In the subscription industry, where businesses live or die by the total number of sign-ups, affiliate marketing is a saving grace.
Affiliate marketing programs invite content creators to promote and generate leads for your brand’s product or service.
By leveraging bloggers, social creators, and other influential personalities, affiliate programs encourage both new subscribers to join and existing ones to renew.
Many well-known subscription services have seen increased growth and retention thanks to their successful affiliate programs. This includes physical subscription boxes, digital content subscriptions, and even subscription-based software packages.
In this article, we go over how you can use affiliate marketing to grow your subscription service.
What is a subscription affiliate program?
In a subscription affiliate program, your subscription-based business pays content creators for helping them generate sales.
These content creators, known as affiliate marketers, promote your subscription services through word-of-mouth recommendations within their content.
Whether it’s on a website, blog, or social media site, affiliates post links that direct their audience to your subscription site.
Every time someone clicks an affiliate link and subscribes to your service, that affiliate earns an affiliate commission for the sale.
In other words, whenever a purchase is made through an affiliate link, you share some of your profit with the affiliate as a reward for bringing in a new subscriber.
Why does your subscription service need an affiliate program?
Not only are affiliates experienced at promoting services and products, they’re often regarded as experts among their audience.
An affiliate’s audience places a significant amount of trust in them, making them the perfect promoter and an ideal way to gain new subscriptions.
(The best affiliate creators will have subscribed to your service for a while, which makes their recommendations especially compelling).
Here’s why your subscription service will benefit from an affiliate program:
- Affiliates often have a significant following. This makes it easier to reach a highly targeted audience compared to regular online ads, and increases their odds of success. Affiliates have already done the hard work of building an audience that matches yours, and their recommendations are more trusted than ads.
- Since affiliate recommendations are trusted, the people they refer are more likely to subscribe.
- Affiliate marketing works like a positive customer review. New audiences immediately trust your service because they heard about its benefits from existing subscribers.
- People who’ve been referred by a trusted source are also more likely to renew their subscription. This leads to increased customer retention, reduced churn, and higher overall customer lifetime value.
- Affiliate marketing is a cheaper way to increase site impressions, as compared to search engine ads (PPCs).
- Affiliate marketing is low risk, since you don’t pay for anything until an affiliate link results in a paid subscription.
- It works well for any type of subscription service, whether it’s a curated box, software, or content subscription.
- Affiliate marketing software can be used to easily track metrics and sales made through affiliate links.
- You get to enjoy more traffic and subscriptions, a higher overall customer lifetime value and increased revenue.
Should your subscription service use affiliate marketing?
With all these proven benefits, the affiliate marketing industry has grown by leaps and bounds. Experts predict the industry will grow beyond $8 billion by 2022, almost twice as much as it was worth in 2015.
Affiliate programs work well for most subscription services. But you can’t start a subscription affiliate program just because the stats look good.
Your subscription service business should meet the following requirements in order to see the most success with an affiliate program:
- Willingness to pay a cash commission on every affiliate sale.
- A high profit margin and a healthy subscriber base, to support the financial needs of an affiliate program.
- A pool of potential affiliates who share your audience – preferably content creators who have a large following in your target market. It’s a bonus if you can find content creators who have already subscribed to your services. This makes it easy for them to authentically promote your affiliate program.
- A subscription service that appeals to a wide audience – the more users you attract, the easier it will be to sustain your program.
An effective alternative to affiliate programs
If your subscription business isn’t ready for an affiliate program, a referral program may be a better fit.
Referral programs encourage and reward your existing subscribers for recommending your service to their friends, colleagues, and family.
You still enjoy the benefits of word-of-mouth recommendations. (In fact, recommendations among friends are especially powerful.) Plus, every customer who shares through your referral program personally knows and loves the benefits of your subscription service.
Unlike affiliate programs, referral programs allow you to give rewards other than cash, such as discounts, upgrades, free products, or a free month of subscription. This makes referral programs particularly cost-effective.
Referral Rock software can run both referral and affiliate programs, giving you the flexibility to adapt as your subscription service grows.
9 best practices in subscription affiliate marketing
While affiliate marketing has a number of benefits, there are some guiding principles that can make it especially successful for your subscription services.:
1. Choose the right commission rate
It’s important to offer attractive cash commissions for your affiliates. (You could also make payments through Paypal and Visa gift cards for convenience.)
Choose between offering a flat fee or a percentage of each sale. A flat fee can make it easier to predict your spending. But percentages may attract more affiliates because their earnings per sale are uncapped.
