Read the full transcript and see the video below. See here a quick overview of things covered in the webinar:
– Direct and Indirect Marketing
– What is Affiliate Marketing
– Why should you utilize a Referral, Affiliate, or Partner Channel?
– What to keep in mind when starting with an Affiliate Marketing Channel?
– How to choose an affiliate marketing platform that fits your needs?
– How to grow your Affiliate Revenue Channel and measure success
Date: fri, Oct 14, 2022 7:08PM • 56:25
affiliate, affiliate marketing, SaaS, people, payback period, paid, tool, clients, bit, referring, question, B2B, quickly, ideal customer profile, webinar, companies, money, commission, marketing, Joran
Joran Hofman, Ermek Rysbek & hosted by Aigul
Table of contents
- Identify your Ideal Customer Profile
- Direct vs Indirect Marketing Channel
- Difference between referral, affiliate & partner channel
- Why you should use an affiliate management tool
- Affiliate Marketing Fit
- How to recruit affiliates?
- How to measure success for your Affiliate Marketing channel?
- Connect with Joran Hofman
- Questions regarding presentation
Okay, hi, everyone. It’s good to have everyone here. Today we have another webinar from Richie AI and Reditus. Let me just introduce myself, my name is Aigul, and I am a scout at Richie.ai, and today we have the founder from Reditus, Joran, and also our own founder of Richie.ai, Rysbek. I’m glad to have everyone on our webinar, which is devoted to the topic of marketing in b2b startups. So if the best way about how we can facilitate affiliate and how we can facilitate growth concerning affiliate marketing and how to use it for growth. Let me now just pass the mike to the founder of Richie.ai, Rysbek. And then we will listen to our presenter, Joran,
Ermek Rysbek 01:06
Well, Hey, everyone. Well, thank you, Joran, actually, for joining this call today. So yeah, and thanks, everyone, for being on a call. Today, we will basically say this is part of our series of webinars that we’re hosting in regards to everything marketing, for B2B SaaS, specifically around customer success for B2B SaaS and different topics around that. So we are trying to bring different experts from, basically, merchant marketing or relationship to the merchants for B2B SaaS and different topics around it. And today, we’re happy to have Joran join us. Before I introduce him, I’ll just quickly recap on what Richie.ai does. And we do basically aim at lending infrastructure for B2B SaaS platforms. And we help large and second-tier payment processors and B2B SaaS platforms. We basically launch and enable lending within their existing product offering. So today, again, I’m very happy to welcome Joran Hoffman. And then he is a founder of Reditus; it’s a European-based startup that specializes in managing and automating affiliate marketing. And in the form of a marketplace, where both the affiliates and companies that actually offer affiliate marketing, and people that would be interested in actually becoming affiliates themselves, could come together and build a successful relationship and grow the company and basically do something for themselves as well. Joran actually is, has a background in sales and customer success. An extensive background in those fields, specifically in customer success. And with that, he decided to turn into a mission of helping other companies succeed. And then his mission is built around, like facilitating and magnifying the relationship with people, between people and managing that. And that’s how his idea of ready to skim took place. So we adapt notes. Happy to pass it on to Joran. And, hear from you. How’s everything?
Joran Hofman 03:37
Thank you, Rymek, thank you for having me on the webinar series. I’m sharing my screen. I’m not going to present myself any further because you already did a good job here. I’m not going to explain what Reditus does more deeper because probably a lot of people don’t know what affiliate marketing is. So I’m not going to tell you what we do, but it’s going to be all clear in this presentation. We kind of cut it up.
We have planned an hour, but most likely, I will present for 20 to 30 minutes, and then there’s going to be time for questions. But if anybody has any questions in between, interrupt me. If something is unclear, interrupt me, and we’ll take things from there. So, as Igu mentioned, SaaS affiliate marketing and how to use it for growth. We’re going to dive all into that. And we’re going to start with the basics, and we’re kind of going to build it up all the way to how to actually measure success and go a bit deeper into a bit more advanced, so whether you’re familiar with affiliate marketing, yes or no, you’re going to be definitely learning something, today.
And if not, then you can teach me something next time. We’re going to talk about direct and indirect marketing. What are the differences? What is affiliate marketing? How does it work? When or well, maybe why, and when should you start with affiliate marketing, what to keep in mind when you start with an affiliate marketing channel and how to grow and measure success when you do. So, those are the topics we will cover in his webinar. You already did an intro about me; this was my slight, but indeed, like a big background in CS before that in sales, and the reason why I started Reditus is that I’m an affiliate marketer of around eighty SaaS tools with my other website, saleslovesmarketing.co. I’m an affiliate of around eighty SaaS tools, had a lot of challenges with the current tools on the market. And so I decided to build my own like that’s the SCID. So, we do really good for the affiliates as well, as we believe if they do well, the SaaS business does well, and in the end, we’re going to do well.
