Have you noticed one of the latest and growing trends in the worklife? Passive income, flexible working hours, result-based remuneration, etc.
Our today’s topic somehow evolves around this concept because we are going to write and talk about affiliate marketing. Precisely – about SaaS affiliate programs…
SaaS partner programs entice both software providers and affiliate partners for various reasons:
1) SaaS products are usually low-cost.
2) Software companies can pay high commissions because they don’t sell physical products.
3) Almost any business in the world needs this or that software for its own needs. Software to track analytics, transfer payments, manage inventory, create videos and for many other things. So SaaS affiliate marketing partners have a huge audience to convince and convert.
4) Software companies pay only when they get paid. You will never again worry about investing thousands of dollars in paid ads and receiving nothing.
5) Everyone minds his own business. Affiliate partners write and distribute copies, create videos or blog posts, introduce the software, direct users to software company’s landing page. In its turn, SaaS company is responsible for optimizing conversions and successful onboarding so the visitor becomes a paying customer.
Process is simple but would we write about it if everything was that easy? Today we are going to answer the following questions:
1) How are affiliate, influencer & referral marketing different?
2) What are common affiliate marketing scams and mistakes?
3) How to run a SaaS affiliate marketing campaign and make it profitable?
4) Which compensation structures do SaaS companies usually follow?
5) Besides finding answers to questions, you will have an opportunity to get inspired by 7 affiliate professionals. They shared their experience so you can learn from their mistakes and follow their best advice!
If sounds like this topic can help you generate more SaaS sales with less risk, we are starting!
Affiliate vs influencer vs referral marketing: How to define and differentiate them?
When your SaaS company’s user loves your product and tells his colleague or friend to use it, that’s referral marketing. Referrers are people who have subscribed to your free or paid plan and have actually used your software. In such cases, you reward both your existing user and his/her friend for the new signup.
When a famous and influential person promotes your software among his/her followers, that’s influencer marketing. In most cases, influencers get acquainted with your software and use it to distribute more genuine content around it.
You can reward them based on performance or per post. Depends on how you’d prefer to work. You should pick your influencer partners carefully because wrong choices won’t bring you qualified leads and revenue.
When marketers or bloggers promote your software and you pay them commissions per new user/lead, that’s affiliate marketing.
Note that your affiliate partners may not have used your software directly. They are not necessarily internet stars, popular figures or thought leaders. And they refer your software not to their friends but usually to people they don’t know. See the difference?
To give a new pace to our post, let’s see how our first contributor talks about SaaS affiliate partnerships:
Director of Revenue Operations at SurveySparrow, Online survey tools & market research software
“At SurveySparrow, our affiliate program is a recurring commission structure. For every conversion, the affiliate gets a 25% of the commission.
Recruitment can make or break you. Focus on Affiliates who can get you quality leads. Even if you have 1000+ affiliates, a handful of them are enough to get you to the right customers.
You should be clear about the terms & conditions while starting off the program.
When we started off we welcomed everyone into our Affiliate program. A lot of affiliates signed up for the program.
But since we didn’t have the T&C in place then, we had to accept all the content created by the partners without any quality check.
From this, we learned that quality matters and not just quantity.
Just as the customer’s life cycle journey, define your affiliate journey and milestones. Enable & encourage them to achieve it. The journey can broadly be classified as;
1. Recruitment – Identify prospective affiliate partners to onboard. Identify affiliates of competitors or relevant SaaS providers using a backlink.
2. Onboarding – Empower affiliates with resources, tools, & support. Make sure your affiliates understand the product you offer.
3. Activation – Assist your affiliate till they get their first customer for our product.
4. Engagement – Segment your affiliates into Active, Idle & Lost and then engage these segments with different activities.
They can include seasonal challenges to run, chance to earn a higher commission for a limited time, monthly newsletters, reactivation incentives, spot bonuses and enable them to achieve it.”
Here is one more quote from
Director at Trainedge Consulting
“Affiliate marketing is a great way to amplify your marketing. It creates reach, builds awareness and drives good traffic.
