Oleksandr Rohovnin Content Marketer 17 minute read Table of Contents Affiliate Marketing Parties: Advertisers, Affiliates, Affiliate Networks, and CustomersDo You Even Need Affiliate Software?5 Steps to Your Success With Affiliate Management1. Recruit Affiliates2. Build Relationships3. Track Your Progress4. DiversifyAffiliate Management Diversification Strategies5. Retain Your Best AffiliatesWhat Is an Affiliate Marketing Program, and How To Manage One?Affiliate Marketing Program Key ParametersAffiliate Software – The Focal Point of Affiliate Management5 Undeniable Benefits of Affiliate Software1. Automation2. Scalability3. Commission Calculation and Payment Issuance4. Tracking and Reporting5. Advanced Affiliate ManagementHow To Choose the Best Affiliate Program Software7 Factors To Consider When Choosing Affiliate SoftwareAffiliate Networks vs. SaaS CompaniesKill Two Birds With One Stone!Frequently Asked QuestionsWhat is affiliate marketing?What is affiliate management?What does an affiliate manager do?What is an affiliate program?What is an affiliate agreement?What is the difference between an affiliate program and a referral program?What is an affiliate management system?What is affiliate software?What is white-label affiliate software?What are the main affiliate software features?What specifically does affiliate software do?How much does affiliate marketing management software cost?How to choose the best affiliate softwareRelated posts: Oleksandr Rohovnin Content Marketer 17 minute read How do powerful affiliate networks like Amazon Associates handle hundreds of thousands of affiliates and not fall apart? How do affiliates make six figures without being tricked by their advertisers? How come customers keep clicking on affiliate links? The answer is simple: smart affiliate management. Whether an advertiser, affiliate, or affiliate network, you can grow your income exponentially with proper affiliate management enabled by affiliate software. The right affiliate software suite will automate your affiliate management from A to Z, unlocking new revenue streams and taking existing partnerships to the next level. You no longer have to be everywhere at once but can focus on key strategic decisions. You need a failproof affiliate management system and the right affiliate software to prop it. Source: Influencermarketinghub Without further ado, let’s walk you through the multiverse of affiliate management, starting with the basics. Affiliate Marketing Parties: Advertisers, Affiliates, Affiliate Networks, and Customers Advertisers (Merchants*) Advertisers are businesses or individuals who pay affiliates to promote their products or services. The payment may take any form – usually a percentage of the sale price or a fixed fee per sale – outlined by the affiliate agreement. Affiliates (Publishers*) Affiliates are businesses or individuals who promote advertisers’ products under predetermined conditions, usually a percentage of the sale price or a fixed fee per sale. Sometimes affiliates can delegate promotion to lower-rank affiliates, earning a commission off the latter. Affiliate Networks Affiliate networks connect advertisers and affiliates within an affiliate market that offers better conditions than if the parties cooperated independently. Affiliated customers Affiliated customers are regular customers who can be attributed to a specific affiliate and advertiser, thereby sealing the deal between the two. *Advertiser and merchant are slightly different terms, but it doesn’t matter in the context of affiliate marketing. The same goes for affiliates and publishers. In a nutshell, affiliate marketing works as follows: An affiliate promotes an advertiser’s product by placing trackable affiliate links. Customers click on these links to connect to the advertiser’s product. Upon purchase, the advertiser pays an agreed-upon commission to the affiliate. Want to know more about affiliate marketing? Here is your ultimate guide on affiliate marketing. Do You Even Need Affiliate Software? Affiliate marketing may look simple on paper, but not in reality. As an affiliate network, you have to manage thousands of third-party advertisers and even more affiliates, each craving the best deal. To keep track of such a humongous ecosystem, you need an elaborate affiliate management system with automated affiliate software at the core. Affiliate software automates, scales, and expedites affiliate marketing, granting increased revenues for advertisers, affiliate networks, and affiliates. At the same time, customers get to the sought-after product faster. The boom of automated affiliate program management has invited medium-sized and small-sized players into the game, making affiliate marketing the top customer acquisition channel for around 40% of merchants. Source: Statista Indeed, automated affiliate management is the backbone of successful affiliate marketing. You can’t ignore the all-encompassing advantages of affiliate management tools when everyone else hops on the bandwagon. 