Affiliate Marketing – The Secret Growth Hack to Building Your Program

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I'm a marketing expert, a chef-in-training and a San Francisco resident. Also, I started this blog, Growth Marketing Pro and built it into a 6-figure passive income business in 18 months.
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The secret growth hack that built an affiliate marketing program that grew our startup from $2 million to $14 million in just 2 years.

I had an epiphany about life that led me to uncover the most effective growth hack I’ve ever thought of.

It’s the secret growth hack that grew our business from $2 million to $14 million in just 2 years.

Once I figured it out, the marketing community went wild.

I started to get invited to speak on podcasts…

and radio shows…

and to lecture at business schools…

and to speak at conferences around the world.

This tactic that I discovered (and what I’m about to reveal to you here in this post), has also been featured in a number of the most cutting edge marketing books and top university courses.

It’s a funny story, how I figured it all out, and I’ll tell it to you here.

But the secret to building an affiliate program lies in identifying a basic human need that we all have, and how you can leverage it to build strong relationships with people, prospects and partners.

But before I reveal the secret, let’s review — What exactly IS an affiliate marketing program anyway?

First off, what’s an affiliate marketing program?

Very few people actually know what an affiliate marketing program is, how they work or how to build one.

affiliate marketing - what is it?

I used to be one of those people.

But now I know that this marketing channel is a hidden gem.

If you learn how to do it correctly it can drive 100% of your business — all by itself.

An affiliate marketing program is when you build partnerships with bloggers and influencers in your space that have an online audience and agree to pay them per lead that they send to your site.

Usually, you both sign an agreement in which the affiliate is paid at a flat rate per conversion, or at a percentage commission of closed deals. But sometimes, it’s a bit more casual… a friendly handshake agreement to pay $X for each converted lead. It’s really up to you and what makes the most sense for your business.

If you can offer an appealing and motivating payout rate per lead, the relationship is mutually beneficial for both you and the affiliate.

The affiliates benefit because they can now monetize traffic to their site. You benefit because you now have an influencer vouching for your product and sending qualified traffic to your site with intent to buy.

Every company under the sun is trying to figure out how to build an affiliate program. Because once your affiliate marketing program is up and running, it is SO incredibly profitable. You don’t even need to have cash upfront to get started.

I get calls non-stop from companies BEGGING me to come and build their affiliate program for them. But usually I just send them to this blog post. All you have to do is follow the instructions I lay out for you here…

Why does affiliate marketing work? Because it’s “friendly” traffic.

Online bloggers and influencers who have a loyal following, have readers who return to their site time and time again. These readers have established trust with the blog and content they find there. Growth Marketing Pro has a super engaged audience of hundreds of thousands of marketers and entrepreneurs. They read, they trust us, they comment on our posts, they email us and engage!

So when a blogger writes about your company and can recommend it to their readers in a truly genuine way, that blogger is sending a “warm lead” to your site. This is someone who’s already been primed, pre-qualified by learning a bit about your site and is interested enough to click through to learn more.

To give you an idea of how strong affiliate leads are, get this: on average, companies that implement affiliate programs get their highest conversion rates from affiliates. Mark and I have found that affiliate partnerships yield 4.4X the conversion rate of an average website visitor.

So this stuff is powerful.

How to start an affiliate marketing program

About four years ago, while doing growth marketing for a real estate technology company in San Francisco, I was tasked with building an affiliate program from the ground up.

I had NO idea what an affiliate program was or how to build one.

So the first thing I did was research and create a list of all the financial technology and investing bloggers in our space and reach out to them via email to invite them to join our affiliate program…

affiliate marketing

I sent out 50 emails and got 12 responses. All of which did not think the partnership would be a fit or were not interested at this time.

That effort produced zero affiliate partnerships.

?

It wasn’t until I was working on a side project of mine, when I unlocked the secret to building affiliate relationships.

How I discovered the secret to building affiliate relationships…

I used to have a little blog called “Top Five CityGuide.”

