If you’re looking to create multiple income streams for your business, starting an affiliate marketing program may be the answer you’ve been looking for. 

But a high-converting affiliate program doesn’t happen overnight. 

To create a thriving affiliate marketing program, you need a solid plan, irresistible products or services to offer, and strategic systems in place. 

Let’s take a closer look at what an affiliate marketing program is, the benefits of having one, and how you can set one up to maximize your earnings in 2024. 

What is an affiliate marketing program?

An affiliate marketing program is a commission-based program you offer to affiliate marketers or influencers. 

In your program, you’ll decide what affiliates can earn commissions or rewards. 

For instance, when a referral uses their affiliate link to purchase your item, become a lead, or visit your website, the affiliate marketer may earn a commission, discount, or gift card. One of the most popular affiliate programs is Commission Junction (also known as CJ Affiliate). 

Benefits of having an affiliate marketing program

Having an affiliate marketing program is like having a separate passive income online business. Once you have it set up, you can make money in your sleep from affiliate referrals. 

You can also build your lead list and drive more traffic to your website or landing pages. 

For example, your affiliates might generate free trial users, qualified leads to your sales pages, or paying customers.

In a business world jammed with competitors, affiliates can help alleviate some of the burden on your sales and marketing teams. Plus, you only have to pay them if they help you earn sales or complete another goal you’ve outlined in your affiliate program. 

Happy affiliates may also spread the word to other affiliate marketers, helping you widen your sales net even further. 

How to create a successful affiliate marketing program for your business

Here’s how to create your own affiliate marketing program:

Step 1: Define your affiliate marketing goals

What do you hope an affiliate marketing program can do for your business?

For example, would you like to generate more free trial users for your SaaS product? Are you looking to sell 15% more physical products every quarter? Do you want to spread the word about and secure leads for your upcoming startup? 

Defining your goals will help you plan an affiliate marketing program in line with your long-term vision.

Step 2: Choose offers for affiliates to market based on your goals

With your goals in mind, outline the specific offers you’d like your affiliate partners to focus on. 

For example, if you just launched a handcrafted leather jacket collection, you might give affiliates discount codes they can market to help you generate leather jacket sales.

Or, if you’re looking to generate leads for your online courses, you might give affiliates webinar videos and lead magnets they can use to encourage people to join your email marketing list. 

Speaking of … try to set affiliates up with some branded promotional materials so they can focus more on selling and less on creating content assets.

Here are some questions you can ask yourself to help you choose offers:

“According to my goals …

• Which digital products should my affiliates promote?
• Which physical products should my affiliates promote?
• Which services/solutions should my affiliates promote?
• What lead magnets, discount codes, or rewards should affiliates use to help our brand secure more leads, sales, or traffic?
• Consider our target audience, ROI goals, and audience’s pain points to solidify these.” 

Step 3: Decide on an affiliate commission structure

How will you reward your affiliates for helping you reach your goals?

While you can offer discount codes, gift cards, commissions (or a combo), it’s best to consider your target affiliate partners’ expectations. 

For instance, beginner affiliate marketers may be more than happy to accept a small gift card or discount code when someone uses their referral link. But established affiliate partners take generous commission rates seriously — and they’re looking to make a certain amount of affiliate income.

While the typical range for affiliate commission rate falls between five and 30%, the right rate for your business will vary on:

• How experienced are your target affiliate partners (is your program for beginners or established marketers?)
• Affiliate revenue expectations (consider polling your target partners before deciding)
• The average competitor rate in your industry
• How much you can afford to pay out 

For example, SaaS affiliates earn between 15% to 25% on average. *Join an affiliate marketing network to discover the average in your specific industry.

A good rule of thumb? Choose the lower end of your industry’s rate and slowly increase it as your affiliate partners become more successful.

It’s also important to decide:

1. How often you’ll pay affiliates.For instance, monthly commissions, real-time commissions, or quarterly commissions. 
2. How you’ll pay affiliates. For example, via direct deposit, as a credit to their affiliate marketing account, or on a card.
3. If you’ll have a minimum payout threshold.  For instance, you might expect affiliates to earn at least $100 before you send payments.
4. On a cookie duration. How much of a window will you give affiliate referrals to come through before the potential for payouts expire? *Hint: Cookie durations usually range between 30 to 90 days.

