Hi, and welcome to the Affiliate Insider Podcast with me, Leanne Johnston. This is a podcast for digital and affiliate marketers. Listen up as I explore the latest digital and affiliate marketing trends and give you the insider scoop on what's occurring in affiliate marketing. Join us as we explore affiliate strategies, host expert interviews with leading affiliates and tech entrepreneurs, and discuss the latest affiliates and digital marketing trends. If you want to stay at the cutting edge of affiliate marketing, you're in the right place. Join me for this week's episode and let's get started.
SPEAKER_00If you're looking to launch an affiliate program but aren't 100% sure where or how to start, put your best foot forward and book a free agency call with us today. Affiliate Insider offers a range of agency services from strategy and consulting to technical integration, affiliate recruitment, and in-depth program audits. Our team will help you plot the right course, save you time to launch and scale a successful affiliate program and strategy. As one of the UK's top 50 rated agencies as ranked by the Drum's Digital Agency Centre, we've helped hundreds of brands launch and grow multi-million dollar programs across a range of industries. Why not book a free scoping call and let us help you expand your reach with successful affiliate marketing? Visit affiliateinsider.com and click on agency to find out more.
SPEAKER_04Welcome to Affiliate Insider's Affiliate Marketing Podcast. And today I'm absolutely thrilled to have Raj Mija, the CMO from Reversion, joining us today to talk about affiliate marketing around the world. Hi, Raj.
SPEAKER_01Hi, how are you? Thank you for having me.
SPEAKER_04I'm very well. Thank you for being on this podcast today. Now we've got a really interesting discussion to kick off. But before we start I just wanted to ask you to tell our listeners a little bit about Reversion Weave from and how you landed up working in affiliate marketing, because I always find that that's the most interesting story to begin with. So give us the give us the headline.
SPEAKER_01Yeah, so I live in the US. Obviously, you can tell from my accent. I'm in uh New York. And uh, you know, it's been an interesting path getting to Reversion as their CMO. You know, I started my career at a company called GoDaddy, spent 10 years there, uh, took it through uh a buyout and IPO, ran various, various things, but mostly product. After that, went to a company called YXT in New York for four years, took that company through an IPO, uh, and then ended up in e-commerce, worked with a company called Yachtbow, okay, which um, you know, we scaled up and it's about to go public as well. Uh, and they do the, you know, I fell in love with e-commerce when I joined Yachtbow. And um, you know, I'm familiar with Shopify, I'm familiar with everything going on with direct to consumer and the movement towards direct to consumer and how performance marketing was changing. And uh, you know, Refersion ended up being kind of uh serendipity for me. You know, I met the folks at Assembly that owned Refersion, end up meeting the founders of Refersion, and they're just like good people. And uh, you know, I wanted to everything, every time I do something, I try something different. So affiliate marketing was one where, you know, I heard uh both sides of the fence, which is like it's great. Oh, it needs this, it needs that, which to me is always when people say that there's always opportunity. So Reversion was a way to not only create a new category for us, but then also educate the market on, you know, how e-commerce has modernized affiliate marketing. Yes. And how e-commerce brands of today that are on Shopify, BigCommerce, Salesforce Commerce Cloud, all our partners, how they are doing affiliate marketing and what derivatives they've created that are descendants of affiliate marketing. And uh basically uh a way for us, a way for me to at least create a new category and a brand around the modern version of affiliate marketing.
SPEAKER_04Well, that's a super interesting story and loads of experience. So thank you very much for being with us today. So, as you know, our theme for this season is affiliate marketing around the world. And the US is probably one of the leading marketplaces for it. But I mean, I've been in the industry almost two decades, and I know that affiliate marketing was definitely hot when I entered the industry in your neck of the woods. So being one of the most established markets that have embraced affiliate marketing early, um, there's a lot of things, a lot of learnings that we can have over this time. And I like to reflect back a little bit as well, because for new digital marketers coming into this industry, they don't have that history of where we've come from. And also, obviously, you guys being a SaaS product that brands use in the e-commerce space. And we'll talk a little bit about some of your brands as well because I'm quite keen to dig under that. Where do you see some of the main things that brands need to know about targeting customers in the US via partner relationships versus some of the other countries, like here in Europe, for example? Where do you see opportunities at the moment for brands looking to expand into the US market using performance marketing as the key channel?
