Are SaaS affiliate programs working
Affiliate program or affiliate network?
If you want to market your online product or service, you cannot avoid a partner program in addition to the possibilities of SEO and SEM. In this article, Christian Häfner from FastBill explains why an affiliate network is not always the best choice and how the relaunch of the FastBill partner program led to more paying customers.
Why switch from the affiliate network to your own partner program?
In principle, affiliate networks have the advantage that broad coverage can be achieved very quickly. As a small and unknown company, this advantage is not insignificant. However, the advantages are not only associated with wastage, but also high costs. Above all, however, it was the wastage that made us think and moved us to change the partner program. After several years of partner program at Adcell, we were not (no longer) convinced of the quality of the leads we received. In the end, we counted 850 affiliates, of whom just under 3% generated leads at all on a regular basis. However, since we fundamentally believe in recommendation marketing, the goal for a change was clear: more quality (sales), traffic is secondary.
The old model was based on a lead / sales basis and, despite a commission of € 15 per sale, resulted in only a few additional sales. Most affiliates limited themselves to displaying a banner. That someone really dealt with FastBill or the topic in terms of content remained the exception. Therefore, the partner program should be rethought and the quality increased. We wanted more intensive support and more flexible organization for the affiliates that are relevant to us. The focus should be on qualitative recommendations, no longer on distribution and traffic.
The good get a lot, the bad get nothing!
A good affiliate program is based on good recommendations that lead to good (paying) customers. Everything else is irrelevant. After all, entire sales networks also live from this. Only a few weeks ago I had the opportunity to be a guest in a sales network with 40 entrepreneurs. In a total of 2 hours, recommendations for new business and sales for past recommendations were exchanged on small pieces of paper. The applause after every increase in sales through the network strengthened the group again and again. The special thing about it: Those who do not recommend and help generate more sales will be thrown out again in the medium term. A tough but effective principle.
Our new partner program should work in the same way. But the conditions were not met in the affiliate network. Our old model was inflexible and expensive. Despite the fact that we pay above-average high commissions in our industry (€ 3 / lead, € 15 / sale), this was only moderately successful.
Due to the moderate quality and the high wastage, we ultimately decided against an affiliate network and for an individual, own partner program based on zFerral. Although we lose a lot of reach, we are in a position to offer significantly more attractive commissions and more flexible conditions. The biggest difference, however, is that we only distribute commissions on a sale basis. Free test registrations will no longer be reimbursed. But beyond that, the advantages are also obvious:
- Higher commissions (between € 24 and € 235) possible for the "good" partners (or 10% lifetime)
- No risk, as only sales are remunerated
- Offline advertising with coupon codes possible
- More transparency for the partners
- No more spammers or fakes.
- Fully automated processing via zFerral
Why 100 good partners are better than 1000
Every website owner who signs up with an affiliate network has the goal of making some money on the side. In very few cases this should still work really well today. The main reason for this is that pure banner advertising works worse and worse. The range of banners is growing and the content of the website and advertising do not always go well together. Real education and active recommendations are rarely carried out. In the end, a customer does not receive a real recommendation, but clicks intuitively. For the visitor this means that he still has to be convinced on the target page from almost zero. External trust is more valuable than being addressed on the product website. An example: A product is highly praised and advertised by its best friend. The willingness to try it out (or pay for it) is probably higher than with a casual visit to the website.
The right incentives help to ensure that the product is advertised and recommended so intensively on the advertiser's website. Either the advertiser is very convinced of the product or there is significant added value (e.g. money). The challenge was no longer to produce the most beautiful advertising material, but to find the right partners and provide tools. Bloggers are - if at all - only a small part of the target group. In fact, however, it is multipliers who fit in well with the product from their daily business. E.g. a baker shouldn't sell watches, but rather good baked goods. A tennis instructor shouldn't sell sailboats and if the tax advisor or founding coach recommends FastBill for the paperwork, then trust is more effective than any banner we can create ourselves.
New partners, new challenges
Really successful partners are those who regularly generate paying customers. Everything else is secondary. It is therefore important to describe the target group of potential partners as well as possible and to provide them with the necessary tools. In the case of FastBill, the greatest challenge is certainly that the "good" partners rarely act online and therefore have to be equipped with very classic (offline) options. If you give a traditional tax advisor a referral link, for example, he will not be able to achieve much with it. Adapted and new tools are needed that go beyond the possibilities of a classic affiliate network.
Basically, people who have to deal with the potential target group professionally are ideal partners. Once they have been won over by the product and acquired as partners, nothing stands in the way of a successful partner program. In the end, 100 partners advertise significantly more sales than the 1000 network affiliates before.
Christian Häfner is managing director and responsible for marketing and the development of cooperations and partners at FastBill. As SaaS (Software as a Service), the company offers a web-based complete solution for a paperless office. The digital billing of services and products of small companies and self-employed includes all necessary features such as the management of offers, writing invoices, customer and product management up to time recording and liquidity overview.
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