Identify your Ideal Customer Profile
That’s my intro. And I said we’re going to start with the basics. Hopefully, everybody knows this ICP ideal customer profile. Really quickly, it all starts with this right; especially for any business that wants to grow, you have an ideal customer profile. I just grabbed two screenshots, fun from the internet. Just to give an example, we fully focus on B2B SaaS companies, ten to 200 employees; we kind of looking for 10k, MRR plus, and the decision-making process, often the founder or the growth hacker, and the pain points they have, like either struggling with growth, or they seek a new revenue channel.
Or they want to have like a quicker payback period or a better LTV:CAC ratio, which both of them are going to explain also in this in this presentation. So however, if you’re going to grow your SaaS, you need to have your ICP really nailed down so you actually know who to target. And it’s going to be even more important when you go into the indirect channel, affiliate marketing because you’re going to ask somebody else to do the marketing for you. So they need to know who you’re actually looking for and what is your, again, ideal customer profile. So this is the typical one; basically, you’re doing a lot of activities, right?
Direct vs Indirect Marketing Channel
You might run cold emails, paid ads, and webinars like this. Or outreach via phone, content writing for SEO purposes, basically, anything you’re trying to do to reach your ideal customer profile. That’s probably how you run your company right now. That’s the direct channel. So basically, you are trying to reach your ideal customer profile directly. And what we’re going to talk about today is actually the indirect channel. So, as you can already see on the slide, there are people in between. So it means there will be one more layer in the market funnel where you’re providing them with information, and they have access to your ideal customer profile.
When you look at it a bit from a go-to-market plan, like when you have a direct channel, as mentioned, that could be a CEO, paid ad, outbound sales, social media, and then you have a certain strategy around that, which you all do directly. When you look at indirect, it’s going to be, of course, a bit different than you might are going to motivate your clients, you’re going to recruit affiliates, you’re going to have agencies going to promote your SaaS, you’re going to have other types of partners like influencers, or bloggers or YouTubers or maybe even tiktokers nowadays, if you’re ICP is going to be present on TikTok. So, in short, indirect is something that is a channel where somebody else is going to do the marketing for you. So with direct, even though you use different tools like Google paid ads or LinkedIn paid ads, you’re using a different tool, you still control everything yourself, you’re still setting up the ads yourself, but with indirect, somebody else is doing the marketing for you in any way possible? Why should you care about going indirect? I think we all can relate to this. Like if you’re looking for any new tool, you probably won’t want to talk to a salesperson right away.
I think including Richie and Reditus can relate to this. Like if people are going to search for a solution like ours, they’re not going to talk, first things first, to the salesperson of our company. So people are going to do research; they’re going to find the best ten affiliate marketing tools for B2B SaaS companies. They’re going to find a list. Somebody wrote a blog about that; he’s ranking high; we need to make sure that we’re actually going to be in there. So indirect is basically a channel that is going to help you to influence people during this process. So, where they’re going to do research, you actually want to make sure that you can also influence the people while they’re doing the research before they actually open up a trial, talk to your salespeople, etc.
Difference between referral, affiliate & partner channel
There’s, I guess, always a bit of, how do you say it, like people don’t understand the differences between the different channels within in our, so we kind of created this slide to make it really clear; hopefully, I’m going to talk about them one by one.
I’m going to start with the left-side referrals. So the most typical example is what Dropbox does. If I invite Emrek to Dropbox, we both get 10 gigabytes for free. I don’t have to leave Dropbox; I get a link within the app, which I can share. If he starts using products, we are both getting about 10 gigabytes for free. So, sometimes I only get benefits, or sometimes he only gets benefits. So it’s either a one or two-way channel; there’s often no money orientated into it. So it’s often product benefits. And you don’t have to leave a tool to actually get a link or see or promote basically a tool. It’s a bit harder to set up because, of course, you need to make sure that we both get those gigabytes for free or any other things you want to get for free.
When you look at affiliates, it could be one-way or two-way; at the moment, for example, our tool is only one way where it is fully money orientated. So people get a link. Once somebody starts using the tool via that link, the person who referred them will get a kickback fee. And that kickback fee can be in a certain percentage against a certain amount of months, which I’m going to explain in a second as well. Really easy to set up because there are really no things needed from the product itself; you only have to look at the payments being made by the end client.
When you go one step higher, you will have partners, which could be agencies that refer clients who may actually want to onboard them as well to make their clients more successful. These are not always money orientated, especially the bigger agencies; they don’t always care about the kickback fee; they just want to make sure that their clients are going to be successful. So that is a big difference between affiliates and partners. And then often, when you talk about partners, you might also talk about higher average revenue per account or enterprise companies where the end client actually wants us, the SaaS company actually wants to see also what is in the pipeline of this partner. So lead sharing could be involved here as well.
