Outsourced Affiliate Program Management: Complete Guide – Dos & Don’ts in 2021
When an affiliate marketing program is properly managed, it can be your most profitable marketing channel. The problem is that many businesses leap into building their affiliate program, without considering what it takes to manage it effectively.
Poorly managed affiliate programs falter and fail, draining company resources and wasting a massive opportunity for revenue generation.
For this guide, we partnered with DMi Partners, an award-winning affiliate marketing agency, to show you exactly what it takes to manage a truly successful and profitable affiliate program.
They have managed dozens of great affiliate programs for different brands. Drawing on their experience and expert insights, we’ll cover the role of an affiliate program manager, what that entails and when to leverage outsourced affiliate program management to maximize the benefits of your program.
We’ll also look at affiliate management agencies, who needs one, who doesn’t need one, what they do and what to consider if you decide to go that route. The aim of this guide is to give you everything you need to know about outsourced affiliate program management.
Let’s dive right in!
How Affiliate Programs Work
In simple terms, affiliate marketing programs involve using external promoters, known as publishers, to market your products/services. They use their influence and network of connections to promote your product to their audience. In return, you give them a commission on the sales they generate.
Publishers can be almost anyone, from your customers and employees to big-name social media influencers. They can use word-of-mouth, email, their websites and blogs, and, of course, their social media channels. Trackable links allow you to identify when a sale or action came from a specific affiliate and you reward them accordingly.
Seems pretty straightforward right? You’re not wrong – the basic principle is very straightforward! However, that is just the tip of the affiliate marketing iceberg.
Almost anyone can set up a basic affiliate program and, with the right software tools, it will tick along on auto-pilot. These programs work but they don’t drive significant results or achieve huge revenue increases. To do that, an affiliate program needs to be managed effectively.
So, let’s get into exactly what effective affiliate program management means and what it takes to drive a truly successful, and profitable, affiliate program:
The Role of an Affiliate Program Manager
While affiliate marketing programs are simple in theory, they are not always simple in execution. And execution is everything when you’re investing in a marketing program and expecting tangible results!
There is a lot that can be automated with the right software, but there is also a lot that needs to be handled by an affiliate program manager. An affiliate manager can keep their finger on the pulse and drive the program to meaningful, sustainable success. Effective affiliate program management involves:
- Developing a strategy for growth and long-term objectives
- Setting attractive but profitable incentives
- Recruiting the right combination of the best publishers for your business
- Developing and maintaining close relationships with your affiliates
- Keeping affiliates engaged and motivated
- Monitoring how affiliates are representing your brand
- Keeping tabs on payments and revenues
- Providing affiliates with current information and promotional material to use
- Ongoing communication and relationship management
- Data collection and analysis to inform an evolving strategy for maximum growth and profit
Each of the points above involve numerous moving parts. It can be challenging to coordinate and manage all these aspects effectively. It requires a diverse skill set and a great deal of time and energy.
Some businesses will have the bandwidth and expertise in-house, and others will benefit from leveraging outsourced affiliate program management.
In-house vs Outsourced Affiliate Program Management
As you can see, the role of an affiliate program manager is complex and demanding. If you have the resources to hire (enough of) the right people, or you’re lucky enough to have a suitable team in place, managing the program in-house will work for you.
However, many companies don’t have the resources to have a dedicated team running their affiliate program and it often falls to someone in management or marketing, who takes it on as an additional project, while still doing the rest of their job.
Even with the best of intentions and the highest level of dedication, this won’t result in the same level of success as having a dedicated team and manager for your affiliate program.
A program manager who doesn’t have the time, expertise, or physical resources, to give to an affiliate program will not be able to execute all of the required functions effectively. This tends to be amplified as a program matures and scales when it demands more and is receiving proportionately less from your in-house team.
A poorly managed affiliate program won’t just stagnate and not make money, it can actually damage your brand and reputation. When the participants of an affiliate program are not monitored throughout the process (or were poorly chosen candidates, to begin with) they often turn to dubious marketing methods to sell your product/service and earn their commission.
Methods like false advertising, spamming, or copyright infringements when content is copy-pasted from other sources, can have direct implications for your company. From legal issues to a loss of trust, credibility, and a tarnished reputation. That kind of damage can end up costing you much more than the profit they generated for your program.
To summarize, if you don’t have the expertise and resources in-house and you don’t have the resources to acquire them (or would just prefer not to employ new staff) your program can suffer when it is poorly managed. This can cost you money, damage your business’ reputation and drive away customers in the long run.
