We’ve talked about influencer marketing and referral marketing. Now, it’s time to talk about affiliate marketing. With all these types of marketing, where does one end and the other begin? They’re all related, but each is a little different.
Today, we’re talking to Arlen Robinson, chief operating officer and co-founder of OmniStar Interactive. Arlen describes the differences between types of marketing, how to set up a structured program for affiliate marketing, and how to recruit and create incentives to bring affiliates on board.
Eric: Happy new year Actionable Marketing Podcast listeners. It is 2019 and we are back. Yes, we took a couple of weeks off. I realized that our publish dates landed on Christmas Day and then New Year's Day and I thought, shocks, let's take some time and then what do you know, a blizzard hits Fargo area. It was going to take some time to recharge, get in touch with the families. I hope everyone had a great holiday and I'm just tickled. I am tickled, yes indeed to be back this year. It's going to be a fantastic year and I'm excited to kick it up with a fun little diddy of an episode on affiliate marketing.
Now, we've talked about influencer marketing, we've talked about referral marketing, now we're talking about affiliate marketing, I don't know sometimes where one ends and the other begins and so we're just going to break that down. I have Arlen Robinson, he is the chief operating officer and cofounder of Omnistar Interactive. And all they do is eat, sleep, breathe and drink affiliate marketing all day, every day. And so, he's going to break it wreck down, what are the differences between these three?
How do we set up a structured program on affiliate marketing, how to recruit affiliates and how do we create incentives to get them onboard. It's a great episode, it's a fun way to kick off the year. I am Eric Piela, the brand and buzz manager at CoSchedule. I cannot wait to introduce you to Arlen. All right, you know the routine, let's get amped.
All right and welcome to another episode of the actual marketing podcast. Arlen welcome to the show.
Arlen: Thanks a lot. I appreciate it Eric. Thank you for having me.
Eric: Yeah. Absolutely. So Arlen, I know that you are with Omnistar Interactive, you helped cofound that and I want to give you an opportunity to share a little bit about yourself. I'm excited about this topic of affiliate marketing. I know it's something our listeners definitely have interest in. There's a lot of programs out there that’s been around for a little while now. I think there's some dynamics and some interesting use cases I'm excited to explore during conversation today.
Arlen: For sure, yeah. I'm excited as well. Affiliate or referral marketing is of course part of my bread and butter here. Just to tell you a little bit about myself and how I got started. It's been quite a journey. I've been in the business, I'm the cofounder of Omnistar Interactive, we are a web solutions provider. We have two software solutions. Our main solution is known as Omnistar Affiliate Software which allows any business to set up and manage their own affiliate referral programs.
We also just recently launched a new solution on a site feedback that will allow a business to set up a one question email survey where they ask their customers how likely they would be to refer all these. So it ties really nicely with our affiliate software. Omnistar as a company has been in business for almost 20 years now. It's been quite a journey. I've kind of experienced a little bit of everything. we founded things in about 2000, early days of the internet and started off as just kind of a full service web development shop developing everything from basic websites to fully dynamic functional ecommerce solutions and web based applications for a variety of different businesses and industries and different niches.
We got a lot of experience doing that. But several years into it, we decided to take a step back and actually decided to just create our own suite of software solutions and the Omnistar Affiliate Software was actually one of them. It is the one that has stood the test of time. The others kind of went to the wayside, the other ones didn't do too bad. I mean, we even had an ecommerce shopping cart solution, a mailing list management solution, help desk system as well. But taking a look at the numbers and just the success of everything, we just thought it really made sense for us to focus on affiliate marketing. That was the one that was consistently selling year over year.
We saw the huge interest in affiliate and referral marketing and the way that it has really exploded over the years. And so we decided to stick with that. We've been going at it ever since. Myself and my business partner Tariehk Geter have been in the trenches so to speak hoping businesses primarily ecommerce businesses, set up and manage their own affiliate software solutions to ease in our software of course and many have been successful doing that and really having a ball doing it.