SPEAKER_01Yeah, I think the US is predominantly a lot of e-commerce brands that have gotten going and largely just because the expansion of Shopify. Uh Shopify has grown uh, you know, 10, 20x, and COVID has accelerated that even more. A lot of traditional brands, retailers, everybody that was offline and all online, uh, the TAM, you know, total addressable market that we thought was big has exploded. Um, you know, Shopify's gone from a $20 billion company to $200 billion. And that in itself has created a lot of opportunity for tech solutions and tech platforms like Reversion and the industry like affiliate marketing, because what used to be very much like B2B, B2C, you work with networks like Skim Links, uh, you work with uh you know a few other uh affiliated networks has, I think it's it's changed a lot in the sense that influencer marketing has become a great complement to affiliate marketing. And then the whole concept around brand ambassadors, which is largely a democratization of word of mouth and scaling word of mouth through your most loyal customers, fans, and followers. So I would say in the US, definitely this has taken off all three types of programs. And by three types, I mean the brand ambassadors, the influencers, and uh the traditional affiliate marketers, which are largely editorials, PR, blogs, websites, you know, something like a recipe site. Uh, there's been a big expansion of how we define affiliate marketing in the US. And I think that's something that'll now permeate and penetrate other markets as well. I feel like this is definitely happening in the UK. Um, you know, if you think about where a lot of affiliate marketing is happening, US is definitely the leader. And I was talking about the like English-speaking countries, predominantly English-speaking countries like US, UK, Canada, and Australia are usually the biggest adopters. And then it starts uh permeating other countries and other regions. So, from a maturity aspect, you know, those are usually the first four markets that you want to play in because they're also very mature when it comes to e-commerce as well. So if you're doing any type of targeting, any type of outreach or expansion, you know, you should really look into those four markets.
SPEAKER_04And you touched a little bit on something that's quite interesting, which is the fact that the affiliate ecosystem is becoming more complex because we've got ambassadors and we've got influencers and we've got traditional publishers. We've even got big uh media companies that are coming into the performance model as well. So huge digital media companies that are wanting to work with brands on a performance model versus just paid media. So, how do you see that performance model heading as we implement more towards data-driven decision making behind affiliate program strategies? And what should brands be looking at in terms of their tech stack and their tech partners to drive those decisions forward in a cohesive way with all of the other digital channels that they're currently, you know, marketing to?
SPEAKER_01Yeah, no, that's a great question. And uh, you know, I feel like every day the TAM changes, more customers, potential customers come online. And uh, you know, when we think about the performance model, how it's shifting, you know, eMarketer in uh I think it was June of 2020 did a survey of uh, you know, what is the number one problem that brands face when it comes to like influencer marketing? And that I was measurement. Yeah. Um when you think about how consumers find brands, 84% of them, I think Octane AI did this in May of 2021. 84% of consumers find new prints through personal recommendations.
SPEAKER_04Absolutely.
SPEAKER_01And when you think about, you know, the size of affiliate marketing in just the US alone is $56 billion. When you talk about performance marketing, when it comes down to that, you know, it really comes down to like how do you do tracking, reporting, and payment technology within affiliate marketing. That in itself is worth that market is worth about 424 million. And it's supposed to grow to up to 2.29 billion in five years. So just that subset within affiliate marketing, and when you say performance, you can't track performance without having accurate tracking, accurate reporting, and the right payment technology. That's worth half a billion dollars to just today. And that's where we really play with Refersion. My advice to any brand that is getting going in this or working with somebody or doing anything in affiliate marketing, if you have a mature program, new program, whatever it is, is to make sure that your tracking is solid.
SPEAKER_02Yeah.
