How To Scale Affiliate Marketing For Your SaaS Business
When asked about affiliate marketing, a whopping 90% of advertisers say that it is important to their digital marketing strategy.
Why do you think that is?
Simply because it works.
SaaS affiliate marketing is a low-risk, high-reward model for growing a SaaS business. By partnering with other businesses and website owners, SaaS businesses can scale their reach and acquisition efforts quickly and efficiently.
In this article, we will talk about how to scale affiliate marketing for your SaaS company.
But first, let’s talk about the different ways it can grow your SaaS business.
How Affiliate Marketing Helps Your SaaS Company Grow
There are several ways that affiliate marketing can help your SaaS company grow:
It Helps You Reach A Wider Audience With Less Effort
When you partner with an affiliate marketer, you are tapping into their pre-existing network of followers and potential customers. This immediately gives your SaaS product exposure to a wider audience than you could reach on your own.
What’s more, affiliate marketers are incentivized to promote your product because they only get paid when someone buys it.
This means that they are more likely to put in the extra effort to make sure their followers are seeing your product in the best light possible.
It Brings You High-Quality Leads
Remember that an affiliate marketer only gets paid when someone clicks their affiliate link and buys your SaaS product.
This can ensure that they have a vested interest in making sure the leads they send your way are of high quality and likely to convert.
This is especially true if you partner with an affiliate marketer who is already familiar with your target audience. They will know how to position your product in a way that resonates with their own audience and speaks to their needs.
It Can Leverage Social Proof
When a SaaS product is endorsed by a respected and successful affiliate marketer, it can lend the product some much-needed social proof.
If people see that an expert in the field is using and recommending your product, they are more likely to take notice and be intrigued enough to check it out for themselves.
This can help you attract even more high-quality leads.
It Can Lower Your Customer Acquisition Cost (CAC)
Affiliate marketing is a cost-effective way to grow your SaaS company. Since you only pay affiliates when they deliver results, you can avoid wasting money on marketing efforts that don’t produce any ROI.
What’s more, affiliate marketing allows you to tap into pre-existing networks of potential customers. That means you don’t have to start from scratch using other customer acquisition channels like paid advertising.
As a result, it significantly lowers your customer acquisition cost.
It Helps You Scale Your Marketing Efforts Quickly And Efficiently
When done right, affiliate marketing can be an extremely efficient way to scale your marketing efforts.
Once you have a few good affiliates promoting your product, the sales will start to come in without you having to put in any additional effort.
And as your sales grow, you can reinvest those profits into further scaling your affiliate marketing program by partnering with even more affiliates. This virtuous cycle can quickly lead to exponential growth for your SaaS company.
Now, let’s talk about some ways you can do just that.
How To Scale Your SaaS Affiliate Program
There are a few key things you need to do in order to effectively scale your affiliate program. Let’s take a look at each one.
Invest In An Affiliate Marketing Tool
If you want to scale your affiliate marketing campaign, you need to have the right tools in place.
There are a number of software platforms out there that can help you manage your affiliates, track their performance, and pay them quickly and easily.
Using one of these platforms will save you a ton of time and make it easy to scale your affiliate program as it grows.
But what kinds of tools do you need? Here are a few to start with:
Affiliate tracking software: This software will help you track how well each affiliate partner is performing. That can be in terms of the number of sales they’re generating and/or the amount of commission they’re earning.
It’s important to have this data so you can identify your top-performing affiliates and invest more in those relationships. Additionally, tracking those data can help you troubleshoot any issues with underperforming affiliates.
Affiliate portal: An affiliate portal is a central hub where affiliates can log in and find all the information they need about your program. That includes your promotional materials, affiliate links, and contact information.
A good affiliate portal can onboard your new affiliate partners quickly and efficiently. It can also make it easier for affiliates to promote your product and help you build strong relationships with them.
What’s more, it can be a valuable tool for keeping affiliates up-to-date on any changes to your program or product.
Scale Your Affiliate Commission Structure
As your affiliate marketing campaign grows, you’ll need to scale your commission structure so that it continues to incentivize affiliates to promote your product.
Otherwise, they may start to look for other opportunities that offer better affiliate revenue.
How do you scale your commission structure? Here are a few tips:
Offer a tiered commission structure: As your affiliates generate more sales, you can offer them higher commissions. This tiered structure encourages them to continue promoting your product and helps you reward your top-performing partners.
For example, let’s say you have three tiers to your commission structure: tier A, B, and C.
Tier A could be your basic commission tier which gives your affiliates 10% of all the sales they bring in.
Tier B could be for those that bring in at least 50 referrals within a month. They could have a higher affiliate commission rate of 12%.
Tier C could be your top-performing affiliates who bring in 100+ referrals within a month. They could have a commission rate of 15%.
This type of structure incentivizes your affiliates to keep promoting your product so they can reach the higher tiers and earn more commission.
Offer bonuses for hitting milestones: In addition to a tiered commission structure, you can also offer bonuses for affiliates who hit certain milestones.
For example, you could give them a bonus for every 100 sales they generate, or every $10,000 in total sales they bring in.
This is a great way to show your appreciation for their hard work and to keep them motivated to promote your product.
Adjust your commission rate based on your LTV: As your SaaS business grows, your customer lifetime value (LTV) will increase.
And as your LTV increases, you can afford to give your affiliates a higher percentage of each sale since you know you’ll be making more money off each customer over the long run.
For example, let’s say that when you first start out, your affiliate commission is 10% and your LTV is $1,000.
But as your business grows and your LTV increases to $2,000, you can afford to give your affiliates a higher commission of 15%.
This will help you scale your affiliate program while still maintaining a healthy profit margin.
Keep in mind, however, that you don’t want to increase your affiliate payout too much. If you do, you may find that it becomes difficult to scale your business since a large portion of your revenue will be going to payouts.
As a general rule of thumb, keep your affiliate commission between 10-30% of each sale.
Connect With A SaaS Affiliate Network
Affiliate networks are platforms that connect businesses with affiliates. And they can be a great way to find new affiliate partners and scale your program quickly.
What’s more, many affiliate networks have their own tools and resources that you can use to help you manage and grow your own affiliate marketing campaign.
For example, some affiliate networks provide training materials and webinars on how to run a successful affiliate program. Others offer promotional tools and resources that you can use to reach a wider audience.
When choosing an affiliate network, it’s important to pick one that’s reputable and has a good track record. You also want to make sure that they have a wide selection of affiliates to choose from.
Some popular affiliate networks that can connect you with high-quality content creators in the SaaS niche include:
Reach Out To Potential Affiliates Directly
While joining an affiliate network is a great way to scale your program quickly and reach a wider audience, it is not the only option.
You can also reach out to potential affiliates directly and ask if they’d be interested in promoting your product.
For example, you can search for bloggers and influencers in your niche who might be interested in promoting your product.
What’s more, you may also want to reach out to other businesses in your industry and ask if they’d be interested in creating an affiliate partnership with you.
Final Thoughts About Scaling Your SaaS Affiliate Program
Affiliate marketing can be a great way to grow your SaaS business. And as your SaaS business grows, you can also scale your affiliate marketing program.
Just remember to focus on quality over quantity when it comes to affiliates.
It’s better to have a small number of high-performing affiliates than a large number of low-performing ones.
And don’t forget to offer incentives for your affiliate partners to keep them motivated to promote your product.
After all, that’s how you can attract potential affiliates that can bring you high-quality leads and customers.
Want more guides to bring your SaaS company to the next level? Check out our blog here.