So you've made the exciting decision to launch an affiliate program — kudos to you! Embarking on this journey is a significant step, but like any other aspect of your business, it demands a well-thought-out strategy. Why? A well-executed affiliate marketing strategy isn't just a growth hack, it's a game-changer that can exponentially expand your reach, enhance customer loyalty, and elevate your revenue and passive income. Intrigued? You should be.
In this article, we’ll show you everything you need to know about creating a winning affiliate marketing strategy for your SaaS company and key concepts and best practices to keep in mind. It’s time to bring those affiliates on board!
Let’s get started!
What is Affiliate Marketing Strategy for SaaS: Unpacking the Essentials
Affiliate marketing takes time, but with the right strategy, it can scale your SaaS business faster, with little or no money. Before we delve into the nuts and bolts of creating an actionable affiliate digital marketing strategy, let's clarify what we mean by an affiliate marketing strategy specifically designed for B2B SaaS businesses.
An affiliate marketing strategy is essentially your plan for how you'll use partnerships to achieve specific business objectives. You collaborate with organizations or individuals — known as affiliates — who promote your software to their audience. In return for its efforts, an affiliate earns a commission based on actions like sales or sign-ups.
Who Can Benefit from a SaaS Affiliate Marketing Strategy?
If you're an affiliate marketer, partnership manager, CMO, Head of Marketing or SaaS business leader eyeing growth, an affiliate digital marketing strategy is not just a "nice-to-have" — it's close to being a necessity. Whether your goals are to attract more users, convert free trials to paying customers, or simply enhance your affiliate revenue, an affiliate program could be your secret weapon.
Why is affiliate marketing so valuable for SaaS businesses in particular? Well, customer acquisition in the SaaS world can get pretty expensive. Between marketing campaigns, pay-per-click ads, content marketing, and other traditional approaches, the costs add up quickly. That's where affiliate marketing comes in. It's a more cost-effective way to bring in new customers, as your affiliates essentially do the heavy lifting of digital marketing and promotion for you. They introduce your SaaS solutions to their audiences, acting like extensions of your own marketing team but without fixed costs.
So, if you're still wondering whether an affiliate marketing strategy is right for your SaaS business - it’s like having an extra sales team that only gets paid when they make a sale — what's not to like about that?
What are the advantages of an affiliate marketing strategy? 14 key benefits
From driving cost-effective customer acquisition to scaling your reach and revenue, a well-structured affiliate marketing strategy can be your gateway to robust, sustainable growth. Below, let’s dive into the specific advantages you can expect from implementing a B2B SaaS affiliate marketing strategy.
#1 Revenue growth (MRR and ARR)
Affiliate marketing can significantly contribute to revenue growth, both in terms of Monthly Recurring Revenue (MRR) and Annual Recurring Revenue (ARR). How does this work? Affiliates are incentivized to consistently drive high-quality traffic that converts into paying customers. These conversions can lead to subscriptions or other forms of recurring revenue, thereby boosting your MRR and ARR figures. Because affiliates are skilled at optimizing their campaigns for conversion, they often generate more stable and reliable revenue streams. This stability in income allows businesses to forecast revenue more accurately and plan for future growth more effectively.
#2 Lower customer acquisition cost (CAC)
Affiliate marketing often results in a lower Customer Acquisition Cost (CAC). Why? Affiliates are motivated to optimize their campaigns for higher conversion rates because they only earn affiliate income when they convert. They handle the costs and complexities of targeting, creative optimization, and customer engagement, reducing your overall CAC.
#3 Increased brand exposure
Partnering with affiliates, both individuals and businesses, allows businesses to tap into new markets and target audiences they might not have been able to reach otherwise. Effective affiliates have some sort of platform, whether it’s a social media presence, web/blog presence, email list, YouTube channel, or even an online course that works your product or service into course material.
#4 Increased credibility
When trusted influencers or industry experts promote your SaaS product, it lends credibility to your brand and helps build trust with potential customers. This social proof can be invaluable in convincing prospects to choose your solution over competitors.
As your affiliate network grows, so does your ability to reach new customers and generate revenue. The beauty of affiliate marketing is that it is inherently scalable – you can continually expand your network of partners and, in turn, your market reach without significantly increasing your marketing spend.