Eric: Well, that's good. well, obviously a topic that's near and dear to your heart Arlen, affiliate marketing with creating a business around this whole practice and so with your tenure in the in the industry, I know you've definitely come across some interesting cases for affiliate marketing. Probably a lot of war stories if we had more time, we can dive into as well. But maybe just to start, let's level set everything if we can. I think of affiliate marketing I also that sort of thing of referral marketing and that sort of thing about influencer marketing, and they're all kind of related but they're all a little different. Let's just get a clear definition so we all know exactly what we're talking about. What is affiliate marketing? I guess, how is it different from some of those other ones that I mentioned?
Arlen: That's a very good question. I'm glad you asked that Eric because these terms are kind often floated around and sometimes people use them interchangeably and they mean different things. So I definitely want clear that up. Affiliate marketing versus referral marketing. The main thing is the difference is, an affiliate program is when you get people to promote your business and these affiliates are typically people that are not customers of yours. These are outside people that are affiliate partners, you form relationships with them and they have not used your product or services and they are typically promoting your products or services to people that they don't know.
Whereas a referral program really relates to customers of yours that are actually referring your products or services to people they know. Friends and family, colleagues and of course, you're incentivizing them. So in both cases there's an incentive. The main difference is with the referral program, it's typically your customers that are loyal customers and they're looking to really just spread the word for your business. That's the only main difference. The third category that you mentioned influencer marketing is really similar.
It's almost the same as affiliate marketing. The only difference is when you talk about influencers, an influencer is typically somebody that has their own audience. A lot of times, when people hear the word influencer, they think of the big celebrities, the sports entertainers and all of that. But an influencer really doesn't need to even be somebody to that level. An influencer can be just someone that has a sizeable follower. Just maybe a few thousand followers either on the various social platforms Instagram, the Facebook and they have people that consistently follow them regarding what it is they're doing.
So if it's a personal trainer for example. A personal trainer with let's say 2000 to 3000 followers on Instagram that puts out a daily fitness tip or fitness exercise, that's an influencer because he has a pretty loyal following and an influencer would also be a person that would be a great affiliate for business because they can promote to their audience and you would be incentivizing them. So that's really the difference between those three main categories of affiliate marketing.
Eric: Thanks for clearing that up. I think it was good to make sure everyone's on the same page when we talk about those things because they are, they're slightly different but they all are somewhat related. I think if we really hone in on the affiliate and referral marketing program and candidly, we've played with both of those programs here at CoSchedule referral program to get a percentage off of the platform of our products. We played with some affiliate marketing around. Are there certain individuals we might want to provide some compensation for if they talk about CoSchedule or able to create trials are our customers, etcetera.
It's not that we sort of gingerly walked around, we're always trying to figure out, is this business model going to work for us. How do we implement that? And so maybe my question for you and maybe everyone who's listening either they're considering or if they have an affiliate program or referral program in place, why should every business implement or what's the use case scenario for doing something like a program like an affiliate or referral marketing?
Arlen: Well, that’s also a very good question. Just like any decision that you make in a business, it's always best to back your decisions on data. I think today the stats really do truly speak for themselves and there's no difference between referral marketing. So if there's a business that’s wondering, they're on the fence, they've heard a lot about referral marketing and affiliate marketing and wondering is it right for their business, the stats are really out there. So first of all, 92% of consumers trust recommendations from their friends or family over all other forms of advertising, that's from Nielsen. That's a huge step just alone right there. Also if you're looking for validation from other marketers, 64% of marketers agree that word of mouth marketing is the most effective form of marketing.
Just from looking at those two stats, the way that our current landscape is I guess you could say the current marketplace, the consumer marketplace whether it is you're marketing to businesses, whether you're marketing to end consumers, there's a lot out there. I think we can both agree that if you're looking to buy anything, there's a ton of options. It's not like your father or your grandfather's day where you had one store, you had a couple of stores, you may have a mall or whatever but these days, there's a lot of options.