It was a blog where I aggregated survey responses from hundreds of New Yorkers and San Franciscans about their absolute favorite restaurants in various categories. Each week I’d post a new blog post based off the data I collected “Top Five Brunch Spots in NYC”, “Top Five Burgers in NYC”, “Top Five Coffee Spots in NYC”. Here’s a screenshot of one of the blog posts below…

affiliate marketing

Each time I wrote a new blog post, I also posted about it on Facebook and Twitter, tagging every restaurant or company that was mentioned in the blog post.

To my surprise, these renowned restaurants and food brands were extremely flattered by the mention and over 50% of them “liked”, “re-posted” and “shared” my tweets…

affiliate marketing
affiliate marketing
registered affiliates
I was blown away.
I couldn’t believe these big brands were flattered about being featured on my little blog.

It was at this point that I came to a realization about life that helped to drive my growth marketing career forward.

People love being recognized.

Recognition is a basic human need. See Maslow’s hierarchy of needs below.

maslows-hierachy-of-needs

Every human person is flattered and excited when they get recognized.

That includes big brands and companies. Since after all, when you pull back the curtain, brands and companies are just made up of a bunch of human people.

And people don’t get recognized nearly as often as you’d think. In fact, it rarely happens.

Using recognition to drive growth

So the second time I tried building an affiliate program at that real estate company, I took a whole different approach.

I put together a bunch of blog content around the

  • “Top 60 Real Estate Investing Blogs”
  • “Top 76 Alternative Investing Blogs”
  • “Top 75 Real Estate Blogs”
  • “Top 14 Personal Finance Blogs”
  • and many many more.

As many categories as I could possibly think of that related to FinTech or the real estate industry. All together we ended up mentioning over 373 different blogs, podcasts, books and influencers within these “Top” lists that we posted to the blog of this company’s website. I wanted to give recognition to as many people as possible.

Next, I reached out to every single person that was mentioned in one of our blog posts, taking a different approach than the first time I reached out via email- I didn’t mention our affiliate program at all.

affiliate marketing

Here’s the response I got this time around…

affiliate marketing
how to build an affiliate marketing program

The results

By first giving recognition to the blogger for their fantastic content, I was able to “warm up” the relationship, and therefore Joe and the rest of the bloggers I spoke to were far more open to learning about our affiliate program.

Not to mention all the shares and backlinks we gained when these 373 influencers shared our post with their followers.

Out of the 373 influencers we emailed, 66 of them ended up signing up for our affiliate program. That’s an 18% conversion rate!

affiliate marketing

By utilizing this strategy alone, I was able to grow our affiliate program 9X year over year ?

Not only did affiliate traffic grow exponentially- but the quality of the leads proved to be among the strongest relative to other channels like SEM, Native and Paid Social.

Meaning that signups that came from our affiliate program, became customers at a higher rate and spent more dollars on our platform than customers from other channels.

The program grew and grew to the point where we were getting so many leads from the affiliate program, that we actually had to pause spend on other channels like Facebook and Adwords. We simply didn’t have enough marketing budget to pay out all our affiliates AND run Facebook and Google ads.

When I left, that affiliate program was the largest and highest ROI channel running at this company.

How to start tracking your affiliate marketing program

Tracking your affiliate marketing program is extremely important if you want the operation to run smoothly. Things are going to get hairy very quickly if you’re not tracking how many leads your affiliates are sending you.

Each affiliate will require their own unique link. That way, you can identify how many leads came to your site via that unique link and tie it back to that affiliate so you can pay them appropriately.

Tracking affiliates the right way

affiliate software

Like I said, if you’re not tracking carefully, things will get hairy quickly.

Why? Because all your affiliates are going to want to know how they’re performing. If they are spending time promoting your product to their audience, they will want to know how many clicks, conversions and dollars they’ve earned.

The great news is that there’s a simple and 100% free way for you to get started with tracking your affiliate program. As with anything in marketing (and business), you should run the most minimum viable test before going all in on something more expensive and “heavy weight.” So if you’re just starting out, you should add “UTM” parameters to your affiliate links.

To do this, you’ll use Google’s URL builder to add UTM parameters to your links.

UTM’d links are ones that have a bunch of mumbo jumbo at the end — mumbo jumbo that allows you to track users. For example: https://www.growthmarketingpro.com?utm_source=affiliate&utm_medium=affiliate-name). UTM’s will allow you to see visitors from that “source” and “medium” in Google Analytics. So you can identify how much traffic and how many leads are coming from where.