Other affiliate marketing commission best practices for a subscription service include:
- Only pay affiliates for confirmed subscription sales. This keeps you from spending money on advertising that has no tangible results.
- Make your commission rate attractive and competitive within your industry. Do some research into what your competitors are offering (if they run their own affiliate programs). But make sure you have enough cash flow to consistently pay out affiliate commissions.
- Determine your program’s commission structure.
- How long will an affiliate be eligible to earn commission after someone clicks their link?
- Set your attribution rules. If someone clicks on multiple affiliate links and then subscribes, which affiliate earns the commission – the one whose link was clicked on first or most recently?
- Are there limitations on how much commission an affiliate can earn, depending on the subscription length or type of subscription plan?
- Does the affiliate lose some or all of the commission if their referred subscriber cancels their subscription?
2. Offer recurring commissions
As a subscription service provider, a recurring commission model will ensure your affiliate program achieves the greatest success.
Recurring commission models allow affiliates to earn commission on renewed subscriptions that were initially purchased via their affiliate link. This is very attractive to affiliates because you provide a consistent revenue stream for them.
3. Plan to further incentivize your best affiliates
Speaking of attracting affiliates, setting up added commission incentives will attract affiliates and keep them motivated to promote you regularly.
For example, you could permanently increase an affiliate’s commission rate when they hit certain lifetime sales thresholds.
Or you could reward each month’s best-performing affiliates with extra cash or a valuable gift.
Oyster offers a whole suite of affiliate bonuses for bringing in high-value customers.
4. Set program goals
Goals allow you to measure your program’s success accurately. But the best goals are SMART – specific, measurable, attainable, relevant, and time-bound.
For instance, you could set affiliate program goals based on these questions:
- How much money do you hope to earn through affiliates over a specific period? (three months, six months, or annually)
- How many subscriptions do you want your affiliates to generate, and within what period?
- What’s your ideal conversion rate (out of all the affiliate clicks you get within a particular time frame, what percentage do you hope will result in purchases?)
You also need to set target audience goals. Know who you’d like to target, so you can find affiliates who will bring in this target audience. This is especially important if your subscription service caters to a niche audience.
5. Use affiliate marketing software to set up your program
Affiliate software is essential for tracking affiliate sales. It instantly shows you which affiliates are responsible for which sales. Plus, the software will automatically pay commissions to affiliates as soon as you receive a new sale.
Affiliate software is also much better for subscription services than registering for an affiliate network.
- Software is better for hand-picking affiliates from your own subscriber base and fostering relationships with them. Affiliate networks will limit the affiliates you can choose from to people registered within their network. They will also own all communication and relationships with affiliates.
- You won’t have to pay an extra fee to use an affiliate network. Networks charge their own “finder’s fee” on top of the commission you pay affiliates. Every time you make a sale, you have to pay the network an added fee.
- With affiliate software, you won’t be directly competing with other affiliate programs for the affiliates you want. Networks host many programs and promote them alongside each other, forcing you to closely compete with all the other programs on the network.
- And most importantly, affiliate management software gives you full control of all your affiliate program data and all other aspects of running your program. But networks own – and hold back – crucial data, so you can’t make the most informed decisions on how to refine your program.
Here’s what makes Referral Rock affiliate software stand out.
6. Reach out to existing subscribers and recruit them as affiliates
Why is it best to focus on recruiting existing subscribers as affiliates? Existing subscribers already know the benefits of your subscription, so they can authentically communicate these benefits to their audience.
Think of someone who visits Yelp for reviews, looking for the best places to go and which ones to avoid. They trust the reviewers, as the reviewers have personal experience visiting those places.
It’s the same way with affiliates. When an existing subscriber shares what they love about your subscription service, people will listen because they share from a place of experience.
However, not every subscriber will make a good affiliate. Sift out the best choices by gauging their ability to create content tailored to your audience and their level of influence. There are two ways to do this:
- Open an affiliate application to all subscribers, then screen and approve the affiliates you want.
- Hand-pick subscribers who are also creators and have built a high level of trust with their audiences. Remember, trust is more important than their number of followers.
Personally reach out to each prospective affiliate, thank them for being a subscriber, and invite them to join your affiliate program.
7. Create an affiliate marketing agreement
Once you’ve chosen your ideal affiliates, draw up a written affiliate marketing agreement for affiliates to read and sign before joining the program.
An affiliate agreement sets expectations for the program, and clearly outlines the terms and standards. It also protects your brand in case affiliates engage in any unethical activity.
