Prioritizing marketing initiatives can be tricky. It’s particularly challenging if you, like many other B2B business owners, drive sales through both inbound and outbound tactics. Should you prioritize high-cost, big-reach outbound techniques like TV commercials and billboards? Or devote the majority of your marketing budget to targeted inbound tactics like social media and content marketing?
Ideally, you take an approach that combines the benefits of both—a low-cost marketing program that offers personalized, targeted, and scalable outreach. B2B affiliate marketing can help. Here’s what it is, how it works, and how to build a successful B2B affiliate marketing program for your business.
What is B2B affiliate marketing?
Business-to-business (B2B) affiliate marketing is a performance-based marketing strategy in which a company or influencer (the affiliate) promotes a brand’s products to other companies in exchange for a commission. Often, the affiliate is a client of the brand, but they may be an individual who’s an expert in the given industry or has some other significant influence.
Under this structure, each company compensates its B2B affiliate marketing partner for specific customer behaviors that are attributable to the affiliate’s activities, such as making site visits, making purchases, or entering service contracts.
Here’s how B2B affiliate marketing works:
1. A company specifies the behaviors for which it will compensate its affiliates, which could be businesses that are already existing customers or individual content creators with influence in the industry.
2. Approved affiliates promote the company using their unique affiliate links or other affiliate resources like branded images or product photos.
3. The company monitors customer behaviors and pays its affiliates for attributable activities (such as newsletter sign-ups) as outlined in the program terms.
B2B vs. B2C affiliate marketing: What’s the difference?
Affiliate marketing strategies are popular with B2B and business-to-consumer (B2C) businesses, and they work similarly in both cases. The main difference between the two is that B2B marketers tailor their affiliate marketing campaigns to reach other businesses, who may use different channels, respond to different types of content, and follow different buying cycles than individual consumers.
“B2B transactions happen because the customer needs a product—not because they’re emotionally connected to it and really want to make a purchase,” says John Murphy, an affiliate marketing expert and the owner of The Cold Plunge Store. “The content tends to be more direct and clinical.”
Benefits of B2B affiliate marketing
Affiliate marketing is a cost-effective, low-risk strategy that can help boost site traffic, increase conversions, and reduce customer acquisition costs. It can be particularly valuable for businesses operating in the competitive B2B space. Three unique affiliate marketing benefits for B2B companies are:
Access to niche customer groups
B2B businesses often target smaller customer groups than B2C companies, and many struggle to reach these niche consumer segments effectively.
With affiliate marketing, you partner with affiliate marketers who have access to your ideal customer base, and because you only pay when conversions happen, there’s no danger of wasting marketing spend on customers who aren’t interested in what you sell.
Increased leads
Lead generation is the process of identifying new prospective customers and collecting information (like an email address and a job title) that will help you target them with sales and marketing materials. Many companies use expensive outbound tactics to contact prospective customers, then they hand qualified leads over to a sales team.
You can set up your B2B affiliate marketing program to integrate leads into your existing sales and marketing funnel. In comparison to using expensive outbound tactics, the leads your B2B affiliate marketing program generates are likely to be higher quality because the businesses that follow your affiliates are already curious about the promoted products or services.
Also, the total marketing cost to you will likely be lower since you will pay only for desired behaviors versus an upfront marketing spend.
Improved brand reputation
Business communities are small, so a company’s reputation is critical. Affiliate marketing can boost yours by encouraging people in your industry to vouch for you. If you want to improve your brand image, you might design an affiliate marketing initiative that rewards current or former customers for referrals, or you could focus your recruiting efforts on high-value affiliates with particular influence over your customer base.
How to build a B2B affiliate marketing program
- Understand your buyer journey
- Set goals
- Identify key behaviors
- Develop your compensation plan
- Decide whether to join an affiliate network
- Draft an affiliate agreement
- Select affiliate management software
- Develop your program application
- Recruit and screen applicants
- Onboard affiliates
- Monitor performance
Starting a new affiliate program is relatively affordable. You won’t have to make upfront payments to influencers or ad networks, and you won’t need to invest in extensive campaign collateral to begin marketing your product.