To avoid this, outsourced affiliate program management is the answer. Let’s look at how outsourcing the management of your program can benefit you:
The Benefits of Outsourcing Your Affiliate Program
When you outsource the management of your affiliate program, it is best to go with an experienced agency. There are numerous benefits to using an agency for your outsourced affiliate program management. Here are seven of the most important ones:
1. Experience and Expertise: when you employ an agency to run your program, you have immediate access to industry experience and expertise that you’re unlikely to be able to hire for your in-house team. These are people who have experience in marketing and experience running various affiliate marketing campaigns. They know the ropes and they know how to use the rest of their marketing expertise to benefit your program – from SEO to great design and content creation, they know what you need and they have the skills (or contacts) to give it to you. They also know which affiliate networks, technology, and publishers to use for the best results.
2. Strategy Development: a good agency will be able to develop a strong strategy for your program, to drive growth and profitability. As part of a marketing agency, they will have access to a pool of ideas and experiences that can offer you a strategically sound, and creative or innovative, plan of action. They will also be able to lay it out for you and show you exactly how they plan to achieve those aims.
3. Publisher Network Relationships: an agency will have an existing network of trustworthy and effective affiliate publishers. This allows your program access to a verified pool of affiliates that have an existing relationship with the agency and your program manager. They will also have access to various channels and networks to find the best affiliates for your specific program.
4. Communication: from outreach and onboarding to ongoing communication and relationship building – there is a huge amount of communication that needs to happen between program management and affiliate partners. An agency will have the systems and personnel in place to handle this so you don’t have to. They will also be experts at the kind of communication required – not everyone is cut out for that and this is an area where many in-house programs fall short.
5. Data Analysis and Strategy Shifts: agencies have the skills and knowledge to analyze customer attribution data, and other metrics from your program, in a meaningful way. They can then translate insight into effective shifts in program strategy. This takes some skill and knowledge of how different metrics interact and what the implications are for a program overall.
6. Publisher Engagement: experienced agencies know how to manage publishers. They know how to keep them happy, engaged, and motivated. They know what to provide them to best leverage their media type, and they know when to give them free rein to create great content for you. This kind of knowledge comes with experience and having run several different affiliate programs – something that many in-house managers lack.
7. Scalability: one of the best benefits of outsourced affiliate program management is that you are all set for your program to grow fast, secure in the knowledge that no matter how big it gets – your agency can handle it. If additional personnel or expertise are required, the agency will take care of that and you don’t have to worry about it.
These benefits of outsourced affiliate program management result in an effective program that is primed to grow sustainably, support your brand image and augment your marketing efforts. This allows your affiliate program to thrive and achieve incremental (but also exponential) long-term success – driving profit and growth for your business. The best part is that everything is taken care of for you!
If you’re still not sure if you really need an agency or not, we look at who does and who doesn’t need one below:
Who Needs an Affiliate Management Agency?
If you’re planning to start an affiliate program or you already have one in place, you might want to hire an affiliate management agency if:
- You don’t have the necessary skills in-house and you can’t (or would prefer not to) find the talent you need to hire.
- You do have the skills, but you don’t have the bandwidth to properly manage your program and give it the attention it needs to thrive.
- Your program is in place but it’s not growing or meeting the milestones you need, or you’re not satisfied with your current affiliate program management.
- You have everything in place, but you’re struggling to reach and recruit great affiliates.
- Your program is growing rapidly and you’re running out of the resources/bandwidth to keep up and provide the same caliber of affiliate management.
- You have a strong program that has grown well and is profitable, but it has plateaued and you need someone to take it to the next level.
- You need an expert’s perspective. Sometimes, you just need an expert – someone to assess your program and find the best ways to optimize it, alongside the rest of your marketing efforts, and show you how different marketing channels can support and augment one another.
If any of the above sound like you, you will definitely benefit from outsourced affiliate program management!
Who Does Not Need an Affiliate Management Agency?
While most affiliate programs can benefit from a dedicated affiliate marketing agency – they’re not necessary for everyone. If any of these apply to you, you most likely do not need to outsource your affiliate program management:
- You have a team in place with various skill sets and experience in marketing, strategy, communications, content creation, and affiliate marketing. The team has the time and resources needed to run the program and scale it over time, without compromising their other commitments within your company.
- Your business is strictly brick-and-motor based, with no online sales or lead generation. In this case, your affiliate program will likely be small and tied to your geographic location. Promoters can then be managed one-on-one, from your premises.