SPEAKER_01Um, and this is largely because so much stuff has changed with privacy, with Apple implementing privacy changes. Google delayed it a bit, but it's coming. Third party cookies are being restricted. So when you think about that, you want to pick a vendor, hopefully not a vendor, but a relationship with a technology partner that has first party tracking. I think that's something that, you know, this is before my time and the boundaries of reversion, you know, they must have had amazing foresight or luck that, you know, first party tracking was part and parcel of all this. So make sure that anybody you work with has first party tracking and they're not relying on outdated stuff like cookies because that's not giving you very accurate attribution. And if you're paying your influencers, affiliates based off of inaccurate attribution, you're gonna create a lot of unhealthy relationships where they expect X and you're delivering Y, and it's usually less payments compared to what they expect. So I think one of our biggest things when it comes to performance models is you can do a lot of different things, all these things, but the underlying measurement needs to be very accurate because you don't want to break any trust with your affiliate partners at the end of the day, because they do this in order to get paid. And if they're not getting paid the right amount, if they're not getting paid at all, that's something that we're seeing become a huge problem in just affiliate influencer marketing, where uh, you know, somebody expects $10, like $100 and they're getting $50, or they're just not getting it at all because the platform or the technology didn't see that sale happen. For us, it's you know, it's a key for every platform that you work with, technology partner that you work with, to also be natively integrated. You know, for us, it's an e-commerce solution. If you work with a technology partner and you you're maniacal about performance marketing, yeah, make sure they can track performance by being integrated with Shopify, being integrated with Big Commerce, being integrated with Salesforce Commerce Cloud and certified as well, so that you know that that integration is on the back end through APIs and technology, and it's not just somebody downloading a sheet and uploading a sheet because that's one thing you don't want to do. Yeah. And everything should happen automatically in that sense. So first party tracking, definitely is first and foremost. Second is you know, native integrations with all these commerce platforms that are now driving, you know, majority of the TAM and at the end of the day, the GMV of the industry.
SPEAKER_04Yeah, absolutely. Totally agree with that. Now, one of the interesting case studies that I read on your website just before you popped onto this uh podcast today was about a brand called Pure Vida and I've spoken about them before and the fact that they've taken their affiliate program strategy and pivoted that to embrace their customers and as ambassadors. And I want to talk a little bit about the psychology behind dealing with ambassadors versus dealing with traditional publishers or affiliates. Um, talk us through like what PuraVida did and what their vision was and how that actually translated into incremental sales for their business. Because it really is an interesting case study. So I'd like I'd like to hear it from the horses' mouth, the people that helped them to do that. So talk about listeners through that kind of transition that Pure Vita did from pure performance to embracing ambassadors as part of their affiliate channel.
SPEAKER_01Yeah, and I'm a huge fan of Griffin. Griffin Thal, who's the founder, co-founder of Ravita. I've been working with him since I was at Yappo too, and then when this first started. What I love about Griffin and their team is that once they pick a technology partner, they stick with them. They help them grow, they help them learn, they help them get better. They did that with Yappo, they did that with the Refersion. They've been a customer of Refersion for almost five, six years. Same thing with Yachtbo. So, what I love about them is that they think of technology partnerships as relationships.
SPEAKER_02Yeah.
SPEAKER_01And, you know, they have grown up and they've also helped the technologies grow up at the same time. So that's an outlook that not a lot of people share. And I I wish that more people shared that in a market like this where everything is changing constantly. Think about how much we went through COVID. Yeah. Uh if you have a partner that can learn with you, grow with you, and make changes to help support your business, that first of all is a great trait of any type of founder.
SPEAKER_04That customization is often required in programs that want to scale and really embrace the channel. Because from even from a management perspective, from a program management perspective, I kind of want to tell people your affiliate tracking solution is for keeps. Like it's not just for Christmas. Okay. So you need to kind of get in there, get under the nuts and bolts of it because it really is the vehicle that drives your program and your relationships forward.
SPEAKER_01And I think what they did different is that they they committed to it, right? They committed to it. They they wanted to try out a bunch of different things and they had a technology partner that was willing to try it with them. You know, so you have somebody actively coding and helping out with features as the market is getting going through from nascent to more mature. You know, what I what I love about them is that, you know, they they really pioneered the concept of brand ambassador marketing and doing it at scale. And just for your audience, I want to really lay out what the three types of programs really mean because I think that we need a lot more transparency in this market about what is ambassador, what is influencer, what is affiliate.
SPEAKER_04And how to deal with each. Let's let's dig into that.
SPEAKER_01How I look at brand ambassadors are, you know, this is how you leverage grassroots evangelism and how you build a community of loyalists. And with brand ambassador programs, you can really keep your brand ambassadors motivated with things like store credit, cash, or merchandise rewards. It's not always commissions with these folks because they are so loyal to you that they'll be happy with some sort of credit, they'll be happy with some kind of swag, or just, you know, like 5% commission or 2% or 3% commission. It's one of the most scalable ways to grow because Purabita has 140,000 grand ambassadors on Reversion.
SPEAKER_02Yeah.