Pay your affiliates monthly and send them a monthly screenshot of your Google Analytics dashboard to show proof of their traffic and conversions.

The problem with this solution? Affiliates won’t have access to their own dashboard where they can track conversions and earnings. You’ll have to manually be sending out reports and making payouts, which can get very tedious as your affiliate program grows.

The cheap & quick software solution

Omnistar was the first platform I used to get the affiliate program off the ground and it worked wonders, and was quick and easy to set up at a cool ~$40/month.

The problem with this solution: You will be able to track in Google Analytics how many conversions you are getting from Omnistar everyday, but it can be a bit difficult to tie exactly which email conversion came from which affiliate. Also, you will need to manually pay your affiliates every month.

If that is something that’s super important to you, you might want to consider a more sophisticated solution…

A more advanced solution

Ambassador, is the affiliate marketing software to use if your business is a bit more sophisticated and you have budget for a more advanced tool.

The Ambassador platform makes it easy for affiliates to sign up, access their unique tracking link and monitor their clicks, conversions and commission. You can even pay your affiliates through the platform.

How did I find out about Ambassador? Well, first I used them to build out our referral program at that real estate company which scaled 10X within 45 days of implementing Ambassador. Enough said. I implemented it on the affiliate marketing side as soon as I saw those results.

Click here to try Ambassador.

So you have affiliate partners — now what?

Once someone agrees to be an affiliate partner you’re on your way!

To get them in the door, you’ll say something like: “When you sign up as an affiliate, you’ll get a unique link that you can use any time you refer to our company. When someone clicks on your link and signs up or makes a purchase, we’ll pay you $X in commission.”

Once an affiliate signs up, the first thing they need their unique link. Every affiliate marketing partner should have their own unique tracking link. That way, whenever they write about your product, they’ll be able to link to your site and get credit for every click or every sale.

If you use a tracking platform like Ambassador, your affiliates will immediately get sent to a dashboard where they can access their unique tracking link.

How do you get affiliates to write about your product?

It’s one thing to convince someone to sign up as an affiliate.

You: “Hey, do you want to make money for writing about my product on your blog?”

Them: “Uh, yeah.”

It’s another thing to convince them to actually sit down, and take the time to create content that will drive affiliate conversions.Your product is likely not the only product that they’ve signed up to promote.

You: “Hey, so I noticed you signed up to be an affiliate, but I’m not seeing any traffic from your site yet…”

Them: “Oh yeah, I’ve been meaning to, but I just haven’t had the time to get around to writing new content”

So, how do you actually encourage your new affiliates to take the time to write about your product? How can you get your new partners to prioritize producing your content and promoting your content ahead of their other partnerships?

Provide affiliates with the tools they need to be successful

This includes:

  1. Pre-written blog posts
  2. Best practices around creative (what works for your company when you write about your product?)
  3. Examples of high converting headlines
  4. Important data points around your company
  5. Press pieces that mention your company
  6. Examples of blog posts from successful affiliates
  7. Set up a kick-off call where you can brainstorm ideas together

Incentivize your affiliate marketing partners

Say it’s a month or two later and you’re still not seeing them send traffic to your site, how do you motivate them to get started?

I’ll tell you how — you pay them!

Money talks.

Check it out…

You: “Hey, so you know how I told you earlier that I’d pay you $40 per conversion? Well, if you send over your first few conversions before the end of the month, you can lock in a special rate $60 per conversion for good.”

Them: “Oh shit, sweet deal. I’m going to get on writing your content ASAP!”

Reward affiliate partners that send strong leads

Before going ahead and offering more money per conversion, you’ll have to make sure that the numbers back out for your company. Make sure you’re thinking about your return on investment (ROI) when offering a special deal. You’ll want to make sure that you’re still getting value from these conversions.

That might mean that you start newer affiliates at a lower pricing tier and promote them to higher priced tiers once you determine that they send you high quality traffic.

It’s totally okay to have pay different affiliates different base commissions per conversion.

Sucky Affiliate: “Hey, can you bump up my base commission rate?”

You: “Uh, no. None of the leads you are sending me are actually converting. They’re low quality and I can hardly afford to pay you what I’m paying you. In fact, I’m considering terminating our partnership if I don’t see an improvement in lead quality before the end of the month.

