In Episode 66, we are finishing up our series on Affiliate Marketing and Affiliate Programs. We wanted to end with a look at tips for and challenges of running a large-scale program.
I couldn’t find a better guest than Alfred Najem, Director of Affiliate Marketing at Bluehost, which is also our ongoing sponsor. Bluehost paid out more than $5 million in affiliate commissions last year and has run a successful and growing program since 2003. If you are thinking of starting an affiliate program for your company, or even looking to improve, give today’s show a listen.
We chatted about:
- The affiliate program at Bluehost and what makes it so successful
- Several key factors a large company should consider when starting an affiliate program
- One of the largest challenges many affiliate programs find when they are starting out
- Some tips on what can make an affiliate program successful for the affiliate marketer
- A few examples of what has made Bluehost affiliate marketers so successful
Thanks to Our Podcast Sponsor: Bluehost
Bob Dunn: Hey everyone, Bob Dunn here, known as BobWP on the web. Thanks for tuning in for our fourth and final show in our four-part series on affiliate marketing and affiliate programs. Today we move back into running your own affiliate program. This time we will be diving into managing a large affiliate program. I could think of no one better to bring in than Alfred Najem, Director of Affiliate Marketing at Bluehost, who of course is our sponsor as well. Hey Alfred, welcome to the show.
Alfred Najem: Hi Bob, thanks for having me.
Bob: Alfred, I want you to share a bit more about the actual affiliate program at Bluehost, but before you do that, can you just tell us a little bit about yourself and what you do as Director of Affiliate Marketing at Bluehost?
Meet Alfred Najem, Director of Affiliate Marketing for Bluehost
Alfred: Yeah, absolutely, Bob. As Director, I manage the department and all of its aspects: cultivation, recruiting of affiliates, support, projections, running multiple campaigns, beating seasonality. Really, it’s pretty much everything in the affiliate department. We have a team of about ten people and we focus on different aspects.
Bob: In other words, you don’t have a lot of downtime.
Alfred: Not at all.
Can you tell us a bit about Bluehost’s affiliate program?
Alfred: Absolutely, Bob. We’ve had an affiliate program since 2003 here at Bluehost and the affiliate program is a large part of our overall marketing strategy. We put a lot of focus on the affiliate channel. We’ve built an in-house tracking system, we offer landing pages, promotional pricing. We’ve put together everything that an affiliate marketer needs in order to be successful in the affiliate marketing industry. One of the most important pieces is we don’t have a cap on the amount of commissions an affiliate can earn. Obviously, when an affiliate is investing time, and efforts, and money in something, for me, there shouldn’t be any cap and that’s how we do it. We have a great team, probably one of the largest affiliate teams in the hosting industry. We are all experienced in affiliate marketing and love to work with affiliates. We love to optimize performance to work on all of the campaigns directly with the affiliates to drive the best results possible.
Bob: Yeah, I think that’s so important, because I know as an affiliate marketer, when you make my job that much easier, I win. Especially with no cap on affiliate earnings. Because there are a lot of people who get quite successful in certain areas and their ability to be an arm, a salesperson for you, that’s pretty cool. I did have somebody come on, Pippin Williamson, he talked a bit about finding the affiliate program on your WordPress site and smaller affiliate programs.
What are the key factors a larger company needs to consider when starting an affiliate program?
Alfred: The number one thing they need to do is identify if affiliate marketing is right for them. In most industries, it can be lucrative, but do some analysis and determine if there are affiliates that are willing to sell your products. If there are already affiliates that are selling similar products, like a competitor’s products, you need to understand the market. Once you identify that there is a potential for growth coming from an affiliate channel, the next step is to determine if you want to build your own tracking system, or use a third-party, or use affiliate networks (there are multiple ones out there), or do both. One of the key pieces in the decision making is how much you’re going to grow this, how much potential you see in growth. In five years, through this channel, what do you want to achieve for your marketing results? That’s an important piece.
And setting a budget, right? Not a lot of companies can have a no-cap-on commissions at the beginning. I mean, when you’re just starting, right? You want to determine how much budget you have, because at the end of the day you’re going to go out and start recruiting these affiliates and working with affiliates and then set a budget of, for example 5K. But what if one affiliate reaches the 5K in two days? That would create issues. So make sure you know how much budget you have and then work with that. The other big piece is the commission structure. You want to decide, “The affiliates are going to get a commission. Am I going to give them a flat fee? Am I going to give them a percentage? Am I going to give them something on renewals?” (For example, in web hosting, people renew, right?)
These are important pieces of the puzzle that a company needs to be aware of before moving forward. The other big piece is in affiliate marketing, there are some issues that we tackle on a daily basis, like managing fraud. At the end of the day, you want to make sure that the signups that are coming in are legit signups. If an affiliate is selling your product, you want to make sure it’s a legit sale. We’ve got a bunch of tools that we’ve built to determine if a signup is good or not. Obviously, that is an important piece as well, putting together some tools to prevent fraud from happening as much as possible. The other piece. I’m not a lawyer, but you want to be on top of the FTC compliance regulations. FTC is pretty big and it’s really important to understand it. Stay up to date on all the requirements that they have in the industry you’re in. That’s very important as well.
What’s the biggest challenge in starting an affiliate program?