And then the last one, not going to dive too deep into this, but a technical partner. So think about where your SaaS is built-in integration with another tool. So this is fully outside of the scope. But you could say where you have like a lead scoring tool within a CRM system, for example, and you would do like revenue sharing, but this is like really high level, where often you talk to that partner yourself, there’s not going to be a third party in between. It’s hard to set up, but, of course, you’re not going to have many of those. So I guess, in short, like what is affiliate/partner marketing, it is a way to influence potential customers before they talk to you. And what you’re going to do is you’re going to leverage somebody else’s network to get to your ideal customer profile, that it is going to come back. The beauty of affiliate marketing is that you’re going to give them links, right, which they can share, either in a newsletter, on their blog, or any way they reach your ideal customer profile, and you will get new backlinks.
Why you should use an affiliate management tool
So in the next slide, I will also show you as well, but one thing I always recommend is to use a tool, use an affiliate management tool, which actually gives you SEO-friendly links, which basically means the link has to go to Richie.ai. And then the tracking has to happen after that. So it has to go to the main domain, and then the tracking happens after that. So there shouldn’t be anywhere to redirect in there or anything like that. And it’s a paper performance journal, it’s or CPA, as you can call it, which means you wouldn’t pay the affiliates unless you get paid clients from them. So this means that you do not have any high upfront costs; unless they deliver, you pay clients, then you’re going to pay them, but you already received the money by actually giving them a cut from the money you receive. So this is why it’s a really good channel for SaaS companies because you don’t have to invest a lot of money upfront, basically. So how does it work? This is the typical easy SaaS flow. And, of course, there are going to be differences there. But you’re creating demand, which is the direct channel, people would either sign up who could demo or anything that your main CTA is, call to action, then they would move, they could never move to paid if you have a premium model, or you have a free trial, and they would never move to the paid version. And if they move to pay, then they’re gonna pay us on a recurring basis, as we’re SaaS. It could be monthly, quarterly, or annually, but either way, it’s going to be recurring. How does it change when you go into affiliate marketing? This is the flow when you go to affiliate marketing. So the affiliate is going to do the marketing for you. When they create signups or book demos, that’s what you call a referral. Still, they could never move to pay, or they move to pay, and once they move to pay, then basically, a lot of things will happen. So you receive the payment, you agreed to a certain percentage with the affiliate, what you’re going to give them. The affiliate management platform should calculate it, or you can even do it manually. Then you’re going to approve the commission; you might hold it for 30 or 60 days, just to avoid any fraud, like people buying an annual subscription and asking for a refund as soon as they get the kickback for your commissions or those kinds of things, you definitely make the to make sure you cover. But in the end, if they do a proper business, then it’s going to be a recurring model, right? Where you agree with them a certain percentage, commission-wise, against a certain timeframe. So it could be if I deliver Richie new paid clients, I would receive 20% Commission for 12 months. So as long as somebody keeps paying, I would receive 20% of whatever that person is paying Richie.ai. If they upgrade, I will get more money; if they cancel, I won’t get anything anymore. So that’s why it’s really easy to calculate, like how much money is Richie.ai going to pay me if I deliver them any paid clients. This is the ideal scenario. And this is why we also have a tree as a logo where ideally you can really create a good foundation where you’re going to give them, of course, a lot of information as in that the partners and affiliates know exactly how to generate paid clients for you. And if you create a lot of bait. A lot of partners and affiliates, if they’re going to create referrals, then you’re going to have something like this where it can become like a really huge network.
Affiliate Marketing Fit
What is the best time to start with affiliate marketing? Like I call it to affiliate party fit, I made it up like I think I made a new term. But like what I would recommend is you need to have paid clients. If you do not have paid clients, do not start with affiliate marketing. Because if you don’t know how to sell yourself, how should an affiliate sell for you? So, you need to know the objections; you need to figure out your marketing, as in the conversion on the website, going from trial to paid, etc. So you need to have your things in order. And I would even say maybe start at like five or 10k monthly recurring revenue because then you know that you already figured things out because you can’t have an affiliate do all the heavy lifting for you, basically.
In the ideal situation, you’re going to have people interested in already referring you, whether it could be clients asking, Hey, can we get a kickback fee if we refer you guys, maybe agencies or any other affiliate requests you’re going to get like if you’re going to have a live chat, people might already be asking you if they can refer you for money. And, of course, if you’re going to have people referring you, they need to have some kind of material. So make sure you already have brand materials in any way possible. So the easier you make it for people to start referring you, the more you’re going to get out of it, right?
So think about comparison pages on your website, think about case studies, think about visuals, think about any texts they can already use. So if I become an affiliate of Richi.ai and I want to mention them in my newsletter, ideally, I would already have a text available with an image that I can just put in without any effort from my side. Or I can already look at a case study to see exactly what people get out of Richie.ai, so I can already use that in my promotion. And in the end, you’re gonna need to invest time to actually start growing a new revenue channel because it’s not just sitting back and relaxing; you need to make sure that you’re actually going to invest time. So the more time you invest in it, the more you get out of it.
