Why your affiliate program is not making money (+ how to fix it)

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Affiliate marketing works. Recent studies show that:

  • Affiliate marketing drove 16% of all web-based orders in the US.
  • Eight in ten brands have affiliate programs.
  • Globally, the affiliate marketing industry will be worth $27.78 billion by 2027.

Those are impressive numbers! But that’s not to say that every business’ affiliate program is profitable.

If you run an online business (especially a small or mid-sized one) and have yet to see positive results from your affiliate program, this in-depth guide is for you. Here, we’ll cover:

  • The top reasons why your affiliate program is not making money.
  • Actionable strategies and tactics to fix them starting now.

But first, let’s clarify a few things.

Affiliate program not making money

A few assumptions about your online business

This post focuses exclusively on factors that directly impact your affiliate program’s success. We’ll presume that your business fundamentals are in order, and that isn’t why your affiliate program is not making money. This means:

  1. You have good quality products and services: No amount of marketing can successfully sell mediocre products and services. Make sure your offerings are good enough before focusing on driving sales through affiliates.
  2. You have a good reputation: People like to check out reviews before buying stuff online. If you have a poor reputation or no reputation — aka, your business doesn’t exist — they will hesitate to buy. Build a positive online reputation to make your affiliate program effective.
  3. Your affiliate program isn’t relatively new: Affiliate programs can immediately drive revenue for some businesses. However, it takes time for most to see significant results. On average, it can take six months to a year before your program gains momentum.
  4. You’re using the right software: You can’t run an affiliate program without the proper tools. (Here’s what to look for in an affiliate marketing plugin).

Without further ado, let’s look at:

5 reasons why your affiliate program is not making money (+ how to fix them)

Here are the top reasons why your affiliate program is not making money:

  1. Recruiting the wrong affiliates.
  2. Unattractive incentives and rewards.
  3. Ineffective tracking and reporting.
  4. Inadequate training and resources.
  5. Poor promotion of your affiliate program.

Reason #1: Recruiting the wrong affiliates

This is the biggest reason that prevents most affiliate programs from achieving meaningful results. No matter how much time, money, and effort you invest in your program, low-quality affiliates cannot drive significant revenue for your business. 

How to recruit the right affiliates

Instead of accepting affiliates at random, you need to niche down and target affiliates that fit your business.

Most people think of finding a ‘niche’ when deciding on what to sell and identifying target customers. The same principle applies to affiliate recruitment. Look for affiliates that have:

  • Used your products and services: Your existing (happy) customers make the best affiliates. Ask and reward them for promoting your offerings. Of course, relying only on past customers may be unrealistic, and that’s where the following options come in handy.
  • Demonstrated expertise: Look for experts in your industry or websites, blogs, YouTube channels, etc., that have directly created content on topics directly relevant to your business. This helps them build credibility with people.
  • An engaged audience: The quality of their audience matters more than the size. While having hundreds of thousands of followers is nice, engagement matters more. Especially if you are a smaller or medium-sized business or your affiliate program is relatively new. 
Affiliate signup page

For example, Health2Mama, a holistic wellness app (and Coupon Affiliates user), clearly defines their ideal affiliates as:

  • Lactation Experts, Doulas, Midwives & Antenatal Courses
  • Physios and Osteos
  • Personal Trainers
  • Doctors
  • Influencers / Health Websites
  • Corporates

Once you’ve identified your ideal affiliate partner, you can filter out applications that aren’t the right fit.

Reason #2: Unattractive incentives and rewards

Another reason why your affiliate program is not making money is that your incentives aren’t compelling enough.

The reason affiliate marketing is so popular is that it benefits both businesses and affiliate partners. 

Even if you have the absolute best product or service, if your competitors offer significantly higher rewards, you will struggle to find high-quality affiliates to promote your offerings.

How to determine the appropriate reward system

Step one: Research your top ten competitors’ affiliate programs and figure out their rates and payout structure. You’ll usually find this on their affiliate registration pages or by signing up for their programs.

Step two: Adjust your affiliates’ rewards. If you’re a small or mid-sized business, you may not have to meet the market rate (especially if you’re targeting micro or nano affiliates). However, your rates should be reasonable enough to convince high-quality affiliates that your program is worth joining.

Step three: Consider offering additional benefits in addition to commissions. For instance, you can provide affiliates with lower prices, free shipping, and extra perks. 

Pro tip: Once you’ve set the rates, clearly display them on affiliate registration and landing pages.