Awesome Affiliate:  “Hey, can you bump up my base commission rate?”

You: “Yes — the leads you are sending me are awesome and spending a lot of money our product. I can bump up your commission rate by $X.”

Usually anywhere from $5-$20 extra is very much appreciated!

Stay top of mind with your affiliate marketing partners

Once you’ve gotten your affiliate partners to “activate” or make their first few referrals that convert on your site, you’ll want to continue to stay top of mind so that they’re constantly motivated to continue pumping out content with your company’s name on it.

There are a few ways you can do this.

  1. Email drip campaign: Enter your affiliate’s emails into an automated email drip campaign that sends them an email every week with data and nuggets of information that they can use in their content.
  2. Press: Send your affiliates any articles or press mentions about your company. They can share this with their audience or integrate the news into their own content.
  3. Build relationships– Follow your affiliates on Twitter. Connect on Linkedin. Join Facebook groups and engage in their communities. Integrate yourself into their world and bring value when you can by sharing articles they might be interested in and liking their content.
  4. Host events: Invite your affiliate partners to company events or offer to host a meetup at your office. If you can provide value to your affiliate marketing partners, they will want to return the favor.

Conclusion

People love to be recognized.

  1. Identify influencers you want to partner with.
  2. Create a “top list” blog post that recognizes them for high quality content.
  3. Email them to let them know you think they’re awesome and they’ve been featured.
  4. Pitch your affiliate marketing program.
  5. Manage your affiliate program through a tool like Ambassador or one of the solutions I mentioned earlier.
  6. Set up your affiliates for success and motivate them to get started.
  7. Stay top of mind with your affiliate partners

If you carefully track your affiliate marketing traffic, you’ll soon discover that it can be an incredibly valuable source of leads.

Affiliate traffic is too valuable to ignore!

The great thing about an affiliate program is that it’s relatively inexpensive. Rather than paying per click or per impression like you do on Google Adwords or Facebook, you only pay for actual signups on your site. No money wasted!

If you’re looking for high quality traffic growth, an affiliate program is a great place to start.

Get even a little more information on creating an affiliate program and cracking Google’s algorithm with my webinar below!

*Articles on this blog contain affiliate links that GMP receives a small commission from at no cost to you. We only recommend tools we trust. And never ones we don't trust.


46 Comments

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    Joanna Q

    Hi Hailey!

    Awesome and very detailed discussion on affiliate marketing! I just have a question though. I’ve been looking at this option for quite some time, and my one concern is that do I need to spend money with affiliate marketing?

    Cheers and more power!

    Reply
    • Avatar

      Hailey Friedman

      Hi Joanna!
      I hear your concern. However, one reason I love affiliate marketing is because it tends to be the most affordable marketing channel. This is because you are only paying affiliates for people that converted on your site into an actual customer. It’s CPA — cost per acquisition. When you compare this to other paid marketing channels like Facebook or Adwords, you’re going to end up paying CPM — cost per impressions, or CPC — cost per click. In these cases you end up wasting a lot of money on people who do not become actual customers. This won’t happen with affiliate marketing. You do need to have some form of budget in order to be able to payout affiliates for the leads they send, but you’ll want it to be a percentage of the revenue you are making, so that your margins are high enough that you’re making money. I have seen affiliates make anywhere between 5%-40% of revenue. Keep in mind, the higher the commission rate, the harder affiliates will work to promote you and prioritize you as a partner.

      Hope this helps!
      🙂
      Hailey

      Reply
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    Joseph

    Nice post, Hailey. I love affiliate marketing because you only pay for success, unlike Facebook or Google adwords which can be a huge cash drain.

    Reply
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      Hailey Friedman

      Agreed, 100%. While not completely free like an SEO strategy would be, affiliate marketing is definitely among the more cost-effective ways to get customers. It’s a tactic I often recommend to businesses that are trying to get customers with a very small budget. This is a topic I’ve written more about here, and I also discuss it on my free Growth Webinar here.

      Reply
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    Julie Singer

    To me the most poignant part of this article is the piece that explains that all humans and businesses feel good from recognition. Well done.