For the consumer, things can be kind of overwhelming and that's why I think the growth of affiliate or referral marketing has really exploded over the past years because I'd like to think of it as almost I guess is maybe a term that I may coin it's probably consumer fatigue I guess you would call them. Whenever you're looking to buy something, it's like you don't know what to do. You've got the Amazons of the world, you have a lot of these other niche sites if you're looking to buy anything.
But the bottom line is, if you've got someone that you know or somebody that you trust, a friend, a colleague or a family member that recommends something to you, that holds so much more weight than it did in the past. Referrals word of mouth always had a lot of weight. But now more so than ever because you really trust these people that you know and they've already gone out there, they've done the due diligence. They've done the research. They probably tried the product or service and they vouched for it.
Because everybody's so interconnected these days via social media, you're going to hear about it. And the word spreads very quickly and that is really why referral and affiliate marketing has really exploded. I think just for that fact alone, I think any business these days needs to at least try and see how they can implement it for their business because it is truly a channel that really is going to go a long way and for years to come.
Eric: Yeah, that makes sense. It's funny you mentioned those stats. We actually just had Shane Barker on the show who really talked about influencer marketing and those same stats really caught our eye, the 92%, trusting word of mouth and earned media as the number one credible source. I definitely can see the correlation between affiliate referral marketing increasing as an opportunity and we're kind of fed up with a lot of the noise and so we do hold value to those that that we trust more and so, "Hey, never leave it." if there's an opportunity, Barker is going to find a way to capture that.
My assumption is Arlen, there needs to be some thought and pragmatism around how you approach whether it's our affiliate program or a referral marketing program. If you have recommendations, let's say okay, the stats are out there, this is something I want to go and do, where do I begin, like what kind of program, is there a template I can apply. Where the easy button or is there a research we can go to figure out like what does the structure program look like.
Arlen: Gotcha. that really totally makes sense because just like anything, you want to approach whatever you're looking to implement for your business like I would I would say a structured approach. You don't want to just kind of jump in anything and then see what sticks. I know a lot of businesses do that and there's nothing wrong with doing that to an extent to just kind of trying stuff but I think these days, with the amount of information, research and resources that are out there, you might as well take advantage of it.
So one of the first things I recommend with creating a program, an affiliate or referral program is, define your goals. You don't have to win the whole world initially, I know when you're thinking about an affiliate program and even maybe let's say attracting influencers let's say you're selling consumer products, everybody has the idea, everybody wants the Kim Kardashians of the world, the Khloe Kardashians to be their influencer and be out there promoting their products. But nine times out of 10, that's not going to happen. You have to be realistic.
Define your goals and define your goals upfront reasonable. So what I would say the first thing you want to do is, set up a map of okay, let's say I want to define and set up a referral program starting January 1st, 2019. Once I get this set up, I would like to have approximately let's say X number of affiliates by the end of the month. I'm going to initially reach out to all my customers and I want to have at least just a five to 10 active referral partners promoting my services by the end of the month.
That’s just an example of an initial goal. That’s a small goal but it's something that you can go after. Secondly, you want to define some promotional strategies. Once you get these affiliates and these partners onboard at a referring, how are they going to promote? There's a number of different channels of course out there that they can promote but the main thing that you want to keep in mind is you want to make it as easy as possible. So whatever solution you decide to go with, with regards to your program, you want to make sure it has all those tools in place so that they don't have to start guessing about the content to use on Facebook, the tweets to put out there, the referral links. You want to make it very clear to them. Lastly, one of the most important things is, make it clear for them to be able to measure their success and make it clear for you to actually be able to see the success of these affiliates so that over time, you're going to learn some patterns.
You're going to see that okay, this particular affiliate, he's sending me a lot of traffic through Facebook. It just seems like wow, he is sending me a lot of traffic, I'm getting a few sales per month and it's all from Facebook. So looking at stats like that, you can kind of go back and kind of retool some things and think about okay, what types of creatives can I make available for him to share and promote on Facebook. On the other side of it, you could have a blogger that has a very active blog and he typically intermingles a lot of graphical posts, or graphical images to art his post.
