Source: Social Selling News
“Affiliate marketing streamlines the process of increasing sales by tapping into the skills of experienced marketers and a community of product evangelists.”
With new developments in digital technologies, growth in social media influence, and changing consumer behaviors, direct selling companies are now stepping further into the digital age where social communities and marketers are joining forces and sharing in the rewards along the way.
The direct selling business model, in general, has always been centered around a strong sense of community. As a competitive advantage over traditional retailers, direct selling companies focus on the more social aspects of the business world, creating deeper connections with their customers and sellers. Because of its community-driven nature, more and more companies in the industry are introducing affiliate systems as a means of giving their brands greater reach and generating more opportunities for growth within those communities.
Below, we dive into the act of incorporating an affiliate system into a direct selling company, leveraging your consumer community and digitalization.
Developing a Direct Sales Affiliate System
An affiliate system is a marketing strategy where individuals earn rewards, recognition, and even compensation for sharing information about a company’s products or services. A recent article in DemandSage offers a few stats relevant to direct selling:
– Health and Wellness is the most profitable niche where affiliates earn the most.
– An estimated 14% of Instagram affiliate marketers operate in the “lifestyle niche” consisting of: Travel, Beauty, Fashion, Health and Fitness, and Motivation.
– Since 2015, searches for the keyword “affiliate marketing” increased by more than 300%.
– 32% of affiliate marketers are between the ages of 35 and 44.
– Affiliate marketing estimated spend in 2023 will be around $13 billion.
Research shows that the high adoption rate of affiliate promotion is being driven by several results that companies are experiencing: the opportunity to improve website traffic, increased sales, ability to reach new generations, improved brand awareness, and digital technology growth. Ultimately, direct sellers want motivated, passionate, and creative people to sell and share their products.
- Define Your Ideal Affiliate
There are many types of affiliate programs out there with over 100,000 companies worldwide making up the Affiliate Networks Industry. Identifying the right affiliate partners who can effectively promote your products and align with your brand’s values is crucial. This can be a challenge as not all affiliates are a good fit for your direct selling business, and the wrong affiliates increase the risk of harming your brand’s reputation. From our clients’ experience, the direct sales community has primarily two types of target audiences for an affiliate program:
— Someone who relates to the company’s products and services and has some type of relationship to the offering. Generally, the connection is between the affiliate’s niche, like a fitness coach, and some sort of fitness or workout product or service that the company offers. This offers creators, bloggers, influencers, website owners, and travel enthusiasts to monetize their online presence while connecting their audience to a direct selling company’s offerings.
Through content, such as blog posts, articles, LIVE Shopping, videos and social media posts, the affiliate has enough influence and expertise to generate traffic, and their level of authority makes them a trusted source. For some, this may be considered a social media influencer. This is an extremely popular method for both brands and affiliate marketers to reach a broader audience and generate more sales.
— Someone who is a consumer of the company’s products and services and is establishing a deeper connection between the affiliate and the product or service they’re promoting.
They are confident that their positive experiences using the products can be shared with others. Their experiences are advertisements, and they serve as trusted sources of information. They empower direct selling companies to tap into existing customer and preferred-customer communities that trust and use your products and do have more of an allegiance to your company.
- Define Your Affiliate Reward or Compensation
A company must establish a clear and attractive reward structure. The goal is to motivate affiliates for sharing and earning while preserving the existing direct selling compensation payout structure. This is a delicate balance as only so much money is available to be paid out.
Software and digital technology platforms that specialize in both affiliate marketing and direct selling are key to offering varying types of earnings and rewards for affiliates through points, incentives, credits, spend back, referrals, and even crypto currency. “Since affiliates typically get rewarded for what they share and there are no quotas, building a team or minimum sales requirements, direct selling companies can reduce overall payout since it typically involves a single transaction with no uplines to pay. Generally, 15% to 20% is considered a fair and attractive rate for most affiliates. It’s also common that affiliates represent multiple products and not just one company,” states Greg Fink, Vice President, Global Sales at Jenkon.
- The Right Technology Is Essential
Selecting the right tools and software to automate affiliate marketing operations integrated with
a direct selling business platform is key. Tracking affiliate links and purchases, calculating instant rewards, delivering real-time communications, and presenting information related to an affiliate’s activity to keep motivating them is essential.
Key Technology Considerations:
— Tracking and offering purchases on multiple platforms and cross-channels to reach a broader audience. Whether someone runs a blog, YouTube channel, LIVE Shopping, podcast, or social media platform, full automation and tracking of cross-channel purchases is a must.
— If LIVE Shopping is offered, consider a fully integrated and immersive platform. With streaming LIVE events, real-time chat with the affiliate and inline purchasing along with streamlined cart checkout is key to minimizing clicks, downloads and navigating off the LIVE event.
— Make it simple and easy for an affiliate to upgrade and become a sales representative by providing communications and materials to help support their advancements.
Streamline enrollment, and the process to earn more should be simple and easy.
— The technology platform must have a Compensation/Incentive Engine that can support both affiliate and direct sales commissions, promotions, qualifications, incentives and bonuses. It must offer communication channels supporting both affiliates and direct sellers.
— Compensation modeling is becoming quite popular as companies structure their affiliate commission payouts and rewards. Many of our clients are leveraging our compensation modeling tools facilitating projected payouts and forecasts.
— Mobile optimization and usage impacts affiliate marketing in numerous ways. The mobile user demands seamless navigation, quick access to information, and streamlined purchasing processes. Secondly, with mobile-first indexing by search engines like Google, a mobile-friendly website is essential for good search engine rankings. Lastly, the loading speed on mobile devices can significantly influence user engagement and conversions, making performance optimization critical for affiliate marketers.
Additional Business Considerations:
— Direct selling has always been subject to heavy compliance and various regulations, and companies must make sure content is compliant.
— Properly managing the ROI of an affiliate program can be difficult unless the right systems are in place to measure its success.
— Creating affiliate content that is more than just a sales pitch but is informative and educational. Instill trust in your brand empowering consumer knowledge through your affiliate system.
Direct Selling and Affiliate Programs Hold a Bright Future!
Many direct selling companies are launching affiliate programs to reach new customers and generate more sales including but not limited to: Amway, Herbalife, Tupperware, USANA, Bella Grace, and Beyond Slim to name just a few. Each one offers unique compensations and rewards. In fact, Mannatech a 30-year-old successful network marketing company, launched a new wholly owned subsidiary in June of this year doing business as Trulu – an affiliate marketplace for wellness. It is designed to be a complementary pathway to support growth in customer acquisition and retention.
It is an extremely exciting time in this new era of digitization to expand the direct sales business model by integrating affiliate programs. Direct selling is moving through the early development stage as most companies mentioned in this article have only just recently launched affiliate programs within the last year. “We remain optimistic that the tangible sales results will be positive and that the affiliate model within direct selling will create greater trust between brands and their consumers,” states Fink.