It’s much harder for smaller companies to attract affiliates and get them to promote their product. But most SaaS startups don’t realize that. And end up wasting their time and resources with affiliates that underperform.
I see many SaaS companies jump headlong into creating an affiliate program thinking it will bring in a large number of customers without much effort. In reality, creating collateral for affiliates, recruiting, training and motivating affiliates takes a lot of effort. Most companies that do well have dedicated resource to run it.”
Since you already know how time-consuming can be to develop a viable SaaS partner program, let’s focus on things you definitely need to know.
What are and what are not SaaS affiliate programs? Revealing the secrets of safe, genuine, and healthy cooperation
Basically anyone who has an internet connection and a will to market products can be your SaaS affiliate partner. But that doesn’t mean everyone will bring quality signups and be sincere with you. You should not let every applicant in and entitle them to promote your stuff. Here’s what Adam Hempenstall writes about affiliate partner scams and mistakes his company made:
CEO and Founder at Better Proposals, Online proposal software
“We’ve been running an affiliate program at Better Proposals for the past three years or so, using ReferralCandy to run it. Nowadays we get about 100 new signups through affiliate marketing every month.
But it took us a lot of learning to see high results from our SaaS affiliate marketing efforts. The major thing we learned is to choose our affiliates wisely and vet before accepting them.
We had cases where marketers with shady intentions promoted our app and promised features it doesn’t have. So we had to deal with the complaints.
We also had cases where they tried to scam us with fake signups, cancelled payments, etc.
Bottom line is – don’t accept just anyone. Take your time to learn more about the potential affiliate partner.”
But are you the only one who is afraid of false promises and scams? Affiliates have their fears too. That’s why now it’s your turn to eliminate suspicions that your SaaS affiliate program is not a fraud. How to do that?
#1 Don’t promise quick and huge income
Professional affiliates know that they won’t generate any sales if they sit on their hands and take no action. So instead of convincing how easy is to sell your software, better mention the average amount your current affiliates make. Otherwise, potential partners might think your “get-rich-quick” promise is too good to be true.
#2 Charging a registration fee is not a common practice
Most of the affiliate programs are free to join. And those that require initial investments aren’t regarded as reliable partners. Though you can have a look at HubSpot’s example where becoming a HubSpot partner agency is not free. Needless to say how reputable company HubSpot is. And this is a B2B partner program. But in the case of B2C offers, you’ll see fewer or no examples that trustworthy companies charge participation fees.
#3 Showcase your credibility
You may be the most honest person in the world. But what if you don’t provide any significant info about your company, product, affiliate process? What if your website, social media accounts don’t inspire to cooperate with you? Make sure you distribute quality content on what’s your software, how it works, how your SaaS affiliate program works.
If you want to learn what other mistakes SaaS companies have made during their affiliate marketing efforts, let’s read another story from Lilia Stoyanov:
CEO at Transformify, HR Software and Freelance Platform
“Despite being underestimated by many businesses, affiliate marketing is the strategy that can save you in hard times. In our case, we needed to invest a lot in product development. And there was almost no cash left for PPC or any paid marketing activities. We counted on our affiliate program and it didn’t disappoint us.
One big mistake we made was to rely on internal affiliate software. It took us time and effort to develop it internally only to realize that most affiliates prefer a third-party provider which proves that the reported results are complete and correct.
Now, Transformify Affiliate Program is managed via ShareASale. And all our affiliates are confident that the results have been validated by a third party. We have 200+ affiliates including WeWork, Roam, BitBond, etc.
Another error is to leave all marketing activities to the affiliates. What works best are regular newsletters and webinars to educate our affiliates on how to sell Transformify better. We provide sales copy, banners, keywords, etc. And there is a marketing manager who serves as a point of contact to the affiliates.”
With such valuable tips from contributors in mind, let’s see what we have prepared for you in the next section.