SPEAKER_01And we make it just damn simple for them to be able to manage them, get them into the system, manage them, and then track them. Imagine if you were to do that with a Google Sheet or Excel. It's just not possible. So they took basically their social following and the community that they built, and they decided to monetize it, but they did it in the right way. They really said, okay, we have a community of loyalists, but this is how we're going to monetize our reward. Now, other brands, they're like, okay, maybe that's not the right thing for us because community is not something that we're doing. We want to work with influencers, but let's really define influencers. When you partner with like the megastars or uh professional creators, and they're maybe more relevant nano influencers or microinfluencers. But the key thing they help you do is that they help you facilitate long-term and sustainable relationships. So what we're seeing less of in influencer marketing now is paper post. What we're seeing, the good brands are the differentiating themselves from others, is that they're working with professional creators. And that's what they want to be called. They want to be called professional creators because this is their business, this is their livelihood. And they usually have a staff. They have somebody doing their edits, somebody doing photo shoots, somebody doing the campaigns. And these are legitimate businesses now. And they're they're working with brands on multiple campaigns, product launches. They usually do like six-month deals, 12-month deals. And the beauty of that is that you get to learn a brand, you get to espouse their values, you get to grow with them, you get to give them your feedback. And, you know, you're basically tied in to their performance as well. So that's how we see influencer marketing is basically the professional creators uh that are maybe huge reach or could be like 50,000 or 100,000 followers. Affiliate marketing, you know, pretty traditional. How we look at that is, you know, the PR, editorial promotions, uh, industry-specific blogs, like if it's health and wellness, it's a celebrity trainer. If it's food and beverage, it's a celebrity chef, or somebody that's just great at SEO and they have a great blog, right? But the point there is that, you know, you're rewarding the affiliates and the publishers with uh commissions and it's a different type of relationship, but those customers are largely in market because they're reading something very relevant. Ambassadors help you uh, you know, tap your existing market, tap your loyal market. It's a it's a great way to drive retention, but monetize retention. Influencers, the professional creators, help you really go after and go reach new audiences.
SPEAKER_04Yeah, finding the niches.
SPEAKER_01Affiliate marketers, the publishers of the world help you get people who are in market right now. Yes. Because they're reading something very relevant because they're what is, how is, why is, and it usually starts with the Google search. So that's how we look at all three of these. And what Pura Vita did was they came in and redefined ambassador marketing, where it used to be you'd go to a college, sign up a bunch of kids, they'd help promote you to anybody can be a brand ambassador now. You go to the Pura Vita website, you sign up, you're immediately an ambassador. Here's your kit. You can start promoting us, you can start getting paid, and you can get paid in bracelets, you can get paid in cash or store credit, right? And that was the beauty of it. And everybody's like, well, I don't have to be at a campus anymore to do get any of these benefits. Anybody can be a brand ambassador.
SPEAKER_04So there's definitely scale that's available, especially if you're a brand entering a new market and you have an existing customer base that is loyal already to your brand, but there's that scale that can happen with ambassador marketing. But what is it that you need to get right in order for that channel to work? Because I mean, they spotted an opportunity head on in a market that's still nascent, I would say, in the world. Um, ambassador marketing isn't as prevalent in other regions as what it is in the US. And obviously it's scams. So if we had to think about ambassador marketing in India, for example, where you've got hundreds of thousands of people that can join this, what are the things that a brand needs to get right in order to really tap into that community and and make their program relevant for them?
SPEAKER_01I think it starts even before affiliate marketing. I think what what is community to you? What have you done to nurture that community? Uh, what are your brand values? Okay. You know, if it is India and you are doing something like bracelets, like Rocky is a great, like I'm wearing a bracelet like now that my sister put on me. Um, you know, I could see somebody like the Pura Vita of India or even Pura Vita really tapping into that, saying, we make bracelets for Rocky and look at how we promote Rocky, and it's a holiday that we enjoy. And then here's the brand ambassador, Indian brand ambassadors that are going through their Rocky, the story of a brother and a sister and how how it all comes together. So basically, you have to also be cognizant of the cultural values, of the local cultural values. And then if that's that's what you want to do, then you build a community around it, right? And you promote that and you espouse those values. And with something like this, then you would, you know, you would double triple down on the concept of this holiday. And, you know, when it comes around to that holiday, your activation is basically everything about that. And the rest of the year, you're kind of priming the pump around it.
SPEAKER_04So it's less about promotion and more about engaging in storytelling, which I think is something that many affiliate managers are actually realizing right now. You know, they're building, especially in the gaming industry. I mean, we're seeing a lot more gamification, we're seeing a lot more brand affinity around the affiliate program, not just around the product for the customer. So, really understanding your affiliates as a community and getting in there and understanding how can you actually plug the gaps and how can you problem solve for whatever channel it is that they're promoting.