5 Steps to Your Success With Affiliate Management 1. Recruit Affiliates To acquire high-intent leads, you need affiliates whose vision resonates with yours. There are two ways to go: attract affiliates on your own or join an affiliate program, each backed by a superior value proposition crafted independently or by your affiliate program managers. To create an appealing value proposition, play to your strengths and the needs and wants of your partners and their audiences. Likewise, you can use ready-made frameworks like the one offered by Harvard Business School and the one below: Source: Peter Thompson 2. Build Relationships It’s one thing to spark interest in your affiliates and another thing to win customer loyalty. Even if you think your pool of affiliates will never run dry, you must nurture relationships with your affiliates. Otherwise, they will abandon you one by one, sinking your business into oblivion. Building relationships with new and loyal affiliates comes down to highlighting your superior value proposition to each of them. On top of contact communication, timely support, and top-notch service, you must offer a scale-tipping extra like a boosted commission for loyal affiliates or a headstart bonus for the new ones. Higher commission rates and access to new products may also be a great way to recognize your partners. Likewise, you can create a multi-tier affiliate marketing system to motivate your affiliates to create second and third-tier networks. 3. Track Your Progress Once your affiliate program is up and running, it’s time to turn to your affiliate program management software for data across three major dimensions: marketing, customer, and affiliate. Any effective affiliate system software will let you know who your profitable partners are and who and why lag behind. But that’s not all. You can reinforce your affiliate management platform with pay-as-you-go affiliate management services like Phonexa. Phonexa’s all-encompassing software suite for clicks and calls – Lynx, LMS Sync, Call Logic, and more proprietary technologies – creates a unified business system where all data is brought to a single dashboard. 4. Diversify As profitable as your affiliate management program is at a given time, you must diversify to stay safe in the long run. In other words, you need more than one affiliate network or program. In fact, 75% of affiliates run three or more affiliate programs. Affiliate Management Diversification Strategies Multiple partnerships Enrolling in or running several affiliate programs will help you stay on the safe side while understanding the market better. Promoting multiple products and using various affiliate software will grow your expertise, leading to better decisions. Multi-tier affiliate program A multi-tiered affiliate program will increase your profits and reduce risk: As an affiliate, you will be able to get a commission off the sale made by your sub-affiliates and can even create tiered sub-networks. For example, a three-tier affiliate program will allow you to run two lower tiers of affiliates. As an advertiser, you will get access to a broader pool of affiliates and spread the word more effectively, leading to more sales. As an affiliate network, you will have motivated affiliates who are likely to expand your network exponentially with no extra effort on your end. Independent affiliate managers Independent managers will allow for informed decisions that do not rely on a single source of knowledge. Well-oiled teamwork in affiliate management benefits all involved parties: advertisers, affiliates, affiliate networks, and customers. 5. Retain Your Best Affiliates Retention-wise, you have to rely on the good old instrument you’ve used to build camaraderie with your affiliates: superior value proposition. Make sure to emphasize perks for long-standing members while also bringing loss aversion to the table. Source: Memecreator What Is an Affiliate Marketing Program, and How To Manage One? Affiliate marketing programs are always at the forefront of affiliate networks, as they contain essential information for affiliates and advertisers. Below are the key parameters to consider when crafting or enrolling in an affiliate program. Affiliate Marketing Program Key Parameters Payment model Besides the most obvious pay-per-sale payment model, affiliates may get paid for clicks, views, impressions, or leads they drive to advertisers. For example, Phonexa’s pay-per-lead affiliate program pays for leads. Leads are potential customers who have completed a target action, such as filling out a form, subscribing to a newsletter, etc. Commission rate The commission rate varies from 1% for stingy programs to 50% for lucrative ones. However, sometimes “stingy” affiliate programs are better because of the advanced affiliate software they offer. For example, Amazon Associates’ commission rate varies from 1% to 20%, depending on the product. Number of tiers Multi-tier affiliate programs allow for several layers of affiliates when a higher-tier affiliate earns a commission from a lower-tier affiliate’s sales. Affiliate software Almost all affiliate programs rely on affiliate software that tracks