So when you look at a tool, and when you’re looking at an affiliate management tool, these are the things I would recommend looking at. So already mentioned SEO-friendly links, so make sure they refer to your domain, and the tracking happens after that. Motivate affiliates. So once you recruit affiliates, which is already hard, it’s even harder to make sure that they stay motivated. So make sure that there are tools within the platform which allow you to do so. Have them agree to your terms. So these are not your normal terms, the terms and conditions you already have. These are going to be affiliate terms. So just to make sure that if they do any fraudulent activities or anything like that, you’re going to cover yourself legally. That’s already the second one; make sure that the platform detects any fraud, which is, of course, happening because money is involved like that; you can’t avoid that. But of course, to come to make sure that they can detect it. And ideally, you don’t want to work in a silo where you have to do all the work. So a platform should really help you also to find new affiliates.
My background is in CS. So as Ermek mentioned, like no big upfront fees, and fees grow based on the value it brings. There’s the most ideal situation, right? Where the more value you get out of the platform, the more you’re going to pay for it, but then you don’t mind anymore. And then any support for affiliates, which is always good because if they do well, you do well. And then you can grow from there. Give me one second; I’m gonna drink a sip of water here.
Ermek Rysbek 22:00
That was muted. It’s all good.
Joran Hofman 22:04
Question: Can not having good affiliates hurt your business?
Yeah. Can not having good affiliates actually hurt your business?
It depends on what they do. You can have many as long as they don’t do any weird, weird activity. Like one thing we had, for example, where somebody would launch a client of ours on Product Hunt, which is definitely a no-go, of course, because the company wants to launch itself on Product Hunt, and they use their affiliate link.
So they could hurt you, but this is why it’s really important to figure out where the traffic is coming from. So, if somebody is committing any fraud, which you can never, of course, again, avoid, you need to have a platform, which actually shows you okay, well, the clicks have gone up from zero to 200 within one day, where’s the traffic coming from? Like, what is happening? Are they doing anything which they shouldn’t be doing? But ideally, it’s always quality above quantity.
You can have five really good affiliates who maybe drive even more revenue than 50 others, basically. So make sure you find the right ones, which are gonna often be the ones you already know. Because that’s, that’s basically the next step. You can set up a program. Then, of course, you need to same as you need to grow your SaaS, you need to grow your affiliate programs; how to go from zero to 10 to 200 partners?
How to recruit affiliates?
The best place to start with, and best biggest win at the beginning, is your current network. Like the current users, you already have the current clients; they know your tool, and they know why people should use your tool, so leverage them basically. So make sure that you start motivating them to start referring you. If you do so, you get more backlinks, and even though they might not do it for the money, it’s really good for you both in two ways.
Mention the affiliate program on your website
Inform about it on your website. I will show an example in a second, but the best practice is just to add something in the footer and maybe create a specific page that gives more details. Because affiliates are going to look for this, and like I often go directly to the footer to see if there’s an affiliate program or partner program in the footer. You can also proactively recruit affiliates. I’m going to cover a couple of ideas, but think about any top leaders in your niche.
Recruit competitor affiliates
Maybe look at competitor affiliates and then start recruiting them. If it’s competitor affiliates, then you don’t have to explain to them what your tool does because they already recommend your competitor, plus you don’t have to explain to them what affiliate marketing is because they’re already an affiliate of your competitors. So, the less you have to explain, of course, the easier it gets to recruit them. And then again, for your affiliate management to, ideally, help you as well to find affiliates for you.
And we have another question: How do you attract traffic sources when you do affiliate marketing? Yeah, so the traffic sources are something the affiliate management tools should provide you, right? Like, where, where’s the traffic coming from? Or look in your Google Analytics because often there’s going to be a parameter behind the domain, right? So we, for example, it’s going to be, I don’t know if it’s Richie.ai, but I’m just going to use it, it might not be the right domain, but it will be Richie.ai, then question mark, and then the tracking happens after that.
So you should be able to filter on that as well in Google Analytics or check it into the affiliate management tool you’re using, where you can figure out where’s the traffic coming from. Because it will show you the source, hopefully. This is how I can set things up. This is an example of Baseline they have within their footer; they would have affiliates, which would actually go to a certain partner page where they explain a bit more, or they could divert it into the program where they’re running their affiliate program. So that often has a landing page or signup page as well, where you can just quickly divert them there, and then people can apply to become an affiliate.