SPEAKER_01Yeah, I would say like treat your affiliates like human beings. They're not Google ads, they're not a technology piece. I think one thing I'd love for seeing more collaboration between the growth marketers, performance marketers, affiliate marketers, one and the same. I think working in conjunction with social media, with brand, and really being part of that. So that every campaign, every everything that brand is doing should be part of also affiliate marketing. Yeah. Uh it's a great way of being being consistent because you know you're consistently putting out the same message, and it's not now we want you to promote this, now we want you to promote this. It's more about here's a story we're telling. And you remember stories, you don't remember promos. Um so I think what I'd love to see more is integration of the true affiliate marketer, the growth marketer with brand and social media, because I feel like they go very much hand in hand. And that storytelling can pay dividends at the end of the day. And Pura Vita got acquired for a hundred million dollars by Vera Bradley and Vera Bradley, we're working with them now, and they they are now tapping into what Pura Vita did and building out the same type of program for themselves. Yeah. Because they want to learn from these next generation companies about how are you doing marketing? And part of that acquisition thesis is that we want to also adopt it and scale it for the the retail brand or any other brand that are in the portfolio. So, what you're seeing is traditional brands acquiring uh a bunch of these e-commerce brands and learning from that and adopting their uh brand ambassador influencer and affiliate marketing strategies.
SPEAKER_04How long did it take Pure Media to actually build this ambassador program? Because that's the other thing. People are impatient when it comes to affiliate marketing before they and actually, what I want to kind of really drill home on this season is that it is a channel that you need to invest in over time. It is not Set and forget. Like it is a constant marketing channel that you need to be massaging, engaging in, spending time on to grow and really make successful, like Pure Beta did.
SPEAKER_01Yeah. I think there's two parts of this. One is yes, I think you need the right staffing, you need the right commitment. It's a multi-year, multi-quarter type of build out, but it's never done.
SPEAKER_02No.
SPEAKER_01If you don't have anything in-house, you know, there's plenty of affiliate marketing agencies that can help you with this too. We work with them. They're all our partners as well. We have a bunch of them listed on our website.
SPEAKER_04Yeah, you can check out affiliate inside up.
SPEAKER_01Um, you know, and that's a great way to maybe test out if you're not committed to, you know, building it in-house, working with an agency and trying it out that way.
SPEAKER_05Yeah.
SPEAKER_01But yeah, I think you definitely need commitment. It is something that requires constant testing. It is not a set it and forget it. I I want to make sure people get that. Anything you get out of this podcast is that this requires commitment. This requires, you know, if if it is a big company executive sponsorship. But, you know, the brands that do really well, and we have a ton of them at Reversion, when we look at the top 50, top 100 types of programs, what we see is they're driving more than 25% of their revenue from affiliate marketing, 30, 40%.
SPEAKER_02Yeah.
SPEAKER_01And they're very, a lot of them are, if you are a vertical focused brand, it's a must for you to try this because especially if you play in like fashion and beauty or health and wellness or you know, food and beverage is absolutely exploded. There's so many ways you can work with, again, I'll go with the professional creators. You can work with a celebrity chef if you're in food and beverage. You can work with a celebrity trainer if you're in health and wellness. And it's a great way to try out what message works for you. Uh, that's one piece. The second piece is, you know, when we see what's happening is that again, it's it's part of treating your affiliates as human beings, influencers, brand ambassadors, because if you don't treat them well, everybody talks. And, you know, you you break that trust. And think about how much you spend money on recruiting employees, recruiting customers. That's the same time and effort you're spending on recruiting affiliates. And retention should be something that you manage when it comes to your affiliate marketing. Are we retaining our influencers, ambassadors, affiliates? Because if you're not, you're spending that time re-recruiting new ones. And for some of that, you know, payments is like one of the biggest things that we're seeing is that a lot of brands, maybe it's their technology or they're using Google Sheets or something else. They don't really pay their influencers or affiliates, they don't pay on time, or back to the tracking and performance, they don't pay the right amount. And, you know, at the end of the day, these affiliates, that's their lives good. So imagine if you don't get 50% of what you just expected, you're not that trust is broken at that point. So, you know, I think you want to make uh affiliates feel valued. You got to invest in their experience, show them respect, gratitude, right, for the referrals that they bring you by making timely payments. You don't have to go overboard, just make timely payments to them. Inspire them to continue making more referrals to you by being reliable and consistent. Don't make them chase you for their commissions.
