Affiliate programmes have been around almost since the start of the internet and ecommerce. While affiliate programmes are well understood with respect to the normal products like golf kits, domain names etc, the digital affiliate programmes are relatively new. With the increase in the number of SaaS and MicroSaaS offerings in the market place, there is an explosion of the Digital affiliate programmes in the market. Crewbuntu estimates that there is upwards of 2 to 5 thousand digital affiliate programmes live and this number is growing everyday. These digital products cut across the various product categories ranging from digital marketing, CRM, SEO, to accounting and even supply chain management.
If you want affiliate marketing as a source of income then you should choose and promote affiliate programmes carefully. While commission structure is the most obvious parameter that one might look at, it is not the sole measure. It is advised to look at Total Conversion Value rather than just commission as a parameter. Total Conversion Value is a function of the following Pricing, Commission Percentage, Commission Duration and Conversion Factor. Lets explore these factors individually.
Pricing is the simplest of the factors to judge on. Most, if not all the SaaS/Digital providers list a pricing sheet with all the pricing details listed there.
- Is the pricing per item, consumption based or is it per subscription
- Item based pricing e.g. ByPeople sells various graphics assets. If you are able to sell any of these assets, you will get a commission of 30% of this sale
- Consumption based pricing e.g. sendinblue has a pricing which has tiers but is based on consumption. Sendinblue is a transactional emailing platform and the more the users send mail, the more they pay.
- Price per subscription e.g. sendinblue
- What is the highest level of price, lowest level of price and what is the most popular pricing tier
- usually subscription based pricing will have 3 or 4 tiers and most vendors price the middle tier as the most attractive annd value for money tier. e.g. SocialBee
Note: Some vendors like convertkit can have a combination price where it is a combination of consumption and a tiered subscription that will determine the final price.
Commission Percentage is pretty simple, you need to promote programmes that give the highest percentage. That said some programmes have a fixed fee. Also, highest percentage in itself is not sufficient, because a 99% on a $1 price is much less than a 10% on a $20 subscription. This is where the pricing comes into play. It is important to understand the pricing well before looking at commission percentage. e.g. Reply.io gives 50% commission on a sale
Commission Duration is relevant in the context of subscription based SaaS where the customer ends paying monthly. Most companies pay affiliate commissions for every month that the converted customer pays for the services e.g. Unbounce gives a commission for every month that a converted customer pays for the service for the rest of the life. However some companies cap it for a certain duration. e.g. CRM provider Pandadoc provides a commission only for the first 12 months
Conversion Factor, this is the most important, but least understood of the factors. This in itself is a combination of a myriad sub factors. In essence, this is an indicator of the probability a customer will purchase the product. This will be dependent on a factors like Size of the company, in terms of revenues or subscriber base. Normally we will not have access to this information as most of the companies that run affiliate programmes tend to be private companies. A proxy for the size of the company can be the number of employees. Most companies have a Linkedin page and you can find out the number of employees in the company. Larger the company, larger the client base and larger the possibility of conversion. Similarly qualitative and quantitative social media presence, the amount of investment the company is making in digital marketing, are also good indicators of conversion factor. Companies that invest in solid content marketing and promote it aggressively on social media channels would always be more successful.
We at Crewbuntu have tried to collect all the information about best digital affiliate programmes. You can research and find more about the affiliate programmes at Crewbuntu