campaigns and issues revenues. That said, software alone won’t do the job – you also need integrations. Phonexa’s pay-per-lead affiliate program includes a proprietary affiliate marketing software suite and multiple integrations for click and call management. Does pay-per-lead marketing provide a winning formula for business? Learn the answer. Cookie duration The cookie duration establishes how long the link will be valid. An affiliate can no longer receive a commission from the sale after the cookie expires. Likewise, cookies may be used to calculate the commission. For example, some affiliate programs may pay more for the sales made right before the cookie expires or vice versa. Source: Influencermarketinghub While you will mostly rely on affiliate software when managing your affiliate marketing program, choosing the right program in the first place is crucial (or designing one if you’re an affiliate network). On top of affiliate software and the key parameters from the table above, you will need a dedicated affiliate program manager and customizable promotional materials for your affiliates. Affiliate Software – The Focal Point of Affiliate Management Whether you will manage or join an affiliate program, the first and foremost thing to consider is whether the program is backed up by robust affiliate software. Cutting-edge affiliate software will enable all kinds of magic for your campaigns, from instant-snatching high-intent customers from the hands of competitors to selling your leads at the highest price. Source: Imgur So what specifically does affiliate software bring to the table? Below are five significant advantages. 5 Undeniable Benefits of Affiliate Software 1. Automation Automation saves time, increases customer engagement, and unlocks upselling opportunities. Around 80% of marketers use automation, with 77% of them converting more leads to paying customers. What exactly does affiliate software automate? Affiliate campaign tracking and attribution Commission calculation and payouts Customer distribution and post-purchase analytics Up-to-date affiliate software automates everything that can be automated within the current level of technology. That said, endeavors like content creation or strategic development will still require a human touch. 2. Scalability As the number of your campaigns grows, you will no longer have the time and capacity to manage things manually. This is how you know you need affiliate software. Luckily, almost any affiliate software can easily handle hundreds and thousands of affiliates across numerous affiliate marketing campaigns, allowing for near-infinite scalability. 3. Commission Calculation and Payment Issuance Would you get frustrated if you don’t get paid on time? So would your affiliates. At the same time, you don’t want to overpay just to please your partners. Affiliate software will instantly calculate affiliate commissions and streamline the payment process, issuing payments automatically at a due time. Likewise, it will consider countless minute details, such as the payment schedule, lock-in period, or payment model and commission structure, to optimize the payment process. The right affiliate software will enable a fair revenue distribution model that reflects your affiliate agreement. 4. Tracking and Reporting Automated tracking and reporting – the cornerstone features of affiliate software – will help you unmistakably connect customers to affiliates and issue due revenues for their efforts. Affiliate software will unlock three major data sets: Customer data – demographics, psychographics, interactions, history of purchases, etc. Affiliate data – clicks, conversions, commission rates, traffic quality, etc. Marketing data – traffic sources, traffic triggers, marketing performance, etc. And if you want to go the extra mile, you can incorporate your affiliate software into a comprehensive lead management system like LMS Sync. It will unlock the full potential of your leads through refined lead tracking, distribution, and analytics and help you open up new revenue streams. 5. Advanced Affiliate Management From managing banner ads to issuing payouts to searching for new partners, affiliate management comprises many aspects that require automation. Affiliate software does everything an affiliate manager does manually but incomparably faster and more precisely. Imagine running an online store with an affiliate program as an additional traffic source. You may handle both tracking and payments manually in the first place, but not when you grow to dozens of hundreds of affiliates, each one with specific needs regarding promotions and payment methods. The right affiliate marketing software will support your affiliate management system in every dimension so you can allocate as much time and resources as different marketing aspects objectively require. On the one hand, you won’t overcommit to less important tasks; on the other hand, you will have more time for key strategic decisions. Did you know lead management software can bring you back in the driver’s seat of your business within just one quarter? Unlock ways to get back on track with lead management software. How To Choose the Best Affiliate Program Software Affiliate marketing software can revolutionize your business, but not all affiliate solutions are the same. Some are standalone, whereas others integrate with third-party affiliate tracking software and lead management solutions. Some enable multi-level marketing, whereas others work best for a specific marketing channel like social media or email. So how do you choose your best affiliate management software? Below are seven major factors shaping affiliate software as a major tool for affiliate management platforms, referral programs, and affiliate programs. 