This one we often use, which is looking at competitive data. So one thing you can do, for example, is to look at the backlink profile of your competitors. You might already be doing it for different reasons. But when you look at it purely for affiliate marketing, there’s often, I don’t know if you can see it well, but I can summarize. It says sponsored. I think in ahref, it says something similar as well. Not everybody matched our affiliate links, of course, as sponsored, but if you just select that within the tool, you quickly find out and if you know they’re using an affiliate marketing channel, you will quickly find some links that have the structure you’re looking for. So it could be a question mark; FP, if they use Firstpromoter, will be questioned by GR if they use us, for example, so basically, you can find the structure if you use that, then find all the backlinks with a certain affiliate profile in there, then you can actually find all the affiliates, and then you can start reaching out to them, and those are going to be really good ones because they are already promoting your competitor.
Another one is to find high referral traffic sources via Similarweb. So you could just enter any domain in Similarweb, and you can find, basically, which domains are referring to that domain. So you can type in your competitor, and you can quickly find out how they are getting their referral traffic, and could we also get some of that referral traffic as well? So this is more towards the bigger traffic sources, which allows you to quickly find out; you should try to reach out to them and then get them as an affiliate of ours. I explicitly use a screenshot where I use a free trial where you can only see one row.
This is not ideal, and the pricing of both of them is pretty high. What we often do is we basically just have somebody on Fiverr, who has a pro account, we just send them all the domains we want, and then you can have an export for $5 per domain or something like that, which is a lot cheaper if you actually buy a monthly subscription with any of these tools. I don’t know if I can actually click on it, but I can send these links later on from the profiles we use, which is really nice.
We send them in bulk, 20 domains, and then we get all the data back at once, often within a couple of hours. Then the good thing here as well because often, the free trial package and even the smaller packages don’t allow you to export all the rows. So, for example, sometimes, if we do a SEMrush export, we would get up to 30,000 rows, which allows us really to go bulk, and if you had the startup package, you might not be able to do those kinds of export.
This is only the only screenshot from our tool. Again, it could look different for different tools. But, I would recommend going for a tool, which does something similar where you can list your affiliate program, and then affiliates can request to join your program. So for us, it works that the affiliate has all the leverage or the power, so they could actually apply to become an affiliate of yourself. And then you have the power where you can ask them questions; they need to answer those. And then, you can either accept or decline their offer. And then, from there, they can start referring you.
Motivate your clients as soon as you start getting those; those will be your affiliates. As soon as you start getting them in, they need to become, of course, active; they need to start referring you, and then you need to make sure that they stay active. So one way of doing this is also looking at a tool which actually allows you to have them grow into a different tier. So let’s say you started with 20% for 24 months in this example; ideally, offer them something higher. So 30% for 24 months if they give you 20 paid clients, offer them 40% for 24 months if they give you 50 paid clients to always try to motivate them to do better.
So in that way, you can reward them with higher percentages and maybe a longer period. And then they’ll be really happy, of course, once they start generating paid clients for you. Yeah, one other quote. In the end, I think this is really true, as people do trust recommendations from others. So this is why it’s really important to start leveraging somebody else’s network, and then they start referring you. We’re gonna dive a bit deeper.
How to measure success for your Affiliate Marketing channel?
Hopefully, these terms are familiar. If not, I’m gonna explain really quickly. LTV:CAC ratio, which basically stands for lifetime value versus customer acquisition cost. So often, when you’re funded, your investors probably have asked for this many times. And one other popular term which is coming up more and more is the payback period. So how quickly can you actually get the money back invested into acquiring new clients? This is something which you can calculate as well. I actually do have a sheet for you guys as well, which I can share, which we can share afterwards as well, which you can use. Just some quick tips, like how to increase the LTV to CAC ratio. So to make sure it becomes healthy is to, of course, make sure that the commission period is shorter than your lifetime value.
Of course, the shorter the commission period, the higher the LTV to CAC ratio becomes but be aware that affiliates want to make a lot of money, of course, by referring you, so you always have to think of two sides basically. Because, again, a lower commission will make sure it’s going to be more profitable, but not sure if affiliates actually want to start referring you if you offer a really low commission. The same goes for the fixed cost. Of course, if we don’t spend a lot of money on it, you will become more profitable, but it might be that you’re not getting as much out of it as you want. To give an example here as well. Semrush, I think it’s a company that most people know. They started with their affiliate program for 40% lifetime.
They changed it last year, but that really helped them to grow fast at the beginning. So they really gave a good percentage away against a really good turbo force lifetime. That allowed them to quickly their program. And again, now they’re not changing it for new affiliates.
Payback period model: I made a simple calculation, so bear with me, but there are many ways of doing this. I found out, but the main goal of the payback period is to define how fast you can get your investment back. So a simple calculation would be payback period is the initial investment divided by yearly cash flow. So, there’s already a calculation at the bottom. So I made a really simple calculation on the right side. So if you would start running an affiliate program, you’re going to have the cost of the affiliate management, too, and you’re probably going to have the cost of employees. So let’s say you start with 10% of his time; he gets a 50k salary.
