Creating a customer affiliate program. What does that mean exactly? Let’s start from the beginning.
Referring friends to a small business can be beneficial for both the customer and the business. For the customer, they may receive a discount or some other type of reward for referring their friends. This can create a sense of loyalty and can encourage the customer to continue doing business with the company. For the business, referrals can be a powerful marketing tool and can help to bring in new customers.
Referral marketing has been adopted by brands as a marketing campaign to help drive net new revenue and attribute word of mouth to customers who are already sharing their brand and purchases.
The benefit is real: people are more likely to trust recommendations from their friends and family.
Overall, referral programs can be a win-win situation for both the customer and the business. But, often brands launch referral programs and they don’t drive as much revenue as they expect.
Typically, they offer 10% off in exchange for referring a friend and only a small portion of customers refer.
One thing you can do to fuel word of mouth and drive new revenue: turn customers into affiliates, and treat them as such.
Why traditional refer-a-friend programs fail
There are several challenges that online businesses face when implementing a traditional referral program that incentivizes customers to share with their network in exchange for a small discount.
One of the biggest challenges is getting customers to participate in the program. Many customers may not be familiar with the referral program or may not see the value in referring their friends given the attractiveness of the discount, or whether they want to purchase again in the first place. This can make it difficult to generate referrals and can limit the program’s effectiveness.
Many startups struggle with providing adequate support and resources to affiliates to help them successfully promote the business’s products or services. Without this support, affiliates may not be as effective at generating referrals, which can limit the success of the referral program. For example, incorporating the referral program into re-marketing campaigns and future emails.
So if customers don’t see it as an attractive opportunity to share with their network… why not treat them as an affiliate? Spoiler alert: it works.
What is an affiliate?
But, what exactly is an affiliate?
An affiliate is an influencer, content creator or entrepreneur that promotes the products or services of another business in return for a commission payout on any resulting sales. This is typically done through a referral link that tracks the sales that are generated from the affiliate’s marketing efforts.
Affiliates are typically paid a percentage of the sale price for any products or services that are purchased as a result of their referrals. An affiliate marketing program can be a great way for businesses to expand their reach and for affiliates to earn money by promoting products and services that they believe in.
But, how is this different from a customer that refers their friend?
What’s the difference between an affiliate and a customer who refers their friend?
The main difference between an affiliate and a customer who refers their friend is that an affiliate is typically a separate person or organization that promotes the business’s products or services in exchange for a commission, while a customer who refers their friend is simply a customer who is sharing the business with their friend and is not necessarily doing so for any financial gain.
An affiliate will typically use specialized referral links and may be part of a formal affiliate marketing program, while a customer who refers their friend may simply share the business with their friend through word of mouth or social media.
Overall, the main difference between an affiliate and a customer who refers their friend is the level of formality and the potential for financial gain on affiliate commissions.
So, why not turn customers into affiliates?
Cash is a universal and highly valued reward, so offering a cash commission is an effective way to motivate customers to refer their friends.
Offering a cash commission can provide customers with a tangible and immediate reward for their efforts, which can increase their satisfaction and can encourage them to continue participating in the referral program.
A real-life example: Outway Socks
Outway is a successful eCommerce store that recently decided to implement an affiliate program to drive revenue and expand their reach. Their approach to turning customers into affiliates has become one of the best affiliate programs today. After researching several different SaaS options for hosting their customer affiliate program, they chose Social Snowball because it offered a well-thought-out program that worked for the merchant, the customer, and the business.
The Outway team spent the first week discussing best practices with their dedicated customer success manager and activating important features. They also used integrations to market their program with other marketing tools like Klaviyo to maximize their efforts.
One of the key aspects of Outway’s referral strategy was configuring the right incentives for the right affiliates. They wanted to make sure that affiliates were genuinely motivated and excited to share their love for the brand, so they incentivized referrals with a $15 CAD cash reward. This simple and straightforward incentive was easy for customers to understand and provided a strong incentive to share the brand with their friends and family.
When a new customer made a purchase, Outway automatically generated a unique discount code and shared it with the customer on the post-purchase thank-you page. This made it easy for customers to refer their friends and for Outway to track and reward referrals.