SPEAKER_02Yeah.
SPEAKER_01And then, you know, motivate them to join and actively participate in your program. Insent your affiliates, right, to increase the volume of referrals by like, you know, something like offering commission-tiered structures, right? So they are constantly looking for like the next level, the next level, the next level where they can get more. And, you know, give them lifetime commissions maybe for for customers if you can, not just initial sale.
SPEAKER_02Yeah.
SPEAKER_01I mean, there's lots of ways to drive the retention and recurring revenue out of this. But at the end of the day, prioritize the affiliate experience. I think that's usually just like building trust. And a lot of the what I see is just, you know, approving and paying the commissions that they drive to you or the sales that they drive to you.
SPEAKER_04Sure. Agree a hundred percent. Now, if you had a small budget and you're looking to get into the affiliate model, like let's talk about smaller SMEs that are coming into this channel quickly. Um, and you want to reach as many customers as possible. How would you advise that an SME approaches this to spend it? Like, what would be the key things that you would say invest early on and these will pay dividends?
SPEAKER_01Yeah, I would say, you know, where we see a lot of success on the smaller side or, you know, more of a startup size type of brand is you know, they're working with nano or micro influencers.
SPEAKER_04Yeah.
SPEAKER_01Again, in their vertical. And they again keep it, keep it very focused. If you are a health and wellness brand and you are doing CBD, you're doing vitamins supplements, find trainers, find people who are talking about this thing through discovery tools and you know, recruit them. And, you know, basically you're pitching them at the end of the day. You know, it's like, uh, and you what you're trying to do is not find an ability, you're trying to find a partner, especially if we're trying to get going. Get five to six that you can manage, you know, reliably and consistently. I would say five to ten, somewhere in there. Try out messaging with five, try out A, B type of testing. First five, get this, second five, get this. But I would stay vertical focused. I would stay, you know, if you are regional, try finding local influencers. You know, people like, and I'm gonna make this up, people who are on the news channel, right? They're trusted. People who are, you know, they're just more trusted in the local community. It could be former mayors, you know, things like that. There's lots of ways you can you can uh recruit people for local, vertical, and activate them in a very manageable way. Uh and if you have customers, again, I think brand ambassadors are some of the easiest ways to reach out to your database. If you have a database of like 10,000, 20,000 customers, what easier way than saying, hey, we love you, we want to offer this to you. And everybody that you refer, you know, we'll we want you to be partner with us, and here's what you get out of it. And, you know, celebrate them too, right? Uh, one thing I've seen is that the best brands not only do like brand ambassadors, but they promote their brand ambassadors too. Yeah. They share them in their Instagram stories. They uh, you know, they show them love. And this goes back to just building trust. So I think nano, micro influencers, brand ambassadors, but really like zero in on the vertical that you're in, the region that you're in, so that you're not trying to boil the ocean by, you know, not everybody needs a Kylie Jenner. Yeah. Uh she's great at what she does, but there's there's many micro and nano influencers that can help bring business to you uh once you really zero your focus in on what you're trying to do.
SPEAKER_04And I think that's something else that's also quite important because when we deal with clients and we're managing their affiliate program, their initial instinct is always get us more, get us more, more, we need more active affiliates. And actually it's not because some of the most successful affiliate programs that I've managed have had a small, loyal database of affiliates that really invest in the brand and actually go, you know, 100 miles an hour to actually promote this brand because the brand has invested in them. So it's not, I think that's another kind of myth that we could have touched on, you know, myth busting, you know, what what makes a successful affiliate program? It's not the number of affiliates, it's the quality of affiliates that are in your program that are actually driving the sales and really sticking behind that brand and and building that kind of ambassadorial influence over the customers that they reach in in the various different niches. So tell us a little bit about affiliate marketing. Something that's true that you've learned working with, you know, the variety of clients that reversion services and supports. What's something that you've learned, you know, working SaaS side to support all of these brands?
SPEAKER_01Yeah. I think I've learned one day coming in, I didn't realize that how friendly it is from a cash flow perspective.
SPEAKER_04Okay.