So that type of influencer or blogger, you're going to want to come up with maybe some unique create this for him to be able to share. Just things that are easy for them to be able to get out there. The main thing you want to keep in mind is you want to make it so that these affiliates and these referral partners just have to hit the easy button. You don't want them thinking about it too much.
Eric: While we take our short break from our conversation with Arlen Robinson on Affiliate marketing, it is indeed the new year. Now while I have a couple of good guests already in my back pocket, I want to know who our listeners would like to hear from. Who should I bring on the show. So what I’d love you to do is just email firstname.lastname@example.org and let me know who should I should chat with this year. Who do you want to learn from or maybe what are some topics you’d like me to dive into. I can’t wait to pick your brain to hear from you. So please, please do so. Again, it’s email@example.com, looking forward to reading those emails. All right, let’s jump back in to our conversation.
We talked about making it easier for them. first question is like, how do I recruit affiliates and I think this follow up question is, the big the big question mark is like, what do they expect from me? Like, "Hey, you talk about my product, that's great.” And now it’s going to be like, “Here's what I'm going to offer you." is it 15% revenue share, what are affiliates based on your expertise Arlen, what are they looking for?
What's going to make it impossible for them to say, "No." but at the same time, financially feasible for you to employ an affiliate market. You have to cook the numbers right to make sure they make sense. So if you're going to give them some revenue share, what does that look like? It's kind of a double barreled question if you will. But recruitment and really incentives would be a great thing to kind of maybe shed some light on if you could please.
Arlen: Gotcha. Definitely. So recruiting is definitely one of the million dollar questions as a business here at Omnistar. That's the number one question most of our customers have when they get our software. "How do I recruit people for my referral program or for my affiliate program, that's number one. It can be done in a number of ways. If you have just a traditional referral program and you know you have some loyal customers out there that would want to take part of it.
Of course you definitely want to reach out to your customers. You can do that a number of different ways. Of course, if you have a mailing list, you can notify them via your mailing list. Let them know what you have, that's number one. You can of course alert your customer based across your social media channels and let them know what you have and what they can actually earn. As far as the affiliate side of things, recruiting affiliates, there's a number of things that you can do these days to get affiliates, or influencers, or people that promote.
Well number one, there are a number of different online directories for affiliates, where they hang out and they exchange information about different industries and the latest and greatest affiliate programs and affiliate networks. You can definitely try to jump onto those and see what you can find, see who you can find and see who you can actually attract. Now, affiliates can also be found of course on social media. So you can even do searches for bloggers, or influencers in a particular niche.
So for looking at social media, one of the things that I love these days which are becoming bigger than ever are the Facebook groups because Facebook groups are similar to the online forums. I guess you could say they are the online forums these days where people in a specific community that have specific interests, they exchange information, ideas and they network amongst these Facebook groups. There's some open Facebook groups but there's also some private ones. See if you can get involved in those and then do your pitch.
Sell your sell and let them know what it is you have to offer. As far as speaking of offering and what you can offer as far as incentives are concerned, the bottom line is, you've got to stand out, you got to offer something that's sizeable enough to get somebody excited. Number one from what I see in my experience dealing with our customers using our technology, I would say the number one best incentive which usually will always be cash. Cash is always king.
So if you can provide a cash incentive to your affiliates or your referral partners, that's typically the best thing you can do whether it's a percentage of it, or a total or even a fixed amount. The higher percentage, the better. The standard rule of thumb has always been, anytime you have a referral type of program, it's always been 10% to 20%, that's usually standard. But what you want to do is you're going to need to go beyond that in order to really attract the attention of really anyone.
If you can do the 20%, 25% initially to get somebody's attention is going to go a long way. You also have to think about the influencers and these affiliates. They're probably affiliates for dozens of other companies and they're earning sizeable amounts of commissions and then they have things in place on their end where if they want to blast out your company and send people your way, they can do that and they can do it very quickly. So they're going to expect to get a higher commission.
So when you're approaching these affiliates and these influencers, you're going to have to definitely come up and even as close to 30% if possible as a percentage of an order total or even a higher fixed amount. So those are some definite rules of thumb and things that I've seen based on my experience in the industry.