Instead, you’ll focus on designing a program that meets your needs and choosing the right tools, service providers, and affiliate partners for your business. Here’s how to get started:
1. Understand your buyer journey
A successful affiliate program responds to your customers’ unique needs, so start by researching your target audience. “You want to know who you are speaking to and why they are looking for information. And if your customers are businesses, they have different reasons for that,” John says. Pay special attention to insights into the B2B buyer journey, such as how your customers make buying decisions, what types of information they need to convert, and how and where they research products.
You’ll use this information to design your program later on. For example, many B2B customers expect personalized attention from sales representatives who form relationships with them and can assemble customized product or service packages. If this is the case, you might focus your affiliate marketing efforts on getting more customers into yoursales funnel, not on generating direct conversions.
2. Set goals
Next, set goals for your affiliate campaigns and identify key performance indicators (KPIs) that correspond with each. You might aim to generate 50 new leads from your affiliate program in Q3, for example, or to boost site traffic by 20% by the end of the year, with affiliate traffic representing at least 30% of total traffic by that date.
By using these affiliate-specific KPIs and your findings about your buyer journey, you can identify the goals most likely to ladder up to your larger business objectives. If your customers need access to educational materials to convert, for example, you might target 20 new sign-ups per month to your email marketing campaign that are attributable to affiliate sources.
3. Identify key behaviors
Not all affiliate programs reward the same behaviors, so determine the customer behaviors for which you’ll compensate affiliates. Here are some common examples:
- Clicks through to your site or your landing pages
- Conversions
- Newsletter sign-ups
- Contact form submissions
- Software installs
- Resource downloads
- Sales call requests
- Calls or emails to your company
- Lead qualification
Choose behaviors that align with your goals and KPIs, but remember that you don’t necessarily need to pay for every metric you’ll track. Your decision will depend on the size of your affiliate marketing budget and how much value each behavior brings to your business.
If you’re tracking site visits, for example, you could pay for clicks through to your website, or you could pay for higher-value activities, such as filling out a contact form or making a purchase. If you have a limited budget or aren’t confident in your ability to nurture site visitors through your marketing funnel, you might start out by only paying for sales conversions. You can always adjust your compensation model later as you learn more about how referred customers interact with your company.
4. Develop your compensation plan
Rates vary widely by industry, so consider conducting a competitive analysis to determine how other businesses in your market compensate affiliate partners. In general, affiliates earn between 10¢ and $1 for clicks through to a site, between $5 and $100 for leads, and between 5% and 25% of the total sales value on sales commissions.
B2B businesses can also reduce the risk associated with paying affiliates for actions that don’t directly generate revenue by using a hybrid model. You might pay a low flat-rate fee for new leads and offer a more substantial sales commission should the lead eventually convert.
5. Decide whether to join an affiliate network
Next, decide whether you’ll join an affiliate marketing network, which is a service that helps businesses recruit and manage affiliate marketers. Affiliate networks typically charge businesses a joining fee and apply monthly minimums or per-transaction commissions. Whether or not an affiliate marketing program is right for your business depends on your budget, how many affiliate partners you’ll pursue, and the types of affiliates you want to recruit.
If you operate in a niche industry without many active affiliates, an affiliate marketing network might not provide access to the best affiliates for your business. Instead, you might decide to recruit and manage a relatively small number of affiliates on your own. If you operate in a more popular niche, like financial services, you might leverage affiliate networks to get quick access to a vetted group of participants and reduce the cost of managing a large affiliate cohort.
Research the best affiliate networks for your budget, industry, and goals. Look for one that provides all the tools you need to manage your program, such as recruiting automations, performance monitoring software, in-platform payment options, and legal support.
6. Draft an affiliate agreement
An affiliate agreement is a legal document that initiates the relationship between an affiliate and a business. It clarifies the terms of your engagement and can help protect your business from affiliate fraud.
Many affiliate networks offer standard agreements, so if you’ve joined one, try modifying its template to your needs. Alternatively, consult legal resources (or hire a lawyer) to draft your own. Here are a few things to have, including:
- Compensation structure and rates. Specify the customer behaviors for which you’ll compensate affiliates and how much you’ll pay for each action.
- Payment schedules. Note how often you’ll pay affiliates.
- Trademark regulations. Specify when and how affiliates can use trademarks or other advertising materials associated with your brand.
- Prohibited tactics or marketing channels. Include a list of prohibited activities, such as posting discount codes to coupon aggregators, sending unsolicited emails, or running paid ads, and where they shouldn’t post content.