Reason #3: Ineffective reporting and analysis

Top-notch affiliate marketing plugins, like Coupon Affiliates, track and share various metrics about your affiliate programs’ performance.

Affiliate reports

However, even with abundant analytics, many affiliate managers still make these common mistakes and that could be the reason why your affiliate program is not making money:

  1. They fail to review the data: It’s difficult to know how well your program performs if you don’t research the reports.
  2. Analyzing every data point: It’s great to have access to all the data about your affiliate program. However, constantly monitoring every metric can be overwhelming.

How to implement proper reporting and analysis

Here are the top key performing indicators (KPIs) that matter for most affiliate programs:

  1. Click traffic: The number of clicks each affiliate drives to your site.
  2. Conversions: The number of purchases from customers referred by each affiliate. 
  3. Conversion rate: The number of conversions divided by the number of page visits.
  4. Effective earning per click (EEPC): The percentage of revenue earned per click.
  5. Average order value: The average amount referred customers spend per transaction.

Once you’ve identified the most critical KPIs for your business, the next steps are to:

  1. Set the target measure of success for each KPI, aka success criteria: For instance, if your affiliates drive lots of traffic with a 1% conversion rate, you can target a 3% conversion rate by the end of the following year.
  2. Adjust your strategy to focus on activities that improve specific KPIs: Continuing with the above example, let’s say you dug into the reports and determined that a handful of affiliates drove 60% of conversions. You can then:
    • Identify the common traits those affiliates share and focus on recruiting more affiliates with similar characteristics.
    • Carefully study the buyer’s journey of shoppers who made purchases to identify significant trends.
    • Carefully study the buyer’s journey of shoppers who didn’t buy to identify and fix gaps.

Bottom line: Understanding the metrics that matter helps identify the actions to drive revenue to your affiliate program.

Reason #4: Inadequate training and resources

The next reason why your affiliate program is not making money is that your partners aren’t adequately supported.

No matter how experienced an affiliate is, they still need your input on how best to sell your products and services to their audience. 

How to better support affiliate partners

Put yourself in your affiliates’ shoes and ask: what resources would someone new to my affiliate program need to succeed? 

Create an affiliate portal on your site and add the following information. There is no need to get fancy here; this can be a simple page with links to these details:

  1. The top-selling products or services and their benefits: Let’s say you sell online courses; you can share the highlights of each course. If you sell physical products, like furniture, you can create a video tutorial showing how to assemble them.
  2. What sets your company apart from the competition: There’s no need to name specific competitors. Add a few highlights on what makes your business unique and why people should consider buying from your company. 
  3. Key traits of your ideal customer: Include critical details to help affiliates create content that better aligns with your target customers.
  4. Vital information about your affiliate program, such as:
    • How to create and share custom affiliate links and coupons.
    • How to navigate their affiliate dashboard.
    • How to use marketing creatives and banners.
    • Essential guidelines and terms and conditions of your affiliate program.

A bonus tip: Build strong affiliate relationships by creating a dedicated email address to promptly address their inquiries and feedback.

Reason #5: Poor promotion of your affiliate program

You must constantly market your products and services to reach customers. The same goes for your affiliate program.

Without frequent promotion, you’ll struggle to find enough affiliate partners to reach new audiences and expand your customer base.

How to effectively market your affiliate program

  1. On your owned channels, you can:
    • Link the affiliate program page to the primary or footer menus.
    • Showcase your affiliate program throughout your content.
    • Mention and link the affiliate program page in customer emails.
    • Create a highlight on your social media profiles.
  2. On external channels, you can advertise your program in:
    • Facebook (and other social media) groups that cater to your ideal affiliates.
    • Industry-related publications.
    • Email newsletters your target affiliates subscribe to.

Those are the top reasons why your affiliate program is not making money

If you’ve been running an affiliate program for some time and are yet to see meaningful results, it pays to take a deeper look into why your affiliate program is not making money and take the steps to improve.

Here’s a recap of the top factors preventing most affiliate programs from achieving success we shared above:

  1. Recruiting the wrong affiliates.
  2. Unattractive incentives and rewards.
  3. Ineffective tracking and reporting.
  4. Inadequate training and resources.
  5. Poor promotion of your affiliate program.

Implement the above recommendations to build a thriving affiliate program for your business starting today!

PS: Used by more than 4,700 websites, including eCommerce stores, e-learning sites, membership sites, etc., Coupon Affiliates is the perfect plugin to create an affiliate program that actually makes money. Check out the free version or get the premium version (with a 7-day free trial).

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