7 Factors To Consider When Choosing Affiliate Software Integrations A narrow-focused affiliate software solution – say, one to manage affiliate links – won’t satisfy you for long. Sooner or later, you will need a system that covers all your campaigns. In other words, the more integrations your software supports, the better. Phonexa’s link tracking solution, Lynx, smoothly integrates with third-party and proprietary software, such as LMS Sync and Call Logic, to manage clicks and calls from a single intuitive dashboard. Features A feature-packed affiliate software suite will allow you to effectively manage your affiliates from the get-go without relying on integrations too much. Here’s an example of an affiliate software toolkit: Link tracking to measure clicks and conversions for different affiliates and traffic channels. Real-time analysis for immediate decisions and effective lead trade. Journey control to deliver customers to relevant advertisers in the shortest time. Advanced targeting to hit the most profitable partners within your campaigns. The more built-in features your affiliate software incorporates, the more effective it is as a standalone solution (integrations are still necessary, though). Customization Segmented campaigns draw 760% more revenue, making customization indispensable for quality affiliate management. From creative materials to the commission structure, your affiliate software must allow you to tailor your campaigns to different demographics, psychographics, needs, and wants so you can nurture each individual relationship. Real-time Reporting While many affiliate software suites offer post-campaign analytics, not every solution can update you on the fly. But that’s what you need. Affiliate software with real-time reporting and adjustment enables: On-the-fly optimization Accurate affiliate tracking Improved decision-making Increased transparency Fraud protection Real-time reports will increase the conversion rates at every touchpoint by unveiling the customer’s persona beforehand. Technical Support From setting up your affiliate software to troubleshooting issues, you must have a team of professionals for support. Look for SaaS providers that guarantee quick assistance across many communications channels. Security With data loss and leakage being the biggest cloud security concerns, choose a solution that employs robust security technologies: encryption, fraud detection, two-factor authentication, and a redundant internet connection and power supply. On the other hand, ensure that security doesn’t come at the expense of ease of deployment or ease of use, two critical aspects of choosing affiliate software. Pricing Pricing is important yet misguiding at times, as it does not always reflect the value of specific software. Instead of hunting for the cheapest solution, review the features and integration each option provides. Phonexa’s affiliate management software suite – available through three pricing plans – includes an exhaustive set of click and call management solutions. For only $100 a month, you can solve all your marketing challenges, from lead generation to affiliate link tracking. Conversely, isolated solutions can be good for specific goals but may not fit your other business objectives. Affiliate Networks vs. SaaS Companies Whether to manage your affiliate program in-house or delegate it to an affiliate network will be a key strategic decision for your business. To make things simple, use this criterion: Go for an affiliate network if you want a turnkey solution with no obligations. Go for a SaaS solution if you want to be in the driver’s seat of affiliate management. SaaS software suites are a superior choice overall, but you may not have enough resources to run such a system. On the other hand, an affiliate network will give you access to a gigantic pool of affiliates with little to no action required on your side. Source: Influencermarketinghub But what if you could get the best of both worlds? Phonexa offers just that. Kill Two Birds With One Stone! Revolutionize your affiliate management with Phonexa’s all-in-one software suite comprising Lynx, LMS Sync, Call Logic, and other groundbreaking solutions for click and call management. And if you want to delegate things while still leveraging Phonexa’s proprietary affiliate and lead management software, consider enrolling in a pay-per-lead affiliate program. Get your favorite