Rakuten are affiliate networks that help link brands to potential affiliates.

Once your affiliate program’s wheels start turning? You’ll need to measure how far they go.

6. Track and Manage Your Program

You can’t improve your affiliate program without a clear understanding of its performance. That’s why most tracking tools have an affiliate dashboard to give you a bird’s eye view of sales, revenue, and traffic from your affiliates. 

But you’ll want to dive deeper into metrics with reporting dashboards from tracking software. Here, you can assess individual affiliate performance and compare them, as well as filter unique views based on products, channels, time periods, and specific affiliate marketing campaigns. 

7. Optimize and Scale Your Program

With detailed insights from your reports, you can better manage and optimize your program. 

For example, you might see one affiliate hasn’t brought you a lead in months — and remove them from your program. Or, you might notice stronger performance from affiliates who use Facebook and encourage others to do the same. 

Tapfiliate’s scaled subscriptions help you scale your program with:

• Higher capacity for conversion tracking
• White-labeled features for affiliate portals for better brand consistency
• Multi-level marketing to leverage your affiliates’ networks to grow your program and find sub-affiliate

Common Mistakes to Avoid

Some affiliate programs don’t bring results that business owners crave — here’s why: 

1. Poor choices of affiliate partners

Some affiliate tracking tools allow you to recruit partners automatically. 

While you can set the approval criteria in this method, some brands make it too easy to join their programs. The result ends up being too many poorly qualified affiliates that harm your brand’s reputation in the worst case, or simply don’t generate enough leads or conversions to make your program effective. 

You might decide to manually approve affiliate applications to ensure you’re getting the right partners. Here are some approval criteria you might consider: 

• Experience promoting similar products: See if they’re well-versed in creating videos, articles, or social media posts that effectively market similar products to your brand’s. 
• Evidence of a relevant following: Look at their social media channels to ensure they actually have people in your target audience following them. 
• Reputable website: Some content creators have websites with shady marketing practices that could turn off your target audience. For example, a website with a million ad pop-ups might look less reputable. 

Inconsistent tracking

Accurate tracking is essential to assess your affiliate program’s performance. 

Some brands make the mistake of setting and forgetting their affiliate program structure, not investing in tracking software, or simply avoiding the data analysis that’s so vital to improve and optimize performance. 

Not appreciating your affiliates

Most industries have a lot of competition for customers, but the same goes for affiliates. If you don’t reward valuable affiliates for their hard work, they might abandon your affiliate program and flock to competitors. 

Show your appreciation with performance rewards, engaging communication and onboarding, and customizable commissions that increase with their performance. 

Numbers from Tapfiliate Case Studies

As an affiliate tracking software, we’ve seen countless brands see remarkable results with their affiliate programs. Here are some examples: 

Optmyzr: PPC Management Software

Optmyzr struggled scaling their own affiliate program because most software didn’t accommodate their strict affiliate recruitment structure. Plus, they felt overwhelmed tracking affiliate conversions that kept recurring, based on their subscription model. 

Once they partnered with Tapfiliate, Optmyzr saved 10-20 labor hours in their marketing workflow and scaled their program to reach more affiliates and customers.

Enpal: Solar System Rental Company

Enpal tried launching an affiliate program back in 2020, but struggled with the high costs and rigid protocols of most affiliate networks. The company wanted a more flexible, affordable solution, so they partnered with Tapfiliate. 

From there, Enpal’s program began to scale tremendously, and an additional 200 partners were recruited with help from Tapfiliate’s automated customer referral program. Additionally, our reports project an average 10% increase in leads each year that Enpal will see through our partnership. 

MDHearingAid: Affordable Hearing Aid Provider

MDHearingAid sees most customer conversions by phone, which is why they partnered with Tapfiliate to better track performance. Our REST API helped them establish a tracking method that they struggled to implement with other tools so that they could track phone call conversions. 

Since then, they have seen the highest conversion rate in their company history, 17.6%—a 40% increase. In addition, they were able to recruit new affiliate marketers more effectively, a significant 100% increase. 

See more incredible results from our clients on our case study page!

Launch Your Affiliate Program Today with Tapfiliate!

Ready to start raking in revenue with an affiliate program? Now that you know the steps, you’re ready to get started. Our advice? Choose an affiliate software that’s affordable, reliable, and scalable with your program. 

Tapfiliate is a great option for brands in the ecommerce, SaaS, and dropshipping niches. It offers real-time tracking, premium customer support, and affordable subscription pricing. 

Ready to launch an affiliate program in a few steps? Tapfiliate can help. Start our free 14-day trial today!