MBA2182 4 Affiliate Program Models to Make More Sales + Free Ride Friday

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Hey, welcome to the $100 MBA show where awesome business builders come to get better every single day with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of Webinar Ninja, an inhibited software company. I started my co founder back in 2014 and today is Free Riot Friday. On Free Riot Fridays, we give away a lifetime membership to one of our programs. We're giving away our Automated webinar challenge, a $500 course we sell over at webinarninja.com AWC to help you automate your leads and sales with automated webinars. Or you can win it for free. Just leave us an Apple Podcast rating and review and you enter our weekly random draw we call Free Ride Friday. Listen in on Friday, just like today, to see if you won. We announced this week's winner a little bit later in the episode. In today's lesson, you will learn four Affiliate Program Mod to Make More Sales Affiliate marketing is one of the most powerful ways to sell your products and services. You're basically hiring an army of people around the world to sell for you. 247 big part of our success, especially initially with our software company Webinar Ninja, came from our affiliate marketing strategy. We literally have thousands of creators, bloggers, YouTubers creating content to promote our product. And of course, in exchange, when we make a sale through a referral, they get an affiliate commission. This allows you to have a lot of backlinks and a lot of traffic coming to your website. If you want to build an affiliate program and want to look at what are the different ways you can set up your program. Your model? You're in luck because in today's episode, I'm going to break down four affiliate program models that you might want to choose from to run your affiliate marketing. I'll walk you through why you'd want to choose one over the other, depending on your business, and why choosing the right affiliate program model at the start is so important. Let's get into it. Let's get down to business Let me.

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Affiliate programs are a great way for you to basically open the floodgates for you to get people to sell for you. If you don't have a sales team, if you don't have a huge marketing team or a marketing budget, affiliate marketing is a good way for you to sell your products. Market them with no out of pocket expense because you only pay commissions or referral fees when you make a sale. Now this episode is not about the technical aspects of putting together your affiliate program. There's other episodes in our archives. Just go ahead and search over at our website 100- MBA-NET where I break down different software options that you can use. Today's lesson is about deciding on a program model. There's different ways you can set up your affiliate program to incentivize other people to be affiliates and to promote and sell your products. So let's go through them now and talk a little about why you'd want to choose one over the other. The first model is straight up commission and reoccurring commission depending on your product. Say for example, you have a software product or membership of some sort, a community that you charge for month over month or year over year. You May want to offer a reoccurring commission to your affiliates. Now there are no rules to this. You can offer 30% commission, 40% commission to the affiliate on the sale price or you can decide to go lower like 20% commission. A lot of businesses make the mistake where they say I'm gonna go with other businesses do or what other competitors offer in their affiliate program. That's not the best way to go at it. What you want to do is make sure you're profitable. Make sure that even after you give that affiliate commission for the sale, remember if you're gonna choose reoccurring, then you're gonna have to pay that commission every single time your paying customer pays you. Can you absorb that fee? Can you absorb the fee plus the cost of running your business and providing that service? And that's how you decide the percentage. Now this is probably the most popular way of doing commissions on affiliate programs because it's very attractive to other affiliates that want to promote you. It's also the most generous because it's month over month if it's reoccurring and it's a percentage of the sale if it's not reoccurring. So even if you're selling a one time course, let's say the course is $2,000 and, and you offer 30% commission, that's $600. That's pretty good per sale. That affiliate made $600 in this scenario by just promoting your course. They didn't have to deliver the course or create the course or anything like that. And so as you can see, percentage commission, whether it's one time or reoccurring is quite attractive to the affiliate. But remember, this is probably going to cost you the most as a business. So make sure that your margins can account for this percentage or whatever percentage you decide. And of course with this model, you're going to have to choose if this is a one time commission, whether it's a one time product like a one time course or a reoccurring commission like a software. Now there are software companies that do one time commission, so just keep that in mind. So they might say you're going to get 50% of the first payment, but after that all of the commission is ours or all the wholesale price is ours as a company. So if somebody pays for a $500 a month type of service, they're going to get 250 for that first month, but every month after that, no more commissions. So you're going to have to decide that. And that might be an option that makes more sense for the affiliate because, hey, at least I get a big chunk, a 50% chunk. And for you, if you have a very sticky product that maybe the lifetime value of a customer is quite high and they stick around for years, it's worth it for you to give away 50% of the sale at the start. Now remember, if you have a money back guarantee, if you have a free trial, make sure you don't give out commissions until those are done. So most affiliate programs have 30 to 60 days of grace period to make sure they account for that, to make sure that affiliates only get paid. When you get paid and cannot or don't have the window of, you know, refunding a sale. Now there's still a chance a customer might quote, unquote, get a refund. This is called a chargeback, where they call a credit card company, say I didn't authorize this thing and authorizes sale, and you will be deducted that sale from your payment processor or payment processing account like Stripe or PayPal. You're now out of pocket of the wholesale. So you gotta make a note of that because you've probably already given commission if it's past the grace period and you want to make sure that that is accounted for in the next commissions for that affiliate. Most affiliates promote your product constantly and therefore you still have some time to salvage that. All right, that's number one. Reoccurring or one time commission is very straightforward. Choose the percentage, choose if it's once or reoccurring. Number two. Lead acquisition model. This is a little bit different. It's not exactly affiliate marketing. But if you are very confident about your sales cycle, turning your leads into sales. Some businesses choose this model where they will pay people for leads and not actual sales. So they'll run their affiliate program. But every time somebody acquires a lead, they pay that affiliate. It could be sort of a one time finder's fee, like for every lead they get $10. Now obviously you're gonna have to qualify this lead before you pay it out. It might be qualified with a phone call, like they schedule an appointment or something else. But the point here is, is that for some companies this is a really good way to do this because they're really confident on selling customers once they contact them, whether it's on a webinar or on a call or in person sometimes. And they just need leads to fill in their sales pipeline. This also works for a lot of SaaS companies, software companies that have free plans. So they're like, hey, get us a free plan member. If they fall under this criteria, they're considered an actual lead. And it could be things like activity on the account they've attended, their first onboarding call, whatever it is. Because, of course, you don't want anybody to gain the system and just sign up with fake emails and just try to take your money for saying, hey, I got you some leads. Most of the businesses that use this actual model speak to the customer on a call to qualify them. So this is a great model. Again, if all you need is leads. And, you know, if you have good leads, you can get sales. All right, model number three, it's a little bit like a finder's fee and the reoccurring commission. And I'll give you an example. There are businesses that will say, hey, we're going to pay you for the first 12 months. A company sticks around and pays us month over month, but after 12 months, that's it. We will take the fee. A good example of this is ConvertKit. ConvertKit runs a pretty robust affiliate program. They've been public about how much their affiliate program has allowed them to grow and be a big part of their market success. But they have a program where they give commission month over month, reoccurring, but it's only for the first 24 months. Now, my estimate estimation is that they did the calculation, they did the math. They maybe know that customers on average, stay longer than that, three years, four years, and that they can afford to go 24 months, but after that, they have the full commission amount or they have the full sale amount. I should say this allows you to market it as a reoccurring commission type of sale, but not without limits. Right? You have some limits there so that at a certain point, you could stop giving commissions.