    Reply
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      Hailey Friedman

      Thanks Julie! That powerful take-away, that everyone appreciates recognition, is so transferrable. I’ve personally leveraged this fact to build hundreds of relationships and partnerships for a variety of businesses. Glad you enjoyed this piece 🙂

      Reply
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      Marina

      Aaah the underrated affiliate marketing! You know, I’ve always been one of those people who unknowingly was trapped in the amazing scheme of affiliate marketing. I follow a few bloggers and influencers, and every time they recommend a product, the value of that product increases dramatically in my eyes. You are spot on about how affiliate marketing, if done right, is the hidden gem to a company’s success!

      Reply
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    Love this article, thanks so much Haily! I will definitely be using some of this stuff for my business.

    Reply
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      Hailey Friedman

      Glad to hear it Josh! Affiliate marketing can have a big influence on your business. Best of luck.

      Reply
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    Hannah Edelman

    Such a great post Hailey!
    I think the idea of being recognized extends to all careers and is such an important take away from this piece.

    Reply
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      Hailey Friedman

      Thanks Hannah! Wanting recognition is part of what makes us human 🙂 and it’s what makes this tactic so much fun to implement, because you get to make people feel good in the process of growing your business.

      Reply
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    Lizzie Melching

    Great advice for maintaining affiliate partner relationships! I’ve noticed that content creation from your affiliate partners can start out strong and slow down over time. I think sending them pre-written blog posts is a great way to address the problem because you can make sure the content represents your business accurately and all your affiliates have to do is post it! Thanks for the tip.

    Reply
    • Avatar

      Hailey Friedman

      Absolutely Lizzie! Keeping affiliates partners engaged can be a full-time job for many. But I’ve found that if you set up an email sequence with emails once a week or once every other week and you’re constantly feeding your affiliates with new content, this can be a great way to stay top of mind with your partners (while automating much of the upkeep work).

      Reply
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    Kristina

    Great post! Affiliates definitely need a way to track their performance and the impact of each post. What is measured is managed! Without a view into performance, it’s hard to justify additional investment.

    Reply
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      Hailey Friedman

      Thanks Kristina! Exactly. And I’ve found that the sooner affiliates get rewarded, the sooner they want to work on referring more business your way. It’s almost like Pavlovian conditioning. Which is another reason it makes sense to invest in a platform that makes the referral/affiliate process smooth and instantaneous

      Reply
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    Mark

    How do I know if an affiliate program will work for my business?”

    Reply
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      Hailey Friedman

      Great question Mark. A great way to determine if an affiliate program will work for your business is to google target keywords in your niche, and see if the results show any blogs or influencers that are writing content that could potentially feature your product. If so, there is a great opportunity here for your to build partnerships with these people. If not, maybe influencers in your space have content on Youtube or Instagram or Podcasts. Investigate all these channels when looking for potential affiliates. Usually if there is strong search volume in your niche, there will be opportunities for affiliate partnerships. Hope that helps!

      Reply
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    Dan

    Great article! Will definitely be using this. Adding to the bookmarks now

    Reply
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      Hailey Friedman

      Thanks Dan, glad you found it help 🙂

      Reply
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    This is a very unique and impressive way to build out an affiliate program!

    Reply
    • Avatar

      Hailey Friedman

      Thank you! Give it a go 🙂

      Reply
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    Dave

    With a consumer-focused company, I fear I can’t offer high commissions per conversation. What is the sweet spot when our cost per acquisition is low (<$10).

    Reply
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      Hailey Friedman

      Great point Dave. From what I’ve found, affiliate programs work best when affiliates can make $100+ per sale. Meaning, the product itself would likely need to sell for $200+. If your cost per acquisition is below $10, I would not recommend an affiliate program as a channel for you. However, you may want to consider looking into an influencer marketing platform like Kyndoo. That way, you can simply pay a set price per post or per engagement. If you find an influencer with an audience in your exact niche, this can pay dividends.

      Reply
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    Neha

    Really interesting, Hailey! I never thought of the hierarchy of needs like this, but it’s so true! Flattery is so useful to warming people up to building a relationship—gotta keep that in mind going forward.