#6 Enhanced customer lifetime value
A well-executed B2B SaaS affiliate marketing strategy can attract high-quality leads more likely to convert and become long-term, loyal customers. These customers often have a higher lifetime value, contributing to your SaaS business’s overall success and profitability.
#7 Access to valuable data and insights
Implementing a tracking and analytics system allows you to gather valuable data on your affiliates’ performance and customer behavior. This information can help you optimize your marketing efforts, identify high-performing partners, and make data-driven decisions to drive growth.
#8 Increased speed to market
Time is money, especially in the competitive SaaS landscape. Affiliate marketing allows you to accelerate your go-to-market strategy. Your affiliates, already versed in online marketing and possessing a ready target audience, can start promoting your product the moment you launch. This can shave valuable weeks or months off your customer acquisition timeline.
#9 Reduced risk
Traditional advertising methods require upfront investment without guaranteed results. However, the performance based marketing strategy and model of affiliate marketing minimizes this risk. You pay commissions only when desired actions—such as leads or sales—are achieved, making it a less risky venture compared to other customer acquisition channels.
#10 Networking opportunities
Your relationship with affiliates isn't just transactional—it's collaborative. Many of these affiliates are influential industry players whose partnership could offer more than just customer leads. From joint-ventures to long-term collaborations, an affiliate network can become a powerful business network.
#11 Geographic expansion
Affiliates located in different regions or countries can help your product penetrate markets that are otherwise difficult to access. With affiliates familiar with local customs, language, and buyer behavior, you can ensure that your marketing messages are culturally apt and more effective.
#12 New online marketing tips
Your affiliates come from diverse backgrounds and industries. As such, they can introduce your product to new niches or market segments you hadn't considered, often crafting unique marketing angles or promotional strategies that you can adopt across other marketing channels.
#13 Content Diversification
Affiliates produce varied content — from blog posts and reviews to video demos and webinars — that can serve multiple functions. This content not only helps with customer acquisition but also enriches your content strategy, providing fresh perspectives and valuable insights that can be reused or adapted.
#14 Improved search engine optimization
High-quality, relevant backlinks are an SEO goldmine. When an authoritative website in your industry links back to you, search engines take notice. Affiliate website pages, blogs, reviews, and articles can contribute to an improved SEO profile, elevating your visibility on search engines like Google.
Who is in charge of affiliate marketing strategy?
In the early stages of a SaaS startup, the responsibility for managing the affiliate marketing strategy often falls on the shoulders of the CEO or CMO. With limited resources and a small team, these key decision-makers are usually directly involved in developing and executing the marketing strategies, affiliate partnerships included.
However, as your company scales, it's highly advisable to bring in specialized talent to manage this increasingly complex area. Hiring a dedicated Affiliate Marketer or Partnership Manager can free up your executive team to focus on broader strategic initiatives while ensuring that your affiliate marketing program gets the attention it deserves.
Affiliate marketers will not only handle the day-to-day operations but will also bring expertise in optimizing your affiliate marketing program for growth, leveraging data for decision-making, and cultivating valuable partnerships. This investment in focused human capital can significantly amplify the benefits of your affiliate marketing strategy, turning it into a robust engine for scalable growth.
Step-by-step guide on how to create an affiliate marketing strategy for your SaaS business
Now that you understand how affiliate marketing works, the benefits of an affiliate marketing strategy, and who is responsible for affiliate marketing success within the company, it's time to dive into the step-by-step process of actually building your affiliate strategy to increase affiliate sales.
Step 1: Define Objectives and KPIs
Your journey begins by asking yourself, "What do we want to accomplish here?" In the affiliate marketing world , the goals often go beyond mere customer acquisition. You're looking at upselling current clients or perhaps beefing up the Average Contract Value (ACV). Once you've sketched out those objectives, it's time to nail down the KPIs that will be your north star. Metrics like Conversion Rate, Customer Lifetime Value (CLV), Churn Rate, and ROI will serve as your guiding indicators.
Step 2: Research and Identify Your Target Audience
Who's going to love your SaaS product enough to buy it? Maybe it's enterprise decision-makers or perhaps customer success managers. Knowing your target customer profile is key. Equally important is identifying the right affiliates — those who speak to your target audience. Think industry thought leaders, niche consultancies, or even your current enterprise clients.