- You do not have the budget for commission-based marketing and do not have room for affiliate commission in your profit margins. In this case, consider a referral or loyalty program first, which you can later augment with a small affiliate program and scale it gradually.
- Your affiliate program is small, you’re managing to grow it steadily with the in-house resources you have, and you’re satisfied with the results you’re getting. For some businesses, this is enough. Not everyone needs to drive growth and profit from an affiliate program, especially if they’re seeing great returns on other marketing channels. In this case, it’s ok to have a slow-burning affiliate program that you can focus on more at a later stage. Just make sure that it is managed effectively and your affiliates are properly managed and monitored.
If any of the above sounds like you, you could probably still benefit from hiring an affiliate management agency, but you don’t necessarily need one.
What Do Affiliate Management Agencies Do, Exactly?
So, what does an affiliate management agency do, exactly? Well, they manage your affiliate program for you, but there’s much more to it than that!
A great affiliate management agency will bring a lot to the table. It will offer you value that goes beyond the day-to-day logistics of the running of your program.
According to affiliate marketing experts, a great affiliate management agency will help you optimize and increase the output of your affiliate program.
To do this, an agency will leverage their affiliate marketing experience, diverse expertise, and their connections within the marketing space and various industries. This gives you instant access to their:
- Premium relationships with publishers, to ensure that your product is prioritized over your competitors’
- Content creation and media resources for great content and increased exposure
- Ability to develop a sound strategy for your program, to drive growth and profits in a sustainable manner
- Expertise with influencer marketing and other marketing channels that can benefit your program
- Their ability to execute effective publisher recruitment and development, to build lasting relationships that drive results
- Expert data analysis to assess customer attribution and develop precise ways to optimize your affiliate program
- Insight into the best ways to incentivize and properly reward high-value partners to maximize the program’s progress and profitability, in an incremental manner
In short, they will do everything we outlined in the Role of An Affiliate Program Manager and much, much more. This largely comes down to the fact that you now have access to a whole agency and all the benefits that come with it – from instant access to an expert team and their connections, to reduced costs and less time/input needed from you.
How to Select an Outsourced Affiliate Program Management Agency: 8 Key Considerations
When you’re looking for an outsourced affiliate program management agency, there is a lot to consider if you want to find the best option for your unique program.
The agency you choose will function as a partnership between you and the agency, as well as between the agency and your affiliates. In this way, they’re your proxy and will develop your relationship with your affiliates. You need to consider the quality of that partnership, from both your perspective and the affiliates’ perspective.
Check out this useful video from Project Life Mastery on YouTube to see how an affiliate will evaluate your program against competitors. It provides some insight into the space and how your program will need to run to be successful:
To find the best fit and get the most from your agency, and your affiliate program, here are eight things to keep in mind when you’re comparing options:
1. Experience – With Various Affiliate Programs and Programs in Your Industry and Niche
A great agency will have extensive experience in affiliate program management. The key players on their team should know what they’re doing and have a solid bank of knowledge to draw from.
You can ask them for a list of key clients, and look at case studies, testimonials, and reviews to assess this. Look specifically at their track record with affiliate recruitment, activation, and program optimization. If they have experience in your niche, all the better! This gives them additional insight into your needs and the specific space you’re working in, as well valuable contacts and relationships that can benefit your affiliate program.
2. Reputation and Credentials – Both the Agency and Their Talent
A good reputation and solid references are essential. An agency’s clients, both merchants, and publishers will give you the best sense of what it will be like working with the agency after the sales pitch and onboarding process. Ask them for references and check out reviews carefully.
Marketing is a competitive space and one of the quickest ways to verify an agency is to look at their credentials – the best agencies will have visible (they are marketers after all) talent in their team and the agency itself will have visible achievements within their area of expertise. Awards, nominations, a high ranking on review websites – these are all things you should keep an eye on as they will give you a sense of how successful the agency is.
3. Communication – Can You Reach Them and Do They Listen
This is a big one. Your relationship with them is important and will most likely be a long-term partnership. When you’re evaluating the agency and what they’re offering you, pay attention to how easy you find it to reach them, how promptly they respond, and how available they’re willing to be to you long-term.
Note how often they’re proposing to be in contact with you when your program is up and running, and what they’re committing to share with you in terms of program monitoring, strategy shifts, and how they will keep you informed on their overall progress. Most importantly, do they actually listen to you and answer your questions thoughtfully? That last one is key.