- Federal Trade Commission disclosure requirements. The FTC requires affiliates to disclose their relationship with a company in any content that endorses or reviews the company’s products, unless that content is clearly a paid advertisement.
- Grounds for termination. Many agreements state that a company can terminate an affiliate relationship at its discretion; you may also list specific actions that constitute grounds for termination.
7. Select affiliate management software
If you’ve decided to join an affiliate marketing network, you can skip this step—most affiliate networks provide built-in performance monitoring tools. If you’re not joining a network or your network doesn’t provide affiliate management software, select an affiliate management tool.
Look for a tool that integrates with your online store, supports your planned commission structure, offers robust reporting options, and makes it easy to pay affiliates. Some affiliate management software companies also include fraud detection features and automated recruiting and payment functions, which can be particularly valuable if you plan to enlist a large affiliate cohort.
If you plan to reward affiliates for conversions, pay special attention to cookie window options to make sure they align with your sales cycle. The cookie window determines how much time can pass between a customer’s first visit to your site and the customer’s conversion for the software to still attribute this behavior to the referring affiliate.
8. Develop your program application
If you’ve joined an affiliate marketing network, this step is optional. Most affiliate networks pre-screen affiliate members, and many allow you to configure your program to automatically sign up interested affiliates.
If you want more control over your affiliate cohort (or are running your own program), ensure your application asks affiliates to submit their company’s legal name, contact information, and social media handles. You can also ask affiliates to describe their brand, products, or affiliate marketing business philosophies to better gauge alignment with your brand.
9. Recruit and screen affiliates
Many affiliate marketing networks offer built-in recruiting tools, so if you’ve joined a network, publicize your program and recruit affiliates from your affiliate dashboard.
If you’re running your own program, share your application on your company website and social media feeds. You can use search engines or social media platforms to identify thought leaders in your industry and invite those individuals and their businesses to apply. Consider your current customer base, too. They’re already familiar with your products or services and are likely to have professional connections with other prospective affiliates.
Screen applications as they come in, prioritizing those who create high-quality content and have demonstrated authority with your target market—both signs of the affiliate’s ability to generate high-quality leads for your business. Keep an eye out for low-quality content or signs of a fraudulent application, such as a limited online presence or social media profiles they created only recently.
10. Onboard affiliates
Collect signed affiliate agreements and set up new affiliate partners in your affiliate management system. You’ll gather payment information, provide access to any marketing assets, and ensure affiliates know how to contact you (or your affiliate manager) with issues.
Many affiliate programs admit new applicants on a rolling basis, so consider automating your onboarding process to reduce your administrative labor. With an automated onboarding process, you design an affiliate onboarding nurturing cadence and use your affiliate management software or email service provider—such as Shopify Email—to send key onboarding messages at set intervals or in response to specific affiliate behaviors.
11. Monitor performance
Once your program is up and running, use your management software to evaluate your affiliate program’s success, measure your return on investment (ROI), and monitor for signs of fraud.
Affiliate performance data is a valuable source of customer intelligence. You can use it not only to optimize your affiliate campaigns but also to improve your other marketing initiatives. If your affiliate-generated sales qualified leads (SQLs) are converting at an abnormally low rate, for example, you might revise your lead qualification criteria to ensure you’re paying only for customers who are likely to convert.
You might also use information about which marketing channels bring in the best leadsso you can plan your brand’s next affiliate outreach campaign.
B2B affiliate marketing FAQ
What is B2C affiliate marketing?
Business-to-consumer (B2C) affiliate marketing is a performance-based marketing strategy in which a business partners with one or more affiliates, or with individual creators who promote the business and earn money for specific customer behaviors attributable to their activities. It differs from business-to-business (B2B) affiliate marketing in that B2B targets businesses, not individual consumers.
How do I find a B2B affiliate?
You can join an affiliate marketing network to find B2B affiliate marketers and B2B companies that offer affiliate programs. You can also check out this guide to the best affiliate programs across B2B and B2C spaces.
How do you make money with B2B marketing?
B2B affiliate marketers earn money by promoting products and services to an audience that values their recommendations. As an affiliate, you can boost your odds of success by building your authority in a lucrative niche and joining a top affiliate marketing program. Meanwhile, businesses increase their sales volume and total revenue by partnering with B2B affiliate marketers who promote their goods or services.