Eric: I think for our listeners, that’s something to definitely consider when jumping into the affiliate game is understanding, crunching your numbers and seeing can you be competitive enough to get their attention. Are there any other incentives besides straight cash that you've seen work just in case maybe the capital isn’t there, or you don't have the money upfront to work with that. Is there anything else that might catch their eye?
Arlen: Yeah, one of the things that I've seen recently and I'm thinking about the fitness industry actually, organic products and fitness based bars actually because we've had several customers that are selling these types of product. One of the things that I've seen that is becoming more and more apparent is actually just offering products or merchandise. I'm thinking about a company that has an affiliate program, they actually sell nutritional fitness based bar and they were targeting fitness trainers and people sports professionals.
What they were doing was not offering cash, but offering merchandise so that these fitness people could then in turn provide this merchandise to their clients. It's kind of like a bonus thing. If you sign on with me, you'll get a daily fitness bar, that's just an example. So that's one thing that can go a long way if you've got a merchandise that you think would be attractive enough to spark the interest of your affiliates. That's definitely something that you can do.
Other things can be just a custom gift, other rewards that I've seen have been the standard gift cards. One thing that you want to keep in mind though when you're creating a program is you want to make it as painless as possible and yourself as a business to be able to get out the reward. On your end, you don't have to go through a whole lot of hoops whether it is if you're going to go through the old school method of sending out checks, or cutting that, or sending out traditional gift cards. There's other ways around it.
There's businesses that I've dealt with that do the Amazon gift cards. They generate them online, send them out to affiliates that have earned it, very easy, very painless. Those are some other ideas and examples of things that you can do.
Eric: I know. It's a perfect alley-oop for my next question. When I think about what it would need to kind of execute one of these affiliate or referral plans I think about – one, I have to be able to track internally which the sales have been influenced by that individual. So some kind of tracking URL or tracking system, and then two, I have to manage the payment process. So whether I’m doing gift cards, or my own merchandise, or I'm giving percentage of a deal that close because of their referral or affiliate that's passed along.
That's another thing I have to track and then potentially, I'm creating all this content for them that maybe is specialized by industry or by influencer. I think there's a lot that people need to realize before they jump in and I love in your recommendations on like, what are some tools, what are some resources. I won't be surprised if you say Omnistar but what are some things, maybe I'm missing some things that people need to track and be aware about. How do we make this thing happen? If we have committed to our influencers and our affiliates, how do we start rock and rolling?
Arlen: Well, there's a number of ways to do it. Of course, I don’t want to toot by my own horn but of course you definitely check out Omnistar Affiliate Software. There's definitely a solution you could go with if you're looking to launch an affiliate or referral program. This solution has definitely stood the test of time. It's been in existence for over 15 years now. We've got to go up to the ropes and we've done a lot to make it the solid product that it is today. But when you're looking to create an affiliate program, these days, I would definitely recommend going with a solution.
I have talked to other businesses that do do it the old school method, spreadsheets and having a web developer generate a custom link, and using analytics software to track it. Although you could go that route, I wouldn’t recommend it. Especially these days because, there are a number of solutions out there. Not only our solution, Omnistar Affiliate Software but there was a ton of other solutions out there that are very affordable that can allow you to really get set up. Set up your referral programs and the software these days pretty much would generate and pretty much the beginning and everything for you upfront.
Where the sign up pages are all integrated as far as like our software is concerned. We have a built in, a sign up page that you can just link to easily from your website when people sign up. An automatic link is generated for them as a tractable link that you can predefine and pre setup whether it goes straight to your site or go straight to your shopping cart. All that is set up and then from there, it's just a matter of doing a simple integration. All affiliate software solutions are pretty much the same.
There's just a snippet of code that has to go on your order confirmation page which is really common these days. I mean there's so many solution these days that just require a small snippet of code that you add to your site and affiliate software solutions are no different. So that's what's required really to get the tracking work. On the backend, you definitely want to keep track of your stats, you want to have a solution that's going to be able to give you the ability to easily see who are the top performing affiliates.