Do SaaS affiliate marketing programs work? (and if yes, how to make them bring revenue to your SaaS?)
If none of marketing techniques works for you, affiliate marketing won’t work either. I mean if your software is outdated or with a lot of bugs and nobody buys it, affiliates aren’t magicians. And they can’t change what you are supposed to do. Let’s have a look at 3 main scenarios that have low possibility to turn SaaS affiliate programs into success:
#1 Your software is for a narrow group: When we say “group”, it can refer to a group of people based on location, profession, form of commercial transaction (B2B/B2C), etc. It will be hard for you to find relevant affiliate partners and their chances of closing a large number of sales aren’t high either.
#2 Your sales cycle is long and prospects need consultation: If your affiliates are sending you users but you close them in 1-2 months, that won’t satisfy your partner right? They again have to wait until you make the payment.
Some affiliate tools don’t allow to pay affiliates until X amount of money is accumulated. That means an affiliate has to wait for months until he/she gets paid. But when the sign-up process is quick and easy, cooperation with an affiliate will be much more profitable.
#3 Your landing page is weak, your onboarding sucks: Your affiliate partner may bring your coveted leads and users. But is your website ready? If your landing page isn’t converting, you don’t onboard your users with the right methods, that’s your fault. And your affiliate partners will probably understand it and walk away from you.
You already know what not to do and when not to do. Now it’s time to concentrate on what needs to be done.
TIP #1: Work only with professionals who know their job
Before getting to the do’s and don’ts of your SaaS affiliate program, you should first understand: will your program be private or public?
The major pitfall of running a public program is you have less or no control over who’s promoting your stuff. You use software that “recruits” not only merchants but affiliates and even customers as well (such as Clickbank).
If your program is private, you can accept affiliates like you’d recruit a team member. You can check out their “resumes”, review their qualifications and see whether you’d like them to work with you. Here’s Johannes Rastas’s comment on the importance of choosing the right affiliate partners:
Affiliate marketing manager at Supermetrics, Reporting automation tool for PPC, SEO, social and web analytics
“I would encourage companies who are planning to launch an affiliate program for SaaS to focus their resources on recruitment.
The success of your affiliate program depends on the success of your affiliates. Think of affiliates as your business partners who contribute to building your brand.
Only a small number of your top affiliates will end up driving the majority of your affiliate sales. That’s why targeting the right segments is the most crucial aspect for being able to turn your program profitable.
Personalise your outreach messages as much as possible and be constantly on the lookout for new potential affiliates.
As you probably sell recurring monthly licenses to your software, you can attract new affiliates with recurring commissions.”
Not convinced yet? One more story from Morningscore team:
Digital Marketing Specialist at Morningscore, SEO tool
“One mistake we made is that we used to approve everyone who was applying to become an affiliate partner. At the end, only half of them were active. So we had to start deleting the ones who weren’t bringing any results.
The number one tip we would like to give is: Dare to give a huge commission to your affiliate promoters. They are creating a tremendous amount of value. And affiliate marketing for SaaS is simply the most risk-free marketing tactic you will ever find!”
TIP #2: Use professional affiliate software/services to organize & manage the process
An affiliate software will require around a $70-dollar monthly investment from you but that’s for a good reason. You won’t check links or calculate commission every month. All the data will be stored in your software so you save time, transfer payments on time and provide positive affiliate experience. For example, Tapfiliate affiliate marketing software is designed for you to track your campaign:
1) Generate personal links and coupons
2) Add and manage your brand materials
3) Reward your partners with one-time or recurring commission
4) Create tiers and reward your affiliates with performance bonuses.
There is even a company called UpFoundry that doesn’t offer an affiliate software but provides affiliate program management services. Have questions like how to recruit affiliates, how to onboard them, what platform to choose? UpFoundry’s Taylor Barr can provide you with lots of valuable resources both on his blog and Youtube.
TIP #3 Support your SaaS affiliates with marketing materials and software knowledge
That’s the minimum you can do to avoid junk leads and drive large amounts of sales.