You’re going to have recruitment costs, which basically means that you might want to do some outbound, you might want to buy, like Semrush, subscription or Similarweb subscription or anything like that. And, of course, you have the commission to pay, for example, 30%, for 12 months, but that’s what you see in the top right corner. So let’s assume you got 50 new paid clients; you can have like a total unit cost of 15,500.
When you look at the cash flow when your average revenue per account is $50, and it’s actually on a Monday level, my lever income review is $50 per account, whereas when paid annually, it’s going to be $600. So if you’re really careful, it would be around $30,000. So, in this case, it would take you almost half or around half a year to actually get the money back invested into this channel, which is a good payback period. That’s kind of what people are looking for. Like, five months is better, this is six months, but that is, of course, a good payback period.
And you will see those bootstrapped saas companies want to keep it as low as possible, whereas 100 companies can, of course, keep it a bit longer. But this is an easy way again to calculate your payback period, and you can change the numbers, and a higher average revenue per account with the same costs, of course, is going to make sure that you’re going to have a quicker payback period. That’s what I will share.
Again, I do have a doc, which I can share with you guys. I do have it in here. So when we share the slides, it is going to link towards that where you can basically fill out all the metrics yourself. Then you can figure out, okay, what do we actually want to give away, but again, make sure that you also looked at it from the other side: how much are the affiliates going to get if they give us five paying clients or with ten paying clients because, in the end, you need to make it worth their while to make sure that they start referring you. So otherwise, you wouldn’t get a lot of affiliates in. I think I kept it at 30 minutes. So we do have an offer for everybody joining or watching the webinar in October still.
Connect with Joran Hofman
We’re gonna have probably some questions. But if people want to talk to me, like I’m a mentor on GrowthMentor, or you can connect with me on LinkedIn. Just type in Flip Flop entrepreneur or Joran Hofman, and then you’ll find me.
Ermek Rysbek 38:06
That rocks, man.
Joran Hofman 38:14
Yeah, yeah, I like it. Like, it’s a good way to give back. Give some knowledge back, especially because most of the sessions I have been around are affiliate marketing or customer success because there are a lot of questions around that.
Questions regarding presentation
Ermek Rysbek 38:29
That’s some really cool stuff; we might actually need it ourselves too. So, thank you so much, Joran. I actually had a couple of questions that I wanted to ask myself. But I also see that there are questions and questions like this section as well. But this is something that I was always wondering when it comes to affiliate marketing, how to manage what your affiliate is going to say when they sell it. So how to make sure that they are not misleading the customer or that they even share your vision in a way, you know? When they basically say things that match your business model and that they are actually not going to hurt your business in the long run. Because if your affiliate is only motivated by money, they will probably be willing to say things that might not really be your mission statement, you know. So that was my question.
How to make sure affiliates don’t mislead the customer?
Joran Hofman 39:30
Yeah, I started with the brand assets; I would say, which we already talked about a bit, right? Just making sure that they have all the relevant materials so that they don’t have to make things up. That’s one. In the end, especially if you’re your product lead growth or if you have a sales team.
The cycle doesn’t change as the affiliate would start referring traffic towards you, but the signup process and the follow-up on that will remain exactly the same. So, in the end, they can’t mislead them too much unless, of course, you already have like a purchase button at the beginning of the following. But other than that, everything remains exactly the same for the product.
You will, of course, make sure that people understand what they’re actually getting themselves into before they enter their credit card details. So in that sense, it’s a bit different than affiliate marketing within B2C, right? Where it’s really quick, people are buying something, whereas B2B still takes time.
Like, we have affiliate marketing for enterprise companies, and the sales cycle remains exactly the same and even becomes longer because an affiliate would recommend people towards their tool. And then they would have a lot of sales conversations still, so only the beginning point will change and not how the tool is going to be sold often.
Ermek Rysbek 40:56
That’s a good point. Good point. My Yeah, another question that I had myself. How much is the lost traffic, not lost traffic, but, you know, like, in affiliates, it’s basically, usually the biggest problem? They talk about how much of the affiliates, traffic is actually getting lost because they see the company, and then they can go just sign up for that. I mean, they’re going around it by offering discounts now. How much is the lost traffic usually, based on your experience? Like, is it 5% or 7%?
How big is the lost traffic problem?
Joran Hofman 41:37
Yeah, that’s gonna be different, I guess. Like, that’s really hard to guess, right? Like, I mean, we work with cookies. So if people click on the link once, then the attribution lasts until the cookie period is over. But, it’s unavoidable that people go to a blog, such as “The Best Ten Tool for Affiliate Management,” and they find the number one, don’t click on the link, and actually type in it to win in Google themselves. That’s unavoidable, and I don’t think you can really measure that either, how much the percentage is, because you can’t measure that.
Ermek Rysbek 42:13
So nobody measured that before.
