As a SaaS startup founder, you’re always on the lookout for cost-effective ways to acquire new customers and drive revenue growth. While paid advertising, content marketing, and SEO are common go-to strategies, there’s one powerful channel that is often overlooked – affiliate marketing.
Affiliate marketing allows you to tap into other people’s audiences and only pay when you get results. By recruiting affiliates to promote your SaaS product, you can expand your reach, generate qualified leads, and acquire new users, all with minimal upfront investment.
In this post, we’ll dive into why affiliate marketing is such a good fit for SaaS, how to find the right affiliate partners, and the key steps to launching your own successful SaaS affiliate program. Let’s get started!
What is Affiliate Marketing?
Affiliate marketing is a type of performance-based marketing where a business rewards affiliates for each customer brought to the company through the affiliate’s own marketing efforts.
Here’s how it typically works:
- The affiliate finds a product they want to promote and signs up for that company’s affiliate program.
- The company gives the affiliate a unique link that tracks the affiliate’s referrals.
- The affiliate includes their affiliate link in their content, which could be blog posts, social media, videos, podcasts, or websites.
- When someone clicks the affiliate’s link and makes a purchase from the company’s site, that purchase is tracked and attributed to the affiliate.
- The company then pays the affiliate a commission, which is a percentage of the sale price.
Why Affiliate Marketing important for SaaS?
There are several reasons why affiliate marketing tends to be a highly effective customer acquisition channel for SaaS companies:
- Cost-effective – With affiliate marketing, you only pay commissions on actual conversions. Unlike paid ads where you pay for clicks or impressions, with affiliates you know that you’re generating real results for your spend.
- High ROI – SaaS companies can offer very attractive recurring commissions to affiliates, sometimes up to 30% or more, because of the high customer lifetime value. These generous commissions incentivize affiliates to put significant effort into promoting SaaS offers.
- Relevant audiences – By partnering with affiliates in your specific niche, you can get your product in front of highly relevant audiences who are more likely to convert. The key is finding affiliates whose audience closely matches your target customer profile.
- Built-in trust – Recommendations from trusted influencers, bloggers, and publications carry a lot of weight. By having your product promoted by affiliates that have already built relationships with their audience, you can “borrow” that trust and credibility to drive conversions.
- Performance-based – Affiliates are incentivized to send you high-quality leads and customers, since they only earn commissions on successful sales. This performance-based model ensures that your partners are aligned with your goals.
- Evergreen – While ads stop delivering results the moment you pause your campaigns, high-quality affiliate content can continue generating leads and customers for you long after the initial promotion.
Finding the Right Affiliate Partners
Now that we’ve established why SaaS and affiliate marketing are such a good match, let’s talk about how to actually find affiliates to promote your product.
One option is to join existing affiliate networks that have a SaaS vertical. Some of the top choices include:
- ShareASale – Offers over 3,500 merchant programs, including hundreds of SaaS and software offers. Commissions range from 20-40% and they have a low $50 minimum payout threshold.
- Impact – A leading affiliate platform that is home to many top SaaS companies like Shopify and HubSpot. Provides flexible commissioning, advanced tracking, and robust partner management features.
- PartnerStack – Focuses exclusively on B2B SaaS and software affiliate programs. Offers customizable payouts, automated partner onboarding, and integrations with popular SaaS tools like StoryChief.
- Awin – A global affiliate network with over 15,000 advertisers, including a growing SaaS category. Provides cross-device tracking, flexible commissioning options, and a variety of publisher models.
In addition to affiliate networks, you can also proactively reach out to potential affiliate partners directly. Here are some ways to find relevant affiliates:
- Search for bloggers, influencers, and publications in your niche
- Look at who is already writing about or reviewing products similar to yours
- See who your competitors are partnering with for affiliate promotions
- Ask your existing customers if they have blogs or audiences that would be a good fit
- Leverage your connections and network for introductions to potential partners
According to MagicSpace SEO, the key is to find affiliates who have an engaged, relevant audience that aligns well with your target customer profile. Prioritize quality over quantity when it comes to affiliate partnerships.
Launching Your SaaS Affiliate Program
Once you’ve identified some potential affiliate partners, it’s time to launch your program. Here are the key steps to getting your SaaS affiliate program off the ground:
- Define your commission structure – Decide what percentage of each sale you will pay out to affiliates. A common range for SaaS is 20-40% recurring commission. You can also offer bonuses for hitting certain milestones.
- Set your cookie window – Determine how long you will attribute sales to an affiliate after the initial click. 30-90 days is typical for SaaS. You want to give enough time for leads to convert while still incentivizing affiliates to drive new traffic.
- Create your affiliate agreement – Cover the legal terms of your affiliate relationship, including commission rates, payment schedule, promotional guidelines, and program policies. Have a lawyer review this document.
- Provide creative assets – Equip your affiliates with the links, banners, logos, and other creative assets they need to effectively promote your product. Consider creating custom landing pages for top affiliates.
- Establish a communication plan – Decide how you will keep affiliates informed about product updates, new promotions, commission bonuses, and other important information. An affiliate newsletter can be an effective communication tool.
- Track and pay commissions – Use affiliate tracking software to attribute sales and leads to the correct affiliate partners. Set a schedule for calculating and paying out earned commissions, typically on a monthly basis.
- Optimize and scale – As you start seeing results from your affiliate program, look for opportunities to optimize your commission structure, creative assets, and communication strategy. Over time, aim to recruit more high-quality affiliate partners and scale your program.
By following these steps, you can build an affiliate program that becomes a reliable, cost-effective source of new customers for your SaaS business.
Measuring Affiliate Program Success
To ensure that your affiliate program is delivering positive ROI for your business, it’s important to track the right metrics. Here are a few of the most important affiliate marketing metrics for SaaS:
- Gross revenue – The total sales generated by your affiliate program
- Number of conversions – The total number of affiliate-referred sales and leads
- Traffic and clicks – The volume of visitors and clicks delivered by affiliates
- Conversion rate – The percentage of affiliate clicks that result in a sale or conversion
- EPC (earnings per click) – The average affiliate commission earned per 100 clicks
- AOV (average order value) – The average revenue generated per affiliate sale
- Customer retention rate – The percentage of affiliate-referred customers who remain active subscribers over time
By tracking these metrics, you can identify your top-performing affiliates, pinpoint which types of affiliate content are most effective, and calculate the overall ROI of your program. Use this data to continually optimize your partnerships and promotional strategies.
Affiliate Marketing Best Practices
To get the most out of your SaaS affiliate program, follow these best practices:
- Focus on quality over quantity when it comes to affiliate partnerships
- Provide your affiliates with detailed product information and helpful resources
- Offer generous commissions, especially for your top-performing partners
- Use affiliate-specific landing pages to maximize conversions
- Leverage affiliate-exclusive discounts and promotions to drive sales
- Communicate regularly with your affiliates to keep them engaged and informed
- Publicly recognize and reward your top affiliates to incentivize performance
- Test different commission structures, creative assets, and promotional strategies to optimize your program over time
By implementing these affiliate marketing best practices, you can maximize the impact of your program and drive sustainable growth for your SaaS business.
Conclusion
Affiliate marketing can be an incredibly powerful customer acquisition channel for SaaS startups. By leveraging the reach and influence of affiliates in your niche, you can tap into new audiences, drive high-quality leads, and generate a steady stream of recurring revenue.
To launch a successful SaaS affiliate program, focus on recruiting relevant, high-quality affiliate partners, equip them with the resources they need to succeed, and continually optimize your program based on data and results.
By following the strategies and best practices outlined in this post, you can harness the power of affiliate marketing to take your SaaS growth to the next level.