Marketing materials include banners with brand colors and logo and offers that your affiliates should promote. Your partners may even run PPC campaigns for your software or insert your ad on their website. So you wouldn’t like your software to be presented with low-quality images and poor ad copies.
Think of your SaaS affiliates like your sales team members. The major difference is that your sales team members work from your office and receive base salary + commissions. Your affiliates like your sales reps need to know your software very well to introduce it decently. Besides that, your support team shouldn’t disregard queries from affiliates. Because interested prospects might ask specific questions your affiliate doesn’t know.
Before passing to the next section, we want to introduce another tip that you’d find quite useful. Nicholas Rubright talks about reaching out to potential affiliates and building relations with them:
Digital Marketing Specialist at SaleFreaks, Online Amazon to eBay Arbitrage Software
”At SaleFreaks, we build affiliate marketing relationships with bloggers and YouTubers that talk about dropshipping to help sell our software.
The tip I want to share is that first you need to engage with potential partners. Only after that should you reach out and try to sell them on your affiliate program.
To do this, you want to engage with them on social media or their website for about 2 weeks before contacting.
Here’s our pre-outreach engagement checklist that we go through every time before pitching our SaaS partner program:
– Follow them on their preferred social media site.
– Make 2 comments on their blog or YouTube channel.
– Do 2 social shares of their content with them tagged in the post.
– Make 2 conversational comments on something they’ve shared on social media.
Once you’ve spent 2 weeks making it through this checklist, reach out to the candidate and pitch your affiliate program!”
You can conclude that both affiliates can come to you and you can approach them. We hope that our tips on both scenarios were practical. So we move forward to “financial” issues.
How to compensate your SaaS affiliates?
The best thing promoters love about SaaS affiliate programs is that one sale can bring commissions for months to come! That’s because many SaaS companies pay commissions as long as the users continue their subscription. Let’s quickly explore how you can compensate your partners and have a look at some of the best SaaS affiliate programs:
1) Pay once for both free trials and new user generation. – Not all SaaS companies are so generous with their affiliates, but Freshbook is. They pay $5 if you refer someone to sign up to Freshbook free trial. And you get $55 if that user becomes a paying customer.
If anyone decides to join Freshbook’s affiliate program, he is expected to answer a lot of questions (see some of them below):
Key takeaway is – take your affiliate process seriously and ask for as many helpful info as you can.
2) Pay on a recurring basis. – CrazyCall offers 20% commission when the user becomes a paying customer. But that’s not all. You keep receiving the same percentage as long as he remains an active subscriber.
CrazyCall provides 24/7 support, gives access to promo materials, and allows affiliates to offer special deals. Extremely powerful ways to attract affiliates and help them generate big commissions.
3) Offer 2 (2+) partner options – Sometimes companies not only offer an affiliate program but also have different programs for different affiliates. For example, Pipedrive offer one program for “ordinary” affiliates and another one for experts:
As you can see, SaaS companies usually offer 20-30% commissions. Since percentages play a huge role in this form of marketing, let’s see what tip our next contributor shares with you:
Digital Marketing Lead at Mysupplementstore
“I’m an affiliate for a lot of SaaS services, everything from product finder analytics tools to Shopify and marketing tools.
The best thing about affiliate programs is that it’s result-based. So I’m typically paid more for driving more sales. The more money I make, the more money the owner makes.
I also like how SaaS services tend to pay higher and recurring commissions than companies selling a physical product.
I’d recommend SaaS companies be generous with their affiliates. Longer cookie times and higher commissions will attract higher quality affiliates and keep them motivated.
With a SaaS service there’s little to no cost for you to give your service to another customer. And that’s unlike an affiliate program for a physical product where there’s a hard cost to the product.
If an affiliate brings you 50 signups a month, that’s likely 50 signups you would have otherwise not gotten. So pay them and keep them doing their thing.”
What’s your experience with affiliate marketing? What tip would you like to share with other SaaS companies?
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