Finally, what can affiliates use to send referrals your way?

For example, if you’re looking for partners to help you secure SaaS trial users, you might instruct them to send a one-time magic link to interested prospects. This passwordless authentication method helps new users sign into their trial plans in just a few clicks, securely. 

Or, if you run an ecommerce business and need partners to help you generate more product sales, you might offer them unique URLs for each discount code they offer in their marketing campaigns. 

Step 4: Solidify onboarding details and fine print

Firm up details to give potential affiliates all of the information they need about your program — and make it simple for them to join. 

The more clear and specific your fine print is, the easier it’ll be for affiliates to decide if your program is a good match for their goals. 

Helpful and clear onboarding instructions are also crucial for encouraging faster and frictionless onboarding. You don’t want to miss out on working with a successful partner just because your instructions are hazy.

Here’s what to firm up:

• Onboarding instructions (ideally in bite-sized steps)
• Program and payment terms and conditions
• Answers to FAQs (optional)
• Affiliate Program rules

For inspiration, here’s a program layout by SoFi, a financial institution that offers commissions when affiliates refer online savings accounts, lending products, and other retail banking products:

Interested partners can be onboard in three simple steps, peruse the FAQs, and read SoFi’s official program rules, terms, and conditions. 

Details like these are also helpful training guides for anyone who inquires about your program from another channel — simply send it over.

Step 5: Create an affiliate marketing program overview page on your website

Publish your program on a separate web page on your site so you can link ‌to it whenever you need to. 

Keep it short — one page, max, to discourage high bounce rates. 

The four things your program page should mention include:

1. Your affiliate partner’s target market, i.e., “Travel professionals in the US and Canada.”
2. Instructions on how to apply 
3. The commission structure 
4. Any extra bonuses or affiliate rewards (optional but highly attractive)

Get inspired by Cruise America, a brand renowned for its RV rentals in Denver and other US cities. Its page mentions all of the above — and its travel bonus discount for partners is especially generous.

A simple page like this makes it easy to understand Cruise America’s affiliate marketing program, ideal affiliate partners who should join, and how to apply. It also helps eliminate affiliates who wouldn’t be the right match for the program. 

*Pro-Tip: Use SEO best practices so your program page can also show up in search engine results pages.

Step 6: Choose a dedicated affiliate manager and sign up for an affiliate marketing software plan

Achieve your goals faster by having an affiliate manager lead your affiliate marketing program, schedule related marketing campaigns, and track results.

This encourages potential affiliate partners to take your program seriously — and helps you learn how to reiterate your program for optimal results. For instance, your dedicated affiliate marketing manager may discover that review sites bring in the highest conversion rates. Or that digital affiliate products perform better than physical products.

You’ll also need to use an affiliate marketing platform to keep track of your affiliate marketing business transactions. 

Look for software that:

• Has key insights that help you uncover your affiliate marketing ROI, conversion rates, and paid commission per sale
• Lets you filter payouts by time period, payout method, and other details
• Helps you track affiliate marketing commissions 
• Reports your total affiliate marketing revenue 
• Helps you get started quickly and easily 
• Has an intuitive interface

Wrap up

And that’s it! 

Once you’ve worked through the steps, publish your program and join affiliate networks to get the word out. You can also hire influencers or micro-influencers to spread the word about your new program with user-generated content campaigns. 

Continue to track your program results and make adjustments as needed. 

You might also consider adding more offers to your program that affiliates can market. For instance, if your skincare line is booming with sales, consider offering discount codes on your shampoo and makeup lines, too. 

If your free trial subscriptions are increasing, but users are dropping off after trials end, consider offering affiliates commissions to book demo calls with your sales department. 

By creating a program that’s in line with your goals, attractive to target partners, and always improving, you can get one step closer to creating that passive income you’ve always dreamt of.

That’s it for now.

Here’s to your success!