Affiliate marketing is a referral marketing strategy in which an organization pays a commission to individuals or other companies for promoting and selling its products or services. Most affiliate marketing programs pay a commission based on the number of sales. However, some programs are similar to advertising campaigns wherein third-party affiliate marketers receive a commission for generating leads.
Running an affiliate marketing program manually is a tedious task. Businesses have to handle several processes, such as tracking sales conversions, following up with leads, and managing commissions. Affiliate software helps organizations run such programs by automatically tracking the referrals, endorsements, and commissions of each third-party affiliate marketer.
A wide range of affiliate software options is available on the market, and choosing the one that best meets your needs and budget is important. This guide will help you understand the different factors you must consider when shortlisting affiliate software.
Here's what we'll cover:
What is affiliate software?
Affiliate software helps organizations manage end-to-end affiliate marketing processes, from onboarding new affiliates to tracking commissions for the sale of products and services. It allows businesses to create an efficient affiliate marketing campaign by automating processes such as sales conversion and commission tracking, leads generation, payment processing, and reporting.
The software assists in ensuring compliance with region-specific regulations, such as the General Data Protection Regulation (GDPR). Some affiliate tracking software solutions also offer promotional tools, such as shareable posts, custom banners, branded links, and social media plug-ins to help drive buyer engagement.
Tracking affiliate statistics in CAKE (Source)
Common features of affiliate software
Different vendors offer different features as part of their affiliate solution. Selecting software with the right features is easier when you know what the most common features are and what they do. Here’s a look at some of the common features of these tools.
|Affiliate commission management
||Tracks each affiliate’s sales numbers and automatically calculates the commission. It also allows you to customize the commission structure to suit the needs of specific programs.
|Product and service templates
||Offers customizable built-in templates that have complete details of products or services. These templates can be shared with your affiliates, who can then forward them to potential customers.
||Tracks affiliate activities, such as the number of leads converted and the amount of commission earned, and presents the results on a dashboard to help monitor the performance of affiliates.
|Analytics and reporting
||Helps analyze the performance of affiliate marketing programs by offering data-driven insights, such as average sales per affiliate, average conversion rate per affiliate, and percentage of sales through affiliates.
|Third-party integration support
||Allows you to integrate the affiliate tracking solution with your existing tools, such as marketing or brand management systems, for the smooth exchange of business data.
What type of buyer are you?
Before you start evaluating affiliate marketing software options, you'll want to know which buyer category you belong to. Most buyers belong to one of the below categories.
- Small and midsize businesses (up to 500 employees): These businesses typically include small and midsize businesses (SMBs) that operate in a few market segments. Unlike large enterprises, they offer a small range of products and services and thus have fewer affiliates. Also, they may not have a large marketing or brand development budget, so their affiliate programs have a higher focus on promotional purposes. Such buyers should opt for affiliate management software with features such as product and service templates, activity tracking, and commission management to easily monitor their affiliate network.
- Large enterprises (over 500 employees): These businesses usually include large enterprises that have operations in multiple market segments. They offer a wide range of products and services and therefore employ a large number of affiliates. They often run brand management and affiliate marketing programs simultaneously. These buyers should choose an affiliate marketing platform that allows them to analyze the performance of multiple campaigns besides tracking affiliate activities. They should also look for third-party integration support, so they can easily integrate the software with their existing technology stack.
Benefits of affiliate software
While some of the benefits of affiliate software may be clear from our discussion above, we've listed the most notable ones in this section.
- Reduces the manual workload: By automating tasks such as onboarding new affiliates, tracking conversions, calculating recurring commissions, and processing payments, an affiliate management tool reduces much of the manual workload for businesses. It also lets them set up automatic mass payouts to ensure partners and affiliates are paid on time.
- Provides end-to-end affiliate campaign management: Affiliate software manages and tracks end-to-end campaign processes for businesses. It provides a centralized dashboard that presents key metrics, such as the number of leads converted by an affiliate marketer, in an easily understandable format. Also, reports and analytics offer deep insights that help businesses identify where they’re lagging and accordingly make changes to increase the campaign’s return on investment (ROI).
Key considerations when selecting affiliate software
Listed below are some important points to consider when purchasing affiliate software.
- Integration with existing systems: Check if the affiliate platform you’ve selected integrates well with your existing systems. This consideration is critical if you’re already using a marketing or brand management tool for tracking campaign metrics and ROI. Integration functionality will ensure seamless data sharing among the different tools you use.
- Mobile app availability: Check if the affiliate marketing tool you’re planning to purchase offers mobile apps for iOS and Android devices, such as smartphones and tablets. Mobile-ready affiliate software will allow you to perform tasks, such as creating product templates, authorizing commissions, and viewing the activity dashboard, even when you’re on the move.
- Customer support: Inquire about the type of support provided by your shortlisted vendors: 24/7, 24/5, or only during business hours. Also, verify if they offer your preferred support channels, such as email, phone, or live chat. Support services will help fix any software issues that can create affiliate management disputes, such as delays in the payment of commissions.
Market trend to understand
Here’s a recent trend in the affiliate software market that you should be aware of:
- Artificial intelligence (AI) is optimizing affiliate marketing programs: Businesses have started reaping the benefits of AI optimization techniques to improve the ROI of their affiliate campaigns. AI can analyze campaign goals data to identify potential partnerships by matching brands with affiliates most likely to drive engagement. AI can also automatically send program invitations to identified partners. In line with this trend, software vendors are expected to introduce AI and automation capabilities in their affiliate program software.
Note: The application selected in this article is an example to show a feature in context and isn’t intended as an endorsement or a recommendation. It has been obtained from sources believed to be reliable at the time of publication.