Benefits of setting up an affiliate program in your business

Jason Hulott Speedie ConsultingIf you are reading a publication like this, chances are you know what an affiliate program is, but for the avoidance of doubt, to me, an affiliate program is simply a mechanism where one party, an affiliate is paid for referring traffic or sales to a merchant (in this case you).

Why setup an affiliate program

In this article, I want to take a look at why a business should consider adding an affiliate program to their marketing strategy. First, let’s take a look at the numbers…


There are numerous stats on this market. Here are a few highlights…

According to Practical eCommerce 86% of brands and 84% of publishers (affiliates) leverage affiliate marketing.

A Forrester Consulting study predicts that by 2020, affiliate marketing spend in the US will rise to $6.8bn (Billion with a B – not a million with an M).

In the UK affiliate marketing spend in 2017 was £554 million. This spend generated £8.9 billion in sales, which means for every £1 spent on affiliate marketing, it returned £16.

So the stats help give you a flavour of the sales potential in affiliate marketing, but what other benefits should you take into consideration.

A warning!

The only thing I would suggest is that new businesses don’t use an affiliate program until they understand their site conversion levels and how well their site performs. Admittedly this can only take a few months of PPC spend to figure out, but don’t think you can launch a new business out of the gate without understanding how well your site performs.

With that out of the way, let’s take a look at other benefits

Risk / Reward

Now depending on how you set up your commission structure and payment terms, this can be a low risk channel. Only paying the affiliate when you have been paid by the customer – i.e. on a cost per sale basis. This is not like any other marketing channel is that regard.

Yes, you will have to be mindful of clawbacks, but these can be factored into your structure and terms. You can also set up your program on a cost per lead (CPL), cost per action or cost per click (CPC).

Increase traffic diversity

Having an affiliate program means you can attract affiliates with different traffic sources. So you could have high trafficked blogs, other brands, email affiliates, and social media platforms promoting your business. With a variety of traffic sources, you are protecting your business from the potential impact in losing one traffic source. An affiliate program can act like a traffic insurance policy.

Bringing skills into your business on a cost per sale basis

Like we discussed above, you can, depending on your setup, bring in affiliates that are skilled at driving traffic in particular ways. For a small business, this can be a godsend to suddenly have affiliates take care of PPC, or social, or email, or even content marketing, if these are not your strong points. All while paying them on a cost per sale basis.

Bonus benefits – brand building

Another benefit for a business running an affiliate program that gets overlooked is an increase in brand awareness. Having your logos and product information across multiple sites gives you awareness. This can lead to more direct traffic for search engines and more potential type in traffic.

What you can do with an affiliate program?

So now I have shared some benefits of running a program, let’s take a quick look at what we can do with one to benefit our business.

Now clearly you can drive sales but if you don’t have a retail site or sites that converts online then you might need to look at other options or combination of options. So you could look to offer:

  • A cost per lead program – pay for email inquiries or leads
  • A cost per call program – yes get that phone ringing
  • A cost per action – which could be a newsletter sign up or lead magnet download
  • A cost per app install and activation

Or running a combination of all these things are a great way to maximize the effectiveness of your affiliate program.

How to set an affiliate program up

There are literally books written on this subject (in fact, I am writing one myself right now). But for this short article, there are two main ways;

  • In-house – you build an affiliate tracking platform for your business or you buy an off the shelf package to manage your affiliate program. All you need then is to go out and get affiliates.
  • Affiliate Network – you sign up to an affiliate network that has all the tracking software already running also has affiliates all ready and waiting to join your program.

Let’s take a quick look at the pros and cons for each option. Remember this is a quick look but these tend to always work out as the deciding factors people choose which way to go with setting up their program.


Pros: cheaper to set up, gives you full control, builds a private network and with no network fees, this allows to you pay affiliates more.

Cons: no affiliate network so can take longer to start to see results as you need to recruit affiliates.

Affiliate Network

Pros: built-in affiliate network; access to various affiliates; and can see sales quicker.

Cons: higher setup costs and higher pre-sale fees due to network costs.


Hopefully, you will see that affiliate marketing can be a great way to take your business to the next level. You will need to give some thought to the best way for you to run your program but you will see the benefits are worth the investment.

About the Author

Jason Hulott is Director of digital agency Speedie Consultants and has been running client affiliate programs since the late 90s. He is currently running an affiliate consulting business called the Affiliate Dojo, he aims to help businesses maximize affiliate programs, both in terms of running a program and promoting other people’s products and earning commission as a sway to maximize revenues. Find him on Facebook.