Step 3: Choose the Affiliate Management Platform
Ah, the crossroads: do you go with only in-house affiliate marketing set up or do you want to use the help of a third-party platform? If you opt for the latter, platforms like Reditus are tailor-made for B2B SaaS, allowing you to list your affiliate marketing program on their marketplace for free before you reach $1K MRR generated via affiliates. Besides that, you get your own landing page and easily create a new revenue stream for your SaaS.
Step 4: Structure the Commission Model
Now we're talking money. Will it be a flat fee per sale, or maybe a percentage of the ACV or Monthly Recurring Revenue (MRR)? Don't forget to set up a payment cycle — typically monthly — that aligns with your business accounting practices.
I recommend that SaaS companies allocate a percentage of the revenue from paid subscriptions generated through affiliates. This approach simplifies the upfront calculation of your Customer Acquisition Cost (CAC) and allows you to maintain control over it. To determine the optimal percentage to offer, examine your Average Revenue Per Account (ARPA) on a monthly basis and calculate the potential earnings for an affiliate. It's important for SaaS companies to recognize that affiliates are looking to establish a revenue channel for themselves. Therefore, ensure that the affiliate program is sufficiently rewarding to make their time and effort worthwhile.- Joran Hofman, founder of Reditus.
Step 5: Create Affiliate Policies and Guidelines
Before you start affiliate marketing programs and open them to the world, lay down the law. What are the eligibility criteria? Make them B2B SaaS-specific, like minimum website traffic requirements or industry-specific qualifications. Also, establish rules on marketing methods and cookie duration, which can be crucial due to longer B2B sales cycles.
Step 6: Develop Marketing Collaterals
Affiliates need ammo, so give them an arsenal of high-quality, B2B SaaS-focused marketing materials. From whitepapers to webinars, make sure it's tailored for the more sophisticated B2B audience. For example, we at Reditus have a blog where we cover all the affiliate marketing topics for B2B SaaS and a podcast to interview top experts and provide our target audience with the best insights.
Step 7: Onboard Affiliates
The stage is set; the props are ready. Now you need the actors. Headhunt potential affiliates via LinkedIn, industry events, or specialized B2B webinars. Once they're in, a detailed onboarding guide will make sure they know their roles down to the last detail. This process can be quite time-consuming and challenging. However, by using platforms like Reditus, you can gain access to their existing networks of affiliates, making recruitment and onboarding more streamlined and easier to manage.
Step 8: Create a Landing Page
Set up a dedicated landing page on your website about your affiliate program. This will help streamline affiliate recruitment and provide all essential information in one place. This page will act as the central hub for your affiliate initiative, consolidating program details, testimonials, and relevant articles, thus providing a one-stop resource for both prospective and current affiliates.
Step 9: Promote Your Affiliate Program
Time to go live! Start small with a soft launch involving a few hand-picked affiliates. Get the initial kinks worked out before you roll out the red carpet with a full-scale launch, announced via press releases, blog posts, and targeted LinkedIn ads.
Step 10: Monitor and Optimize
Launching your affiliate program is just the beginning. Now comes the crucial task of ongoing management and optimization. Consistently monitor your program's performance against a set of KPIs you established earlier. Some metrics to consider include:
- Affiliate Sign-Ups
- Conversion Rate
- Click-Through Rate (CTR)
- Average Order Value (AOV)
- Revenue Per Affiliate
- Cost Per Acquisition (CPA)
- Earnings Per Click (EPC)
- Return on Investment (ROI)
- Churn Rate
- Customer Lifetime Value (CLV)
- Traffic Sources.
Step 11: Scale and Expand
Some affiliates will naturally rise to the top. Sweeten the deal for these high-performers with bonuses or higher commissions. As your SaaS product evolves, keep your affiliates up to speed. They're your army on the ground, and as you add more weapons to your arsenal — new features, new services — make sure they know how to use them effectively.
Types of Affiliate Marketing Strategies for SaaS: The Full Spectrum
Now you know almost everything you need to know about what is affiliate marketing strategy is and how to create it. However, we also want to show to you that affiliate marketing strategies can be different depending on your expertise, your resources and your planning. So before you jump to creating your own strategy, let's journey through the different shades of affiliate marketing strategies for beginners (and not only), each with its unique strengths, to help you realize how you can transform this from just a tactic into an integral part of your business fabric.
