How to Build and Promote Affiliate Campaigns for SaaS Companies (+Checklist)
Along with the rise of cloud computing came SaaS as the most viable software distribution model. Not only is software-as-a-service more cost-effective for organizations and individuals who depend on such technology, but it also allows for versatility and agility.
This model has also benefited the software vendors themselves. For one, they typically enjoy lower development and hosting costs.
Additionally, it allows for a recurring revenue stream. Nevertheless, this shift has also been met with new challenges, particularly in finding novel ways to promote SaaS products.
With a practically friction-free licensing and distribution method along with new trends in marketing, software vendors have become inspired to develop creative, nontraditional ways in which to promote their products.
While some have surprisingly adopted text messages practices, others have turned to the ever-reliable yet rather complex model of affiliate marketing.
Why Use Affiliate Marketing for SaaS?
Affiliate marketing offers the same considerable benefits to SaaS companies as it does to any other business.
Possibly the most significant advantage of this marketing model is rapid exposure. Having an army of marketers that are adequately incentivized to bring you paying customers allows you to gain immediate access to markets you couldn’t otherwise tap. This allows you to scale up much more quickly.
Despite the substantial growth you can gain from the strategy, affiliate marketing poses a relatively low risk to SaaS companies. Of course, the success of your campaign will depend on your payout scheme. However, affiliates typically get paid only when you do, so your exposure is minimal to none.
Although the affiliate marketing model limits your financial exposure, you still have to examine your costs and consider the advantages relative to your other options. Realistically, affiliate marketing isn’t likely to slash your customer acquisition costs. But, marketing through affiliates offers greater cost efficiency, which means every dollar you spend gets you results sooner.
How to Develop Affiliate Campaigns for SaaS
There’s really no universal template for successful affiliate campaigns. This is especially true since SaaS companies vary greatly in several ways, including price, the nature of the software, and the business model.
Nevertheless, if you’re a software vendor looking to develop an affiliate campaign, here are the general steps you need to take:
Step 1: Ensure you have a marketable product.
This might seem obvious, but many companies actually fail in this regard.
All too often, businesses turn to affiliate marketing to escape having to develop their own marketing strategies. But, remember that affiliates are not responsible for making your product marketable. They should only be around to sell products that already have a proven market.
So before engaging in affiliate marketing, make sure you’ve already tested your software and have a proven product/market fit.
Additionally, you need to have an effective sales funnel and every collateral needs to be optimized for maximum conversion. That includes your landing pages, on-boarding process, etc. Otherwise, you won’t even capture the interest of the best-performing affiliates.
Step 2: Take on the proper mindset.
Mindset doesn’t typically form part of campaign development, but it actually plays a critical role in the success of any affiliate marketing strategy. Your mindset as you go through the process of planning, developing, and executing your strategies greatly affects the level of success you can achieve through your campaigns.
Many companies — software or otherwise – mistakenly start off by figuring out the least amount of money they can pay to keep their affiliates motivated. However, taking on the mindset that paying affiliates as much as you can afford is actually the best way to keep all parties happy. You want to partner with your affiliates, not exploit them.
Step 3: Develop a competitive payout scheme.
There’s no such thing as an industry standard for compensating affiliates marketing SaaS products. It really should depend on your specific offer, your business model, your goals, your audience profile, and the type of affiliates you want to attract.
To develop a competitive payout scheme, you first need to examine your business model. How do you make your money? Is your revenue per customer recurring, one-time, or both? Based on your answer to those questions, determine how you want to compensate affiliates.
Remember that just because your revenue model is recurring, it doesn’t mean that your payout scheme should be, too. It should all depend on what you can actually afford and what will incentivize your affiliates to perform.
For this, it helps to evaluate your customer lifetime value (CLV) and churn rate, so you know whether it’s worth paying commissions heavily on the onset but keep the total recurring revenues.
Also, figure out what you’re paying your affiliates for.
Most commonly, SaaS companies pay a commission for every purchase. Technically, however, affiliate marketing allows you to pay out at every stage of the buying process. So, you can pay for leads, specific actions, or any indication of engagement.
Step 4: Determine how to recruit your affiliates.
Before you can start recruiting affiliates, you need to decide between a network or in-house affiliate model. Both definitely have their own merits, although it’s generally more prudent for SaaS companies to start with in-house affiliate marketing.
Public affiliate programs allow you to use platforms like Clickbank, ShareASale, and Commission Junction. These networks give you not only a platform on which to manage your affiliate relationships but also access to a valuable network of experienced affiliates. Despite its benefits, however, these public platforms give you limited control over who can market your software and how they choose to do it.
On the other hand, running your own affiliate program leaves you with much to figure out on your own. But, a limited, invite-only model that allows you to handpick affiliates based on their qualifications allows you complete control. Additionally, it allows you to work closely with each of your affiliates to determine ways in which you can improve your processes and collaterals for better conversions.
Step 5: Empower your affiliate marketers.
So, you’ve developed and optimized your entire affiliate marketing campaign and have even recruited a considerable number of affiliates.
Unfortunately, your work doesn’t stop there. You need to provide all the support you can so your affiliates can make sales. For starters, that means making sure your product performs and that you’re available to support the customers they bring in.
Additionally, you need to work closely with your affiliates, listen to their feedback, and continue improving your offerings. That doesn’t just involve the software itself but also all marketing collaterals that are meant to support your affiliates’ performance. That includes landing pages, on-boarding processes, external content, etc.
Lastly, make sure payouts are timely. Set a payout schedule and stick with it. Affiliates need to get paid on time and without fail. Rarely will an affiliate be loyal to a specific SaaS product, so they won’t think twice about leaving you for another software company that cares enough to pay them on time.
So, is your SaaS company ready for affiliate marketing? Review the essential steps through this SaaS affiliate campaign development checklist:
- Ensure you have a marketable product.
- Take on the proper mindset.
- Develop a competitive payout scheme.
- Determine how to recruit your affiliates.
- Empower your affiliate marketers.
Unlike adopting email or SMS marketing practices, affiliate marketing is much more involved. SaaS vendors looking to take on this marketing model need to provide continuous support to their affiliates, all while making sure they have a strong product and market fit in the first place.
Nevertheless, a carefully crafted affiliate marketing campaign can be just what a SaaS product needs to scale up, widen distribution, and make bank.