Your agreement should cover the following:
- How affiliates can and can’t promote your business (i.e., no spammy linking, no outbidding you for paid branded keywords)
- Legal requirements to protect your business: For example, all affiliates must be compliant with the Food and Trade Commission guidelines and clearly state they earn a commission from promoting your service.
- All conditions related to your affiliate commission:
- The commission rate
- What makes affiliates eligible for a commission
- How long affiliates are eligible for the commission (length of tracking cookies)
- How often commission payouts occur
- Any other terms and conditions
8. Train and communicate with your affiliates
Beyond what the affiliate agreement states, it’s important to onboard and train them on the finer details of your affiliate partnership.
Schedule a personal meeting to tell them about the key benefits of your subscription and what makes it stand out from competitors. Give them quality brand assets to promote your subscription, such as any campaign videos, images, banners, and email templates.
And if they aren’t already subscribers, give them a chance to try your service for free so they can promote your subscription based on first-hand experience.
Once your affiliates have been onboarded, regularly fill them in on subscription and affiliate program updates. This can be done for all your affiliates through a newsletter, webinar, or affiliate-exclusive online group.
Make sure affiliates know how to contact you for any questions or concerns, and be available to provide the information they need.
An example of affiliate resources you could offer, from Leadpages.
9. Track affiliate sales
Affiliate management software can help you track affiliate sales and revenue, but you’ll need to use that data to determine whether you’ve achieved the goals you set. Tracking data will tell you what’s working within your program, and what needs to change moving forward.
Subscription affiliate marketing examples
To show you how these best practices work, here are three top subscription service affiliate programs you can borrow from.
We’ve highlighted a software subscription, a subscription box, and a digital content subscription. There’s something here to inspire all types of subscription services looking to start an affiliate program.
ActiveCampaign is a software subscription service involved in customer experience automation. The affiliate program makes its benefits clear from the start by listing how much an affiliate can make with each referral.
The attractive lifetime commissions start at 20%, and recur whenever referred subscribers renew. Affiliates can even increase their commission rate to 30% if a subscriber they brought in continues renewing their subscription.
This can lead to massive earnings. ActiveCampaign reports “the average affiliate earns $1,350 per referral, and there are influencers in the program earning hundreds of thousands of dollars every month!”
The brand also provides a starter pack of tips and tools so affiliates can get their passive income stream up and running as soon as possible.
ActiveCampaign offers plenty of promotional resources, including graphics, video assets, and even access to webinars. And a dedicated portal makes it easy for affiliates to access these resources, communicate with the brand, and track sales.
Plus, affiliates have access to an exclusive online community, where they can receive updates and share tips with their fellow affiliates.
Fit Snack monthly subscription boxes provide a healthy selection of snacks each month for a subscriber’s workout needs. And their affiliate program displays several healthy best practices.
Beyond detailing the monetary benefits of joining their affiliate program (up to $8 for every new customer brought in), the Fit Snack subscription box affiliate program states that affiliates will be first in line to receive discounts.
Fit Snack also provides information about who qualifies to become their affiliate – bloggers and social media personalities with a significant following (50,000 followers or 100,000 site visitors) interested in nutrition, wellness, and fitness.
They invite promising potential affiliates to try their boxes for free, and smaller creators can still qualify to receive a box at a discount.
Kajabi deals with educational content subscriptions. The first sentence on their affiliate partnership page is enough to tell potential affiliates what they’ll get out of signing up with Kajabi. The statement “earn commissions for every activated referral” already promises a consistent source of passive income.
And commissions aren’t just competitive. The project offers 30%, recurring over the lifetime of a subscriber. So affiliates can keep earning forever, as long as a customer moves past the trial period and keeps their subscription active.
Furthermore, the terms for joining the affiliate partner program are easy to find and clear about the audience Kajabi is looking for (entrepreneurs).
The program’s stack of helpful resources (i.e., customizable templates, webinars only available to affiliates and other partners, all-in-one-video asset pages) promise potential affiliates that working with them won’t be hard.
Kajabi also provides different partner levels – with extra rewards any time an affiliate moves up a level – which shows they have a solid system in place to keep motivating affiliates.
Treat your subscription affiliate program like a long-term business investment that will yield substantial rewards.
Carefully set your goals, ensure there’s enough money to fund the program, and choose the right affiliates. Follow affiliate marketing best practices to take care of your affiliates, so the program benefits you in the long run. And of course, use a dedicated software tool as your program’s backbone to see the best results.
You can build an affiliate program from scratch and launch it within days. At Referral Rock, we create a seamless affiliate sharing experience with our easy-to-use marketing platform. See for yourself – start for free today.