Joran Hofman 42:16
I don’t know how. If you have a way, then I’m happy to do to try it out. But I wouldn’t. Like you can never find an accurate way to measure that exact lost traffic because it’s brand key keyword searches. Maybe? Yeah. It’d be hard.
Ermek Rysbek 42:35
Well, yeah, let’s look into some questions that are over here. I think. So there’s one. So, if your affiliates are not that good, can it, in the end, hurt your business? I think that’s the question.
Can bad affiliates hurt your business?
Joran Hofman 42:56
Yeah, yeah, I think I, that’s the one I did cover a bit. As long as they don’t do really shady things, then it couldn’t hurt your business that much. As in, I gave an example. For example, where an affiliate did a product launch for one of our clients. Like, that’s definitely not ideal; it takes a really long time to take the launch off, etc., which is not good.
But if they would start sharing your links on blogs or anything like that, of course, you could get back low domain authority links, things like that. But you can’t avoid that either. The good thing with affiliate marketing is, especially since we already saw it, you’re only going to pay them when they deliver you paying clients. So, they’re not going to cost you a lot of money. Like they might indeed do some weird things, but the impact will not be that high.
Ermek Rysbek 43:59
Let’s see. So I see a couple of questions here. I also see one question in the chat. So do you want to go with that? So, it says: What can bigger brands do? How could they up their game? Like around affiliate program, especially for CAC, is not a problem, I guess if it’s over or something?
How to setup an affiliate program for bigger brands?
Joran Hofman 44:30
Yeah, yeah. I mean, if budget or customer acquisition is not a problem, then it’s easy, of course, to stay with ads or other things, right? But in the end, you come to be dependent on the platform, so often you get more competition on your keywords, then the bids will go up, and then suddenly your customer acquisition costs might also increase as well, or your budget becomes less so I will go for bigger brands, of course, I’m a bit biased, but I will definitely make sure that they also start running an affiliate program because you’re not going to be dependent on other platforms where you are going to spend money first before you actually get paid clients. So with this, you kind of turn things around and you kind of create a long-term channel where it’s really easy to calculate your customer acquisition costs for the long term.
Ermek Rysbek 45:27
Yeah. Yeah. And also, like in this kind of economy, I think, like, companies are not going to have bigger budgets. And they will definitely look into the CAC.
Joran Hofman 45:40
Yeah, exactly. I mean, that’s the biggest thing, right? Like all the investors. I sold my SaaS to global Amsterdam a couple of weeks back, and the payback period is a big thing at the moment, or they even have like a profitability rule, the 40 rule, which the Dutch investors even say might become the 80 Rule where it means like, they need to become more profitable, they need to make sure they have more money in the bank. So this is why like affiliate marketing is definitely a good channel to start.
Ermek Rysbek 46:17
I see. Yeah, there are a couple of questions here. I don’t know if those are the same person or not. We can rephrase the second one, I guess. Yeah, it says, How did you start growing your website? From your experience, what was the most effective way at the beginning? We have; let’s rephrase it. Like, if it’s before the affiliate, like if it’s not ready for an affiliate program? What would be a good way to grow your business before? Like, how to become affiliate ready?
How to become affiliate ready?
Joran Hofman 46:47
Yeah, I mean, it’s kind of still where we are a bit, as in, our brand is not really huge, right? So, we’re not fully ready as well ourselves. But when we look at like our website, what we have done is consistent. See, I guess that’s, that’s the main thing I can say, as in, you have to put content out there. And the first 30 to 50 blogs, you might not get any traction, like if you push them out really quickly, like what we’ve been pushing are like four blocks per week at the moment. And, like, it’s going to be slower steady growth, and especially at the beginning, if you just started out, if you bought your domain, you might still be in the Google Sandbox.
And people say that if it’s there, it’s not there. But for a new website to gain traction, it might take a while. And then, at one point, once you start getting indexed, you will go up, but to get indexed, you need content on your website. So consistency in creating content. That’s key. So, what, for example, Richie.ai does here is they have webinars.
They might put his webinar on their blog; they might create the entire transcript on their blog as well, which means it’s an hour of talk, probably 40 or 50,000 words; they’re gonna write everything out. And they’re gonna have a lot of me saying affiliate marketing, so they might start ranking on affiliate marketing after this webinar. So that’s the biggest thing. Start creating content, and it is going to take longer than you probably expect it. But make sure that you get yourself out there. That’s the biggest thing, and don’t buy, don’t do, quick wins. I don’t buy backlinks on Fiverr or anything like that, where you can buy 10,000 backlinks. That, in the long term, is going to hurt your business, basically. So I guess that’s a long answer.
Ermek Rysbek 48:55
Yeah, that’s a good one, though. So also, let’s do a couple more questions. I think this question was answered, but how do, basically, attract traffic sources? But let’s do it this way. So do you think all this, like affiliate platforms like yours, and there are multiple others, is the best way to actually track sources like affiliate partnerships, and marketing sources, today? And if you don’t have a partner like this, how do you keep track of it? Like, is there a way to actually do it without a partner like this?