SPEAKER_01When it comes to Google Ads or any other performance marketing uh model, you're paying money up front to the advertising platform. Your margin is already depleted. Uh you now have to fulfill it, you have to do all this. With the billiard marketing, you have this like delay built in, which is great from a cash flow perspective. If you're launching a brand, if you're managing a brand that usually there's a 30 plus day type of clawback period, return period, things like that, where you want to make sure that when the sale comes in, it's obviously like you have to be protective, make sure there's not enough fraud, things like that. But it's a very cash flow positive type of model. And you can you can start reinvesting that money into more product, uh, more marketing. And so it's it's very helpful from that perspective that ability of marketing kind of it's like lending you money for free to be able to go do more uh with that. And I'm surprised how many people don't get that. And that was one of the first things that occurred to me is that wow, this is like almost like you're loaning yourself free money. Uh, so that was one thing that occurred to me compared to any other type of model that's out there.
SPEAKER_04It's a good way of looking at it.
SPEAKER_01Yeah, and and another thing is uh, you know, ambassadors who'll raise their hand to your point, even if it's like 20% of your database, that 20% is from an LTV perspective, probably some of your most valuable customers that, you know, will probably go to bat for you for any type of thing. So treat them like royalty, treat them like VIPs, give them early access, give them, give them exclusivity. Give them something that nobody else has access to. Like if you're a clothing brand, a special drop, that only that 20% gets because they're special. And then tell them that that only, you know, only one out of our hundred customers is getting this, or five percent of our customers are getting this. And, you know, then watch them share this when they when they get all that stuff. Treat them, basically treat them like royalty and then you know, with affiliate marketing, this is you know, not uh this is not gonna shock anybody. It's a great way to get in market customers, but build backlinks to your website. Uh, and that's a great way to, you know, permanently have some evergreen uh backlink that is hopefully stands the test of time. But yeah, I think for me it's been the cash flow positive nature of this business, how to identify your most loyal customers that you can then leverage at other parts of your organization too, like product testing, product feedback, early sales, uh VIPs. And this is a great way to find those loyal customers, which I'm not sure how many other ways there are, but they'll automatically raise their hand. And the last one being, you know, just the evergreen links and evergreen presence that you'll have out there. And uh, once you see editorials happen, other people will pick it up, especially if you work with publishers that rank high on Google. You know, that's just uh something that will stand the test of time.
SPEAKER_04So it's one of the leading marketplaces for affiliate marketing. I mean, obviously the US is more advanced than some of the other regions that we're gonna be investigating on this podcast. Where do you see the future trend? Because we've seen the move from traditional publishers now to embracing influencers and ambassadors, but what's next for a market that is already ahead of most others? Where do you think the trends are in the US at the moment?
SPEAKER_01Yeah, I think uh very much micro and nano.
SPEAKER_04Yeah.
SPEAKER_01And a lot of what's happening is that uh like Vera Bradley and uh I think the this is a public story that you can Google Vera Bradley, just Google Vera Bradley Reversion and you'll see how they're creating local audiences.
SPEAKER_04Okay.
SPEAKER_01So Darren Hall, who's the president of Vera Bradley, has created multiple audiences, regional and local influencers that he uses then to drive foot traffic to stores where they have Vera Bradley products.
SPEAKER_02Yeah.
SPEAKER_01And that's a great way. And then he funnels all that back into his data lake or data pool and then is able to then advertise to these people and do other things with it because that data lends itself to be, you know, I can I can drive so much more. Uh, but it's very interesting to how you know people are taking the concept of influencers and activating foot traffic. Yeah. Uh, because people are dying to go outside too, post-COVID and look at things and do things. And what better way to say, hey, influencers in we're in a retailer in South uh Southern California now. Southern Cannibal influencers start promoting, start talking about this for the next six months to that micro audience.
SPEAKER_02Yeah.
SPEAKER_01They could have like five different regions activated at the same time based on their activation and based on their market penetration. That's a great way of promoting traditional retailers who are looking to go into e-commerce and beyond how to leverage the store that is a fixed cost, and how to get more traffic and more sales out of that store. So that's one thing we're seeing is influencers being used regionally, locally, and as a concept of multi-audience. Yeah. Uh and you can segment that by, you know, if you're a health and wellness brand and you do CBD, then you also do supplements, and then you also do workout gear. You can have different types of influencers and affiliates for each type. And depending on what you're promoting or what you're launching or activating, you can turn on and off different audiences. So we're now seeing the maturity and the more savviness when it comes to influencers and affiliates becoming audiences, but multi-audiences to reach multiple types of consumers.