In addition to activating new customers as affiliates, Outway also reached out to their existing customer base and audience to let them know about the program. They sent an email to their email list and built a simple landing page for the program. This helped to activate their existing fans and get them excited about sharing the brand with their network.
By implementing an affiliate program, Outway was able to better measure word-of-mouth attribution and drive significant revenue through referral sales. Overall, their modern approach to affiliate marketing has been a huge success.
The benefits are clear
If Outway’s story wasn’t enough, here are some of the main benefits of turning customers into affiliates:
- Cost-effectiveness: Affiliate networks are a cost-effective way for businesses to acquire new customers through digital marketing. Unlike traditional advertising, businesses only pay affiliates when they generate a sale, so it can be a more affordable way to expand their reach and generate revenue.
- Expert insights: Affiliate partners can provide valuable insights and expertise about the business’s target audience, which can help businesses to better understand their customers and create more effective marketing strategies to increase conversion rates.
- Flexible income opportunities: For affiliate partners, affiliate marketing can provide a flexible and scalable passive income stream. Affiliates can choose which products or services they want to promote, which allows them to work with businesses that align with their interests and values. Additionally, they can earn more money by promoting more products or services.
- Win-win situation: Affiliate marketing can be a win-win situation for both businesses and affiliates. Businesses can acquire new customers and generate revenue, while affiliates can earn money by promoting products and services that they believe in. No matter the medium the affiliate shares on: to their friends, social networks, or even via SEO if the affiliate is a blogger.
How to start a customer affiliate program for beginners
Define your goals
Before you launch your referral program, it’s important to clearly define your goals and what you hope to achieve. This will help you to create a program that is tailored to your business’s needs and that aligns with your overall marketing strategy.
For example, Amazon’s large Amazon associates program
Choose a reward and create your program
To scale an affiliate program, you need an affiliate management tool. For brands using the ecommerce platform Shopify, it’s easy to start a 30-day trial with affiliate platform Social Snowball to start creating your customer affiliate program.
When creating a program, you can set the commission rate for the referrals being made. You can optimize your program over time and change the rewards to generate more affiliate sales. Additionally, overtime you can expand your affiliate program beyond customers to different types of affiliates.
Turn on your program
With each purchase, a customer is automatically signed up to the program in real-time and is given their unique affiliate link or code to share immediately.
With Social Snowball’s thank-you page feature, the coupon code or link is automatically created for each customer and can be displayed on the thank-you confirmation page confirming the customer’s order.
With a cash commission structure, they’re more likely to share with their network of potential customers.
Promote the program
Once you have your referral program set up, you will need to promote it to your existing customers. This can be done through email marketing, social media, or other marketing channels. Make sure to explain the details of the program and to highlight the value of the reward to encourage customers to participate.
You can also use integrations with email marketing platforms and SMS marketing software to promote your program with high-quality designed emails or messages. Using marketing tools that are integrated with your program, you can create automations and campaigns that help encourage referrals and remind program members of their unique link or code.
For new customers, they’ll automatically join your referral program and receive any communications you enroll them in using marketing integrations. One idea: add their unique code or link to their post-purchase thank-you email!
Track and reward referrals
Finally, you will need to track and reward referrals as they come in. This is automatic in your Social Snowball back-end. Payouts can be made to affiliates for referred customer purchases in just two clicks. When you click to payout, an affiliate receives their link to redeem their cash reward in 700+ different options like bank transfer, Paypal, Venmo, Visa gift card, and more.
For full step-by-step tutorials on how to setup your affiliate platform and affiliate dashboard, check out how to use Social Snowball here.
The results are clear
Referral programs can be a powerful tool for businesses, providing benefits such as cost-effectiveness, expert insights, and flexible income opportunities for both businesses and affiliates. Traditional referral programs can be challenging to implement and may not always be successful. To overcome these challenges, businesses can turn customers into affiliates by setting up an affiliate program and providing the tools and support they need to be successful.
By offering a reward and providing adequate support and resources, businesses can incentivize customers to become affiliates and help to drive referral sales. Overall, turning customers into affiliates can be a valuable way for businesses to expand their reach and generate revenue through referral programs.