How do affiliate networks attract traffic?
Joran Hofman 49:44
Our tool doesn’t do it. And most of the tools don’t do it. Like in the end, when we only care about the traffic coming from affiliates, and we don’t show anything else. All the other traffic, we don’t care about it, is the simple answer. So what I would I recommend? I mean, everybody uses GA, right? In Europe, it’s still, I don’t know if it is complying with GDPR or not, but I think 85%, maybe 95% of the websites are still using GA. So I guess to make sure you have GA4 because Google Analytics and Universal Analytics are going to be non-existent anymore from the middle of next year. But that’s where I would start. So basically, set up Google Analytics four and then if you haven’t installed Google Tag Manager, make sure you do so as well. So, both of them are free tools. What it allows you to do with Google Tag Manager is you can say basically, I want to see all the people who clicked on a certain link or clicked on a certain button. So for us, our main call to action is “get started.” So, I want to know how many people actually clicked that button, how many went further, how many clicks, then all the things we want them to fill out and then sign up things like that. Once you create those events within Google Tag Manager, you can create a flow where you can quickly see what the drop-off per stage is. And, of course, at the beginning to come back to the question, you can track it per source. So you can quickly see if referral traffic is driving a lot of signups or actually Google Ads is driving a lot of signups or organic. So, that’s where I would start; you don’t have to invest a lot of money in tools because Google Analytics and Google Tag Manager are free to use; we just need time to set them up. But people can help you with that as well. Like, there’s Peter on GrowthMentor on Fiverr; you can just give them access, they set it up for you, and then you delete the access again.
Ermek Rysbek 51:45
And let’s do another question over here. I guess we can keep it to the last one. So it says, how can one understand that the ICP is wrong? I guess that refers to, so, let’s say you actually picked an affiliate. And then, let’s say that you feel like it’s not actually working well. How soon can you understand that it’s wrong? And how can you even understand it as well? Like, the churn.
How do you know your ICP is wrong?
Joran Hofman 52:15
Yeah, I mean, if you’re not selling to your ICP, then your churn is going to be high, right? Like, that’s, I guess, like the biggest thing is if they can’t get value out of your product, then they’re gonna churn and churn basically means they stop paying you. So the easiest way to find out is if you don’t really understand your ICP or you’re not selling to your ICP just because you probably have a high churn. And churn is different in different companies where if you’re selling to SMB, it might be a bit higher for you. So mid-size might be a bit lower, and enterprises might even sometimes have negative churn where you sell more towards your existing client base, then you lose, but in the end, your churn will indicate if you’re selling to the wrong people.
Ermek Rysbek 53:12
Yeah, so would that mean that you will not really know until, like, three months after having an affiliate?
Joran Hofman 53:22
Yeah, it depends. For example, I do a lot of calls with our signups. And I can quickly find out if they’re our ICP, or I can even go to their website, and I know if they’re going to be a match for our service. So again, we’re looking for B2B SaaS companies, who already figured out that conversions are ideally doing product-led growth, so and there’s or like, slash their self-serve, which means is, if I go to Richie.ai, I kind of want to sign up directly. And then I don’t have to talk to either of you to actually get a paid plan.
Like that’s our ideal client. And you probably have ways as well to find out if somebody actually is a match for Richie.ai, and for the person who is asking, like, if you defined your ICP that you quickly find out probably already with the information available. Is this actually a match or not?
Ermek Rysbek 54:15
Cool. Well, I guess on that note, we can end this webinar today. It has great insights from several people there. So, thank you, Joran, for your time. Here we also have a little offering for people that join or are watching this webinar. So we will be able to offer our business model. We ship out a little bit of the commission that was supposed to go to the bank.
So what do we do for the attendees today and for the guests that will be watching this video in the future? So you can use a code as well; when you sign up, it’s going to be ready to use; it is pretty simple. We wanted to do Joran Hoffman, but then we decided Reditus was going to be better. Just kidding.
And it will basically waive our portion of the fee for the first 5000 in a commission that you will receive from banks. And we’ll just help you a little bit with that. So yeah, and there is also LinkedIn from Joran. So you guys are welcome to join and add him and continue the conversation. And if you have a B2B SaaS platform, I think that Reditus is a really good way.
And if you’re affiliate ready, let’s put it that way first. So I think Reditus is a good product for you to check. And, if you have merchants, and they have capital needs, and you’re thinking about actually launching a lending program, so check out our product as well. And on that note, well, I would really like to thank Joran for your time.
And thank you, guys. This was a good webinar. And this webinar is going to be available on our YouTube channel and probably on our blog, as well as maybe on LinkedIn and maybe on the radio plus as well. So well, thank you so much, guys, and yeah, have a good day. Bye, everyone.
Joran Hofman 56:23