    Reply
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      Hailey Friedman

      Thanks Neha! One reason I love marketing is how beautifully it often ties into psychology. Really understanding people emotionally is one of the most powerful tools I have for effectively marketing and messaging.

      Reply
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    Sofie Wise

    I love your outline of how to equip affiliate partners with the tools they need to succeed! Such helpful and thoughtful advice. Thank you Hailey!

    Reply
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    Jennifer Garzon

    If the audience that you want to attract doesn’t have like good influencers or bloggers, what should you do ? How do you proceed to find affiliates that can relate to your content ?

    Reply
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    As Always to the point. The best thing about affiliate program is that you Once you have settled and launched your business, the process never stops. Referrals from friends, bloggers, Facebook ads, paid campaigns are always useful. Anyhow, wonderful piece of writing.

    Reply
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    Efren Jr. Adorna

    I never consider an affiliate program before but reading this enlightened me that it will be a great addition as the feature of a website/business.

    Reply
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    Tom Harvey

    This is excellent, i like the idea of mentioning companies and in return they will share your page or tweet. I never thought about doing this. i want to know how big was your first payment?

    Reply
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    Jason Hashian

    How much was your initial investment? And where you stand right now?

    Reply
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    Matabel R.

    This will be very helpful in the future for my upcoming blog! Thank you!

    Reply
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    Douglas Wafula

    Hello Hailey!!
    Thanks for this information. Now I have found the information I was looking for for a very long period of time now. Now I have Learned how I can create affiliate marketing program for my blog just through simple steps. I know this information is very helpful.

    cheers
    Douglas

    Reply
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    Sudesh Kumar

    Thanks for this great and in-depth info.

    Well, I have been working in this field for a long time and one thing that I noticed to be important which is working in a niche. When you work in a niche, it becomes easy to select a product for affiliate marketing and even you get only your niche audience.

    As you have mention affiliate marketing software, Ambassador. I want to know if that is the right affiliate marketplace or not. Currently, I am using Clickbank.

    Reply
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    Hi Hailey, congratulations for your growth and success and thank you for sharing these secrets to help upcoming marketers. Your article inspires me a lot and provides me with tons of new ideas thank you so much for such a detailed article.

    Reply
  • Avatar

    Great post! I really didn’t know exactly how affiliate marketing worked, but you did a great job explaining it. When you are looking to implement something like this, should you have a budget upfront? How would you calculate the cost to get started?

    Reply
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    Matthew

    I didn’t know much about analytics and SEO but have started my blog and believe that reading your posts will help me make me my blog kicking and going very smooth with persistence and hard work.

    Reply
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    Gordon Kisakye

    Hey Hailey,
    The whole concept of depending on a person that has an already created community that trusts their content – is an often downplayed marketing concept – your article shows how to optimize this approach, thanks great article.

    Reply
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    Iris

    What is the best way for affiliates to promote your business? Through blogposts, Facebook or Instagram?

    Reply
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      Hailey Friedman

      It really depends. The cheapest way to promote a business is through SEO, so if you have SEO knowledge and expertise and can get access to free traffic by creating optimized blog posts, then great! Otherwise, you may have to pay for ads on Facebook or Instagram. Find out if SEO will work for your business here.

      Reply
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    I would to learn what your teaching

    Reply
    • Avatar

      Hailey Friedman

      A great way to learn more of our tactics is to register for our email list!

      Reply
  • Avatar

    Really enjoyable read, thank you for sharing.

    Reply
  • Avatar

    I like that you mentioned that affiliate marketing calls for friendly traffic from fans of bloggers. I will be launching a boutique business in a few years after I finish my degree in clothing tech. Perhaps I should start familiarizing myself and getting in touch with fashion bloggers so that I can get an affiliate marketing program someday.

    Reply
  • Avatar

    I’m an affiliate myself and I must say that I really got some cool ideas on how I could land some sweet affiliate deals. Sad that finding the share button but couldn’t find any.

    Reply
  • Avatar

    As an marketer myself. i have to admit that this article gave me numerous fresh ideas and the know-how to create some interesting affiliate offers. Affiliate marketing is still an amazing way of making money online in 2020 and we have to take advantage of this opportunity.Thanks for this amazing piece of content. Keep it up! Stay safe!

    Reply

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