software suite now, or schedule a free consultation to learn more about Phonexa’s solutions. Frequently Asked Questions What is affiliate marketing? Affiliate marketing is a business cooperation in which advertisers buy customers from affiliates in exchange for a commission or a fixed reward. The competitive nature of affiliate marketing has led to the emergence of automated affiliate management software suites that help advertisers and affiliates manage their campaigns. What is affiliate management? Affiliate management is supervising, controlling, and regulating partnerships between affiliates, affiliate networks, and advertisers.The term affiliate management usually pertains to affiliate networks and advertisers managing their affiliates, but it sometimes can relate to affiliates themselves, as they may also have sub-affiliates to manage. What does an affiliate manager do? An affiliate manager supervises affiliate campaigns and programs from start to finish, whether working for an affiliate network or advertiser. The scope of work of an affiliate manager includes searching for affiliates and affiliate networks, creating affiliate campaigns, monitoring affiliate performance, informing senior management about affiliate sales, and more. What is an affiliate program? An affiliate program is a set of rules and conditions regulating cooperation between advertisers, affiliate networks, and publishers – or only between two parties. What is an affiliate agreement? An affiliate agreement is a legal contract between an affiliate and advertiser – sometimes also involving an affiliate network – that regulates payment terms, commission rates, marketing instruments, codes of conduct, confidentiality, and indemnification, among other nuances. What is the difference between an affiliate program and a referral program? Affiliate and referral programs are both marketing programs that incentivize different individuals to promote a company’s product. However, referral programs encourage existing customers, whereas affiliate programs encourage affiliates, who are rarely the advertiser’s customers themselves. What is an affiliate management system? An affiliate management system is a platform – usually powered by affiliate software – that helps advertisers and affiliate networks (and sometimes also affiliates) manage their affiliate programs.Most affiliate management systems integrate with tracking and analytics software. For example, Phonexa’s affiliate software for business integrates with click tracking software, lead tracking software, and the proprietary Pay-Per-Lead affiliate program to create a coherent customer management ecosystem. What is affiliate software? Affiliate software is a cloud-based toolkit for managing affiliate marketing programs standalone and through integrations with lean management software. What is white-label affiliate software? White-label affiliate software can be utilized under the business’s flag while being run and maintained by a third-party provider. In other words, you can rent white-label affiliate software and customize it for your business while only paying a small monthly fee. What are the main affiliate software features? Affiliate management software features include various functionality that helps manage affiliate marketing campaigns. However, a standalone affiliate software suite is rarely enough to cover the full needs of an advanced advertiser or affiliate network, which is why it’s reasonable to choose software that can integrate with other software.If you can’t wrap your head around your affiliate program software, contact Phonexa experts for help. What specifically does affiliate software do? The scope of functions with affiliate software is humongous, including:– Affiliate link tracking– Affiliate performance tracking and real-time reports– Commission management– Affiliate recruiting management– Compliance and fraud preventionAffiliate software does exactly what marketers did manually at the dawn of affiliate marketing but much quicker, more accurately, and without consuming your resources except for a small monthly fee. How much does affiliate marketing management software cost? The cost of affiliate management solutions varies depending on the features, but you don’t even have to buy one. You can rent the affiliate solution you need from multiple cloud providers while sometimes getting helpful integrations on top of standard affiliate management tools.For example, Phonexa’s affiliate software is rented out as part of an all-encompassing software suite for click and call management. For only $100 a month, you can rent a comprehensive lead management system that will drive your business to success. How to choose the best affiliate software When choosing affiliate marketing solutions, consider whether a particular software suite can help you manage your affiliate campaigns and scale as the numbers grow. Specifically, examine these seven dimensions: integrations, features, customization, real-time reporting, technical support, security, and pricing. 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