SPEAKER_04And that's really going really deep into localization as well and really getting into the cracks of your community. So you if you're planning to go that deep, and if you are in a market that isn't that emerging yet, like listen to this podcast and make sure that you're partnered with the right partner because this is where tracking becomes very, very important to actually turn on and turn off those audit segments and really segment the messages that you're pushing through all of your nano and micro partners.
SPEAKER_01None of this is possible without the right tracking. I can guarantee you that you cannot do any of this if you don't have reliable tracking. That's why it was the first thing I said was first party tracking, reliable tracking. You gotta have that. It's just stake, it's just like a you know fundamental thing they use now.
SPEAKER_04Yeah, absolutely. Lastly, if you had a magic wander, and this is just our kind of like fun question at the end of the podcast, what's the one thing you'd like to see change in the way brands approach affiliate marketing strategies or building partnerships? Like what's one thing that you wish you could wave a magic wonder and go, okay, I'd love to see this change in the next three months, for example.
SPEAKER_01I think it goes back to making your affiliates feel valued.
SPEAKER_02Yeah.
SPEAKER_01I think it's twofold. One is the affiliate experience, and one is your team experience. Affiliates need to feel valued for everything that I spoke about earlier. You know, invest in their experience, show respect, pay them on time.
SPEAKER_02Yeah.
SPEAKER_01From your team perspective, have the right staffing, have the right budget, you know, make sure that there's a commitment to growth and or simplification of the program. Sometimes programs get way too complicated and they don't really need to be. Find out who your top performers are. Again, if you have reliable tracking and uh performance, you can find out quickly who is the best performance in a region, who's the best performance for a product, who's the best performance for bundles, you know, who gets you higher AOV versus low AOV.
SPEAKER_02Yeah.
SPEAKER_01By AOV, I mean average overvalue. So there's lots of ways you can find these different types of, at the end of the day, their audiences. Yeah. And they will organically shift themselves into certain quadrants.
SPEAKER_02Yeah.
SPEAKER_01Uh and make sure your team has the right platform to be able to discover and then monetize that. Because organically, people will shift into what they do best. Your job then is to take that and put it on steroids. Somebody needs to do that because just having them find everything organically is great. But the job of a platform is to then help you take that, double, triple, quadruple that out.
SPEAKER_04And I would like to add in there, you know, give your affiliate management team if you're running your program in-house training, because they need to be kept abreast of what's happening in the digital space all the time. And we'll be launching a really great training event in January of 2022 to help digital marketers amplify their affiliate program performance. So invest in your team, invest in your staff, invest in if you if you want to outsource to an agency, outsource to a specialist agency, but go into affiliate marketing for the long term because everything that Raj just shared with us here on this episode is 100% happening in stronger markets like the US. So if you're in Europe, if you're in other parts of the world and you're listening to this podcast, this is what you can look forward to as your market becomes more mature.
SPEAKER_01And if you do it right, more than 20%, 25% of your revenue should be coming from affiliate marketing. If you're doing a $10 million, that's an additional two, $2.5 million a year.
SPEAKER_02Yeah.
SPEAKER_01Right. Imagine, and that's there's some upfront expense, but then you know, if you do it right to your point, you invest in the team. Invest, and the team is usually just one person. This is a very lean, it scales really well. So it can, but it can deliver so much more. Uh the exponential return that a billion market can deliver is just, you know, and match in any other digital channel.
SPEAKER_04In my history of working in the industry, I mean, I've ran a $27 million program of three people and a really good tech technology.
SPEAKER_01So technology has democratized it, it has made it so that it's very accessible. Absolutely. And it's made it much simpler. So don't be turned off by the complexity. It is actually very simple. You just need to create like what do you want to get out of it? A quick strategy, and then just start testing.
SPEAKER_04Yeah, absolutely. Ran, it's been an absolute pleasure having you on this podcast, and thank you so much for sharing all the insights and trends that you're seeing in the US around performance marketing and where we see brands grow. So it's been really, really a pleasure to speak to you this evening.
SPEAKER_01Thank you very much. Appreciate it.
SPEAKER_04Look forward to seeing you soon.
SPEAKER_05Amplify your digital and affiliate marketing performance next year and join us for our affiliate insider summit. Taking place on the 17th to 18th of January. Amplify your performance at the Affiliate Insider Summit and register now at affiliateinsider.com and then click on Affiliate Insider Summit. And that's a wrap for this week, Affiliate Insider, Affiliate Marketing. Tune in next week for more digital marketing insights and traffic driving tips, tricks and strategies to keep your digital marketing fresh and your affiliate program driving consistency titles.