As a business owner, the term affiliate agreement can feel a bit uncomfortable. When I began consulting in 2013, I turned away a lot of offers for, what felt to me, like referral agreements without enough baseline criteria. The reason? I didn't want to create a conflict of interest for myself when my clients needed referrals to other service providers. I simply wanted to refer my clients to the providers and vendors I knew were the very best fit. Likewise, my hope was that others would refer business consulting, strategic planning and leadership development clients to me, based solely on the merit of my work- and, they do.
With time, I've come to realize that affiliate agreements can benefit all parties- including clients- if they are executed well. Here are some things to know:
What is an affiliate agreement?
Simply put, an affiliate agreement is an agreement made between two parties for mutual benefit. For example, one party sends traffic or referrals to another via their marketing channels (email lists, social media accounts, customer-base, etc), and the party receiving the traffic or referrals pays for that exposure. However, I believe it's important for this definition to be expanded to included the mutual benefit of three parties- the referral channel owner, the party receiving referral, and the customer. By including customers in the definition of affiliate agreements, we open the consideration beyond monetary benefit of two business owners to consider how the agreement will benefit our customers.
What's in it for the customer?
By including customer-benefit in the affiliate agreement criteria, we're forced to think more carefully and creatively about how this agreement can and will add value for our prospect base. Consider this: rather than simply pushing out links or referrals, what type of content or resource could you provide that would make the customers' job easier, or answer a burning question they have? So, give them more than just a marketing message and leverage the opportunity to demonstrate your value and expertise with a white paper, a checklist, a tool, a webinar or an ebook the referring party can pass on in conjunction with your business offer. When prospects are given the chance to experience your value, they are more likely to move forward in the buying cycle- and feel good about your business.
What's in it for the business owners'?
As a business owner, we're always looking for ways to reach our target customers. There are seemingly endless marketing channels to choose from, but the goal is always the same- get the right message in front of the right people at the right time. At the same time, savvy business owners are always on the lookout for new ways to increase cash flow and build sustainable revenue streams. So, if business owner A's target market overlaps with business owner B's customer base and following, an affiliate agreement allows business owner A to get an offer in front of their target market, while allowing business owner B to create a new revenue stream.
What's the criteria for a successful affiliate agreement?
To create a successful, win-win-win affiliate agreement, consider the following:
Who is your target audience? At best, an affiliate agreement can provide value to all parties by getting a great message and valuable offer in front of people who will appreciate it. At worst, an affiliate agreement is viewed as noise- or worse, spam- damaging the brand image of both businesses. Be sure the interests and needs of the customer-base of both businesses are a great match.
What does the target audience value? I can't overstate enough the importance of making sure you're delivering something of value. Consider the questions they have, a problem they would like solved, or resources they may be looking for. Build your offer and content around one of those things.
What, specifically, are you willing to pay for? Affiliate agreements should be based on a well-defined marketing goal. Be clear about what you are paying for, how you will track it, how much you will pay and by when. Examples of affiliate payment triggers include clicks, subscribers, program registrations or product / service purchases.
Like any legal agreement, there are additional terms to be worked out between both business owners. And, of course, be cognizant of spam laws and general courtesy when making an offer on behalf of an affiliate to your own following.