4. Have They Done Their Research – Are They Thinking About YOU
An agency that gives you a generic sales pitch that is all about them and what they have done for other clients won’t cut it. Their pitch should be about how they can help you and your specific business. They should be informed about your company, your industry, and your target audience.
They should also be asking you questions about what you need, what your goals are, and what your challenges and successes have been. Their ability to identify and solve your problems, is a good indication of they will approach your program and the value they will give you, and your affiliate partners down the road.
5. Strategy Roadmap – How Are They Planning to Get You There
A good agency will provide you with a clear strategy and roadmap for your program. This should be aligned with your goals for the program and detail how the agency plans to move your program towards those objectives. If the plan is well thought out and realistic, it will aim for sustainable, incremental, progress. Be wary of sweeping statements and promises to quickly achieve your ultimate goals, with no actual roadmap to get you there.
6. Publisher Selection and Moderation Capabilities
Identifying and recruiting premium affiliates is a key aspect of your program. So is vetting affiliates who contact you themselves. If an agency doesn’t have details on how they plan to do these things, consider it a red flag.
An even more important aspect to look for is how they will handle any affiliates that misuse your program, misrepresent your business or damage your reputation. Do they have terms and conditions/policies in place to manage this and how will they enforce them? They must be able to give you a clear answer and be ready to get into the details with you on this.
7. Their Affiliate Publisher Recruitment Strategy
Check where they’re planning to look for publishers to recruit into your affiliate program. Ideally, this should be an assortment of sources and not just one or two networks. They should also be looking at several different affiliate types for your program. Finding the best affiliates for your program should be a priority for them and something they have a comprehensive plan for. Unless you’re in a narrow vertical industry, look for variety, as well as quality, in their plan.
8. Added Value – The Breadth of Their Skillset
When you’re evaluating agencies, look at whether they’re a full-service agency or an affiliate-only agency. Ideally, the agency you choose should be able to offer insight and value to your other marketing channels as well as your affiliate program.
Even if they don’t work directly on your other marketing campaigns, a full-service agency will understand how your affiliate program can tie into and support your overall marketing strategy and vice versa. In this way, a full-service agency can offer you added value, compared to an agency that works solely with affiliate programs.
We have covered a lot in this guide and as you can see, there is a lot to consider when you’re choosing the best options to leverage outsourced affiliate program management for your business.
The choice of an affiliate management agency is an important decision, which will profoundly impact the success of your affiliate program. It will also profoundly affect your experience of the program and how much of your own time, money, and effort you need to invest in the program.
Making a carefully considered choice, and doing your due diligence thoroughly, will pay off in the long run. This guide will help you make the best choice for your business and help you maximize the benefits of your affiliate management program.
References and Useful Resources
Consorte Marketing: Affiliate Program Management: In-House vs. Outsourced, Which is Better?
DMi Partners: How To Find The Right Affiliate Management Agency
P2P Marketing: Top 10 Affiliate Marketing Agencies in 2021
Frequently Asked Questions
What does 'outsourced affiliate program management' mean?
Outsourced affiliate program management is when a business uses an external agency to manage their affiliate program for them, rather then trying to manage it themselves in-house. There are numerous agencies that offer this service, both full-scale agencies and affiliate-only agencies. Check out the full guide for more info on who needs to outsource and which type of agency to use if you need to.
What are the benefits of outsourcing the management of your affiliate program?
There are many great benefits to outsourcing the management of your affiliate program. These include:
1. Experience and Expertise
2. Strategy Development
3. Publisher Network Relationships
4. Effective and Efficient Communication
5. Data Analysis and Strategy Shifts
6. Skilled Publisher Engagement
Check out the full guide for more detail on these benefits and how to leverage outsourced affiliate program management to make the most of your affiliate program.
What does an affiliate management agency do?
A good affiliate management agency will manage every aspect of your affiliate program and help you optimize and increase it’s output through:
• Premium relationships with publishers, to ensure that your product is prioritized over your competitors’
• Content creation and media resources for great content and increased exposure
• Ability to develop a sound strategy for your program, to drive growth and profits in a sustainable manner
• Expertise with influencer marketing and other marketing channels that can benefit your program
• Their ability to execute effective publisher recruitment and development, to build lasting relationships that drive results
• Expert data analysis to assess customer attribution and develop precise ways to optimize your affiliate program
• Insight into the best ways to incentivize and properly reward high-value partners to maximize the program’s progress and profitability, in an incremental manner
Read the full guide for more info on what affiliate management agencies do, exactly, and how they will add value to your affiliate program.
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