Alfred: At the end of the day, you need to have some sort of a competitive advantage over your competitors, because most of the time you’re not going to be by yourself in the industry. You’re going to have competitors, right? What are you doing that are going to make the affiliates of your competitors, or even new affiliates, end up joining your program and promoting your products, instead of someone else’s? That competitive advantage piece is pretty important. Can you do better than your competition? When it comes to Bluehost, we offer great products. Our products and services are really, really good. And we offer the best tracking.
It’s one of the best tracking systems in the markets. We use every possible method to credit an affiliate for a referral. We track through cookies, browser info, IP, and this is where you have to be really, really honest with your affiliates. Obviously, the affiliates see the dashboard, but if something on the backend is happening, the affiliates do not have access to it, right? You want to make sure that you’re giving them credit for everything. That’s why we have all these ways of tracking affiliates and at the end of the day, our conversion rates are pretty strong and our affiliates see that we’re working all day long to make sure they get paid when they should be getting paid. We have many, many loyal affiliates, because they can see that.
So the biggest challenge is what are you going to do as a company to beat your competition and really have the affiliates work with you. Again, that competitive advantage is big and being there for the affiliates all the time. For a lot of affiliate marketers, this is their main job, so they need to know that the time they’re investing is in a company they trust, and it is in a department they trust, and even further, they need to trust the account manager. As an account manager, you need to be on top of things, you need to inform the affiliates about the specials that are coming up. These are so important. In a way, they help you develop a competitive advantage as well.
Bob: I think that’s great because a lot of people, and even when I was talking to Pippin Williamson a little bit about the smaller affiliate programs running on your own WordPress site, how many people he said thought, “Okay, I’m going to throw up this affiliate program, I’m going to put something up there, you sign up for it, and they just … It’s kind of like building your website, or starting an online store, they think they can just kind of sit back, and all these people will flock there, and then I’ll just pay them out when it’s time to pay them out.” Obviously, there’s so much more to it than that, and building that partnership, and being there for the affiliates, and providing all those tools. Good stuff, love it.
Alfred: Exactly, exactly.
What makes an affiliate program successful for the affiliate marketer?
Alfred: Besides the things I’ve listed, you always have affiliates that are performing the best. You’ll have affiliates that are driving three times the signups that, say, an average affiliate is driving. And if you want to compensate the affiliates based on the quality and quantity of signups they’re driving, that is an important piece of the puzzle as well. Then, continuous improvements of the services and products that you offer, that’s definitely an important piece. That’s something we’ve done an awesome job of at Bluehost. Obviously, being on top of what comes out in terms of the tracking and if there’s even more ways to track. Again, to make sure that your affiliates are credited for the sales, so being on top of technology as well, making sure affiliates get tracked when they should.
Can you share some of the successes your affiliate marketers have had?
Alfred: Absolutely, Bob. We have multiple examples of affiliates that moved, for instance, from promoting a competitor, to promoting us and obviously after we’ve reached out to them, and worked with them, and had them test our products we’ve seen, or the affiliates have seen, a lot of improvement on their conversion rates. Let’s say you’re promoting company X after they start promoting Bluehost. We’ve seen their conversion rates move from an X-percentage to three times that percentage. I don’t want to give specific percentages, because, honestly, it varies by affiliate, by channel, and so on. The affiliates were like, “Oh my gosh, I was wasting all my time and money promoting this company when I could have gotten three times what I could’ve got by promoting Bluehost.” Honestly, it’s not that I work for Bluehost, but we’ve seen that happen multiple times. We’ve had affiliates where they decided to join Bluehost and promote Bluehost right off the bat, before promoting a competitor. We have a lot examples and we’ve seen a lot of success coming from that channel as well.
What is a successful affiliate partnership measured by?
Bob: I know I have several colleagues, of course, I won’t name them either, but people I know that have had really great success with Bluehost and I think that’s very cool and I think a lot of that goes both ways. They’re doing their job, they know how to do it right and you guys are providing the right kind of tools, the right kind of support, the right incentives, and between the two when you’ve got that going, hey, you hit gold. What can you say?
Alfred: Exactly. It’s a win-win-win. Obviously, the affiliate marketer does not care only about making money, there’s a lot of focus on meeting their audience’s need, right? As an influencer, they need to make sure that they’re recommending the right product. With Bluehost having great products and having one of the best tracking systems, it creates a win-win-win. The customer’s winning, they’re on a platform that is awesome. The affiliate marketer’s winning, because their referrals are happy, and obviously they’re making the extra money on the side. We’re happy we’re getting the quality referrals as well. You have to create a win-win-win for this to work.
Bob: Well, all I can say is that I know a lot of other affiliate marketers are grateful for companies like Bluehost and others that give us the opportunity to create these kinds of partnerships. For our listeners, if you are interested in bringing in some extra income and who knows? It may be more than extra income, it may actually become a large source of income, or you’re really wanting to wrap up your affiliate marketing, I would suggest you head over to Bluehost and sign up for their program. Check it out, try their product.
I want to thank you, Alfred, for taking the time away from your busy schedule and sharing your experience and tips for those who may be looking to start their own program and for joining us on today’s show.
Alfred: Absolutely, Bob. Thanks for having me.