Affiliate Referral Marketing Strategy
Imagine an existing customer so satisfied with your software that they can't help but recommend it to a colleague. In a customer-to-customer referral strategy, you incentivize such organic conversations by offering both parties a sweet deal: the current user gets a discount or additional features, and the new sign-up also enjoys a discount. It's a relationship-oriented approach, extending the circle of trust from your existing customers to potential new users. Your employees, too, are part of this ecosystem. Many SaaS companies empower their staff to refer leads, rewarding them with a commission for every successful sale. Think of this as the inner circle of your affiliate marketing partners, a framework for related affiliate marketing built on trust and shared gains. It is simply the best strategy for affiliate marketing.
Affiliate Thought-Leadership Strategy
There's more to affiliate marketing work than just links and commissions. Take tech bloggers and LinkedIn influencers, for example. These influential voices in the software and tech arena serve as arbiters of quality and innovation. Partnering with them can lend your product an air of credibility across social media platforms that ads simply can't buy. The quality content they produce about your product can become a cornerstone of your affiliate marketing business, creating an engaged audience who trusts their word.
Webinars and online events add another layer to this. By inviting industry influencers to showcase your software, you provide value to an audience eager to learn, and in return, you can offer a custom affiliate link for special sign-ups or discounts. It's a full circle of value exchange, adding layers of depth to your marketing efforts.
Affiliate Marketing Community Strategy
Ever been to a conference where people are discussing the latest SaaS tools? Or a LinkedIn group focused on industry trends? These online communities across different social media platforms are more than just chat rooms, they are the modern agora where decisions are influenced. Sharing insightful content here, complete with your unique affiliate link, can make affiliate marketing work like clockwork, generating passive income and adding tangible value to the conversation.
Let's not overlook real-world interactions. Industry events offer a fantastic venue for distributing an affiliate link or QR codes. Picture this: you sponsor an event, conduct a workshop, and everyone leaves with a brochure with your affiliate link printed. It's a perfect blend of the digital and the tangible, ensuring your affiliate marketing efforts are as comprehensive as possible.
Affiliate Marketing Content Strategy
When it comes to keeping your audience engaged, content marketing and email marketing are one of the best affiliate marketing strategies. Tutorial videos can serve dual purposes, educating your users while subtly incorporating affiliate marketing products. Comparison blog posts can do more than just contrast your features against competitors — they can direct ready-to-convert users through affiliate links.
Email strategies, such as drip campaigns triggered by user behavior like free trial sign-ups, keep the engagement going. By weaving in an affiliate link subtly, you ensure that the email provides value and adds to your affiliate income.
Affiliate Software Integration Strategy
Leverage your API to enable other software providers to integrate your service into their platforms. Offer them an affiliate commission for each customer they direct your way. By allowing other software providers to integrate your tool, you create an ecosystem where each service enhances the other, driving mutual growth.
So, whether you're just starting in SaaS or you're looking to ramp up your existing affiliate campaigns, there's a multitude of strategies to explore. The key is to align them seamlessly with your overall business goals.
Where Reditus Stands in Successful SaaS Affiliate Marketing Strategy
When it comes to building your strategy and deciding on where to find affiliate networks to promote your SaaS product, think of Reditus. Because it is an affiliate management tool made specifically for B2B SaaS companies. It can help your business to recruit new affiliates via our marketplace, helping you to grow outside of your own network. The best part - it’s free before you reach your first $1K MRR generated via affiliates. All you need to do is set up your program here and watch new affiliates and new affiliate revenue coming in.
Summary: You Are Now Ready to Get Your Affiliate Marketing Journey Started
Armed with this comprehensive guide, you're now well-prepared to leverage affiliate marketing as a powerful tool for your B2B SaaS business. From the initial stage of defining your objectives and KPIs to the more advanced steps of optimizing your affiliate systems, this article has covered it all. You've learned not just the theory, but also actionable affiliate marketing examples that can be directly applied to your strategy. Now, you understand how effectively an affiliate promotes your product, how to select the best management platform like Reditus, and how to measure success through carefully selected KPIs.
So why wait? The roadmap to create the most effective affiliate marketing strategy is right here, and it's time to take that pivotal first step.