Oh, could this vintage store be any cuter?

Right.

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Except Discover in a little place like this?

I don't think so, Jennifer.

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Right? So we shouldn't get the parachute pants.

These are making a comeback, I think.

Discover is accepted at 99 of places.

That take credit cards nationwide, based on.

The February 2025 Nielsen report. All right, we talked about the first three models of our affiliate program, model options. Let's talk about number four, and that's referrals and perks. The classic example of this is PayPal. When PayPal launched, they started a referral program that is kind of seen as the godfather of viral Marketing where they gave people $10 anytime they would refer somebody else to PayPal. Now PayPal knows that hey, a $10 fee is nothing compared to what we're going to make in the future to our average customer on fees, on transactions, on other things, on exchange rates. Another example of this is perks, not cash that's given to the actual customer inside the product. I'm referring to Dropbox. When Dropbox came out, same thing. You would share Dropbox and they would give you more memory in your Dropbox account. Every time you shared, they'd upgrade your account to like a maximum of 1 GB. If you referred a friend to Dropbox and every time you refer somebody, they would upgrade your account like about 50 megabytes every single time to a maximum of 1 GB. So it doesn't actually have to be money, it could just be something that the user, your customer really wants. Now you might be saying Omar, but I sell courses, I sell coaching, I sell physical products. How could this actually apply to me? Well, I've seen a lot of e commerce stores use this model. By giving them store credit for every referral or for every hundred dollars spent by a Referral, they get $20 off their next purchase. I've seen online course builders and coaches give products away. For every referral you refer one person, you get this extra module, you refer five people, you get a group coaching call with me, you refer 10 people, you get a one on one coaching call, you refer 50 people, you get a free ticket to my live event. This is kind of how it goes. And you can see that you don't really need to have money exchan hands to incentivize people to refer other people. Now this is technically not an affiliate program, it's more of a referral program because you're incentivizing your own customers to help you spread the word. But you can also open it up to non customers so they don't actually have to be a customer to be able to refer and get this credit or get these bonuses. When we launched Webinar Ninja, we actually started out with a kind of discount referral program before we did our affiliate program. What this looked like is that every customer would get like $50 credit to their account every time they refer a customer to the maximum of our annual plan price. So say for example, our annual Plan price was $300. After they've referred six people, they had a account for free that year. And that's kind of where it stopped. They get a free year, but for us it was worth it because for every new customer they would refer six customers and those six customers would want to do the same. So it was really a great way for us to spread the word or get our customers to spread the word without again any out of pocket expense. So there you have it. Those are four affiliate program models for you. Number one, straight up commission either one time or reoccurring. Number two, just giving them commission for a qualified lead. Number three, a combo of reoccurring, but it ends at a certain period of time after 12 months, 24 months, whatever works for your business. And number four, referrals where they get rewards, kickbacks, gifts, perks, even swag works. Thanks so much for listening to the $100 MBA show. Today's episode's not over though. It's Free Ride Friday. Let's see who won this week's Free Ride. And the winner is Alexandra, 66. Alexandra says Kate Erickson is an amazing teacher. Five stars. K is such an engaging teacher. I really enjoyed her perspective on scaling an online business with systems. She made it so easy to understand and actionable. Thanks Kate and Omar, of course. Kate Erickson was one of our guest teachers. Look her up. Look up her episode over at 100 MBA NET in the search bar. Up top. Alexandra, congratulations. You won our free ride to the Automated Webinar Challenge course over@webinarninja.com AWC. Your mission is to email me at Omar MBA net so I can hook you up with the lifetime membership to the Automated Webinar Challenge. If you want to win a free ride, just leave us an Apple Podcast rating and review and see if you won. Listen in on Friday. You're in the draw to win until you win once you leave us a review. Thanks in advance for dropping us love on Apple Podcast. Before I go, I want to leave you with this. One of the mistakes that business owners make when they launch an affiliate program is they launch it and they don't provide materials for their affiliates. They don't offer them any sales copy or images or graphics or videos so that they can use it to promote it to their email list, to their audience, to their social following. Providing that content, those materials makes it super simple and easy for them, making it easy for you to get traffic to your site and more customers. So give them what they need. Give them those materials. Thanks so much for listening and I'll check you in Monday's episode. I'll see you then. Take care.

Of.

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