Who those guys that are out there that are really just consistently sending you the sales and then those that are sending you those sales, you want to be able to easily manage the payment as we mentioned before on a business. You want to make it easy for yourself and that's one of the things we've thought a lot about in Omnistar. We've got integrations with PayPal to make it easier for businesses to easily payout via PayPal. PayPal actually has a mass payment feature as well we're compatible. Not too many people know about it, but you can do a mass payment feature where let's say you need to pay 20 people all at once, you could do that with our software in PayPal.
So that's a pretty good thing. Once you have all that in place, it's just a matter of continually getting out there and recruiting whether it's your customers or your affiliates. As far as customers are concerned, the one thing that you want to do is really kind of find out who those most loyal customers are. And you're going to see it because your order date is really going to be able to light and uncover that. You're going to have some customers that have ordered over and over, or they have a certain volume. Those are customers you definitely want to try to target first, reach out to them via email and reach out to them.
You also want to make your referral program available and known to people through what's called a viral loop. You really are going to need to have a constant flow of people into your referral program because just like anything with affiliate and for marketing, the 80/20 rule applies. You're going to have about 20 people doing about 80% of all of the referrals. So the more people that you have in your kind of pool of things, the better. When I say a viral loop, what I mean is, what you want to do is you want to expose people to your referral program throughout various phases of your sales life cycle.
So initially, when somebody purchases your product, let them know that you've got a referral program to those transactional emails. A lot of people don't really realize it but those transactional emails have some of the highest view rates and click through rates of any other emails that are going out because people are always going to want to check and see "Okay, what's going on with my order. What's the status of it." what's going on basically. Those transactional emails a very key.
So at any point in time when you have those initial touch points where you're even sending out and maybe even the after delivery emails, you can expose them to your referral program, provide a soft link, you don’t want to do too much because those transactional emails, you want to of course focus on the actual transaction but you want to definitely let them know what you have, you got a referral program, they can earn 20% commission and all they have to do is click here to sign up.
Getting a constant flow of people by exposing them at various points in that sales and order lifecycle is very key. Now, as far as the affiliate side of things, I wanted to mention this earlier but a lot of people always are asking me, "How do I get these influencers? Maybe I just want to get somebody that," going back to the fitness trainer, "I want to try to get an influencer that's a trainer. He's on Instagram. He or she is on Instagram. He's got several thousand followers, that’s all I'm looking for. I want to kind of try it out with them. How do I find somebody like that?"
Of course, you can go the traditional route of just the regular outreach. Just get on Instagram, see who's got a certain amount of followers and send them direct messages, just DM them. Do your pitch. Let them know what you got and what you can give them. That's one way of doing it but there's other ways you can actually reach these influences. These days, there's several marketplace type of sites out there that are I guess you could say kind of a network between businesses and influencers. One of those sites is openinfluence.com.
I think it's a marketplace for influencers. So if you're trying to find influencers, you can create an account there and get exposed to influencers in a variety of different niches and another site is izea.com. They offer an influencer marketing service where it would allow you to find influencers from a variety of different areas and background. Those are definitely some recommendations and some tools and resources that I recommend to any business looking to go down this path.
Eric: Yeah, some fantastic insights. Arlen, I know you'd have the deets for my listeners. A lot of good things to consider. I think you laid out kind of the entire decision process. Everything from making sure you understand exactly what you're getting into, why you should implement one, making sure you've got that structured program, how do you go about recruiting some of those incentives and of course, how are you going to manage it all.
Whether it's a platform like Omnistar or another affiliate tracking solution or old school. I use a lot of options out there. I appreciate the time today. A lot of things that we covered and I definitely think there's a lot for businesses to consider. It seems like if you're not at least already doing referral or affiliate marketing, it sounds like now is the time to at least start taking a look, figure out or plan how it might look like for you. Again, I am speaking out first hand here at CoSchedule definitely keep an eye on that and figuring the right moves for us too. So Arlen, I appreciate your time, great conversation today.
Arlen: Thank you Eric and I appreciate the opportunity of being here. It's been awesome.