How to Create and Grow an Affiliate Program (the AppSumo Way)

Hello, world! I’m Erika. I joined AppSumo in 2019 and serve as the Senior Marketing Partnerships Manager.

I oversee our two performance-based marketing channels: the affiliate and referral programs, along with our newly minted influencer program. Our performance-based marketing partnerships are all about giving our customers the power to be our biggest advocates—and rewarding them for doing so!

Last year, we grew the revenue from our affiliate program 278%. Not a typo—and yes, it’s still hard to believe. Thankfully, we took some notes along the way!

Flywheel marketing: Turning customers into advocates

We all know that recommendations from friends, trusted sources, and thought leaders within a particular niche are like gold.

In a sea of algorithmic, targeted ads constantly being thrown at us on whichever screen we happen to be using, we need the oasis of human experience. That’s why organic, customer-driven promotion is so important, why our affiliates are our most valuable partners, and why I’ve spent the better part of the past year and a half figuring out how to grow our affiliate program as quickly and as sustainably as possible.

Flywheel marketing uses the momentum of satisfied customers to drive additional sales from the customer’s own audience. Companies that adopt this model have a huge advantage because they aren’t the only ones fueling the growth of the business—their customers are helping them grow as well.

How to create an affiliate program

Our affiliate program gives our customers a seamless and incentivized path to becoming our biggest champions.

By sharing tools they genuinely love via a custom tracking link, affiliates earn a kickback on every sale they drive that results from their own marketing efforts. In doing so, they’re not only creating a new income stream for themselves but also providing valuable resources for their audience.

‍AppSumo launched its affiliate program back in 2017 with one team member spending about 10% of their time on it. Since then, we’ve grown to be a team of three full-time members, plus a support agency all focused on the program’s growth—and we’ve learned a ton along the way.

Here are some of our tips:

Tip 1: Incentivize what matters

AppSumo’s affiliate program started out with a tiered commission structure that reset monthly.

For example, affiliates would earn X% on sales up to $Y dollars per month, and a slightly higher commission on anything beyond that threshold. This setup wasn’t ideal for two reasons:

1. The average affiliate didn’t have an audience size that would allow them to break through to the upgraded commission tier. We were continually rewarding the same small group of affiliates with higher payouts, while they were essentially promoting to the same group of people.
2. We couldn’t find an affiliate platform that did a good job of helping affiliates track their progress when goals were reset monthly. Earnings were always a black box and relied heavily on our team manually processing anything above the base tier.

We eventually shifted the program’s focus to what is most important for the company’s growth: getting in front of new customers. Under the new commission structure, we reward affiliates heavily for bringing new customers into the AppSumo ecosystem. Bring in a new customer, and you’ll earn 100% of their first purchase up to $50. Repeat customers are still essential to our business, so we pay out up to 5% of sales on those transactions.

In addition, we run new buyer bonus contests where affiliates can earn up to 50% more on new buyer commissions for certain tools each month.

Tip 2: Set a gold standard for recruitment

Every day, we sift through YouTube channels, Twitter mentions, and blogs of all kinds in search of potentially valuable affiliate prospects. Instead of just focusing on software reviewers, we try to tap into niches that are less likely to already be familiar with AppSumo.

‍One of our most successful focus areas over the last year has, quite unexpectedly, been mommy bloggers (we prefer ‘mompreneurs’). Doubling down on areas where we see initial traction opens up opportunities that would otherwise go unnoticed.

In terms of process, we manage our outreach pretty similarly to a traditional sales funnel:

• Our support agency builds a list of prospects based on criteria we set, tending to favor good quality content over a strict audience size or reach requirements
• Crystal, our Affiliate Manager, sweeps the list to make sure all prospects are a good fit before contacting and adds in notes on where we see value in the partnership
• Make an impression! We customize outreach as much as we can to make sure the affiliate prospect knows they’re not just on some list, but that we’ve actually hand-picked them. If they’ve never heard of you—let them take the product for a spin! Give them the resources they need to decide whether the partnership makes sense or not.
• Make onboarding smooth sailing. They’ve signed up—now what? Quick start guides with a customized list of suggested tools to start with, how to create affiliate links, and where to find ad creative are all essential.

We also get anywhere from 200 to 500 inbound applications per month, which we vet on a daily basis. Use the same standards for vetting this pool as you do with your outreach. Letting in lower-quality affiliates just to boost your network size often leads to problems down the road. Make sure all partners are going to be brand advocates that represent your business well 🤝

Tip 3: Keep the engine running

Without pestering them, don’t let your most valuable partners or your hard-earned affiliates, forget about you! If you notice a dip in engagement, take action to find out why.

• Send out quarterly surveys inviting feedback on what could improve your affiliate relationships
• Front-load support. Right after joining, make sure your new affiliate has everything they need to get started. If they haven’t logged in or started promoting within the first couple of weeks, follow up and check in to see if there’s anything you can do to help.
• Track trends. We tend to notice a huge spike in affiliate engagement seasonally, around the time of our biggest sale of the year—Black Friday. Reach out to the affiliates who drop off the following month and get them excited about continuing to promote.
• Leaderboards don’t lie. Every month, we look at which new affiliates are making a big splash, which are driving the most new customers, and who’s dominating which channel. We have ongoing conversations with all of them.

Tip 4: Nurture that network

We all know nurturing our network is an important part of maintaining and growing an affiliate program. Here’s what we’ve learned from growing our own:

‍Pick up the phone. Open the line of communication so that you can help your affiliates help you. Affiliates are your superfans—they want to speak with you and you should want to speak with them, too!

Reach out to your top performers, your OG superstars who’ve been there from the start, and even ones that just joined. Rather than guess and check, let them tell you what’s working within the program and what could use improvement.

‍Invest in their success. Affiliate partnerships should be mutually beneficial. If you can help them grow their audience, they’ll promote your product to more and more people.

Find out how you can help—whether it’s talking through strategy together, encouraging them to try out new channels, or providing additional resources for them to use in promotions. Here are some things we’ve done in the past:

1. Run co-branded giveaways with our top affiliates where we raffled-off tools most relevant to their audience during their regularly scheduled webinars
2. Set up co-branded AppSumo tool collection pages
3. Created custom “Affiliate Name + AppSumo” ad creatives during special promotion events

Honesty is the best look. Encourage genuine promotion! Our top affiliates actually use all of the tools that they’re sharing with their audience and find measurable value in them. Minimizing spam and rewarding original content creation that includes personal experience, use cases, and tutorials will attract higher-quality customers.

Tip 5: Let the data drive

Tracking, analyzing, and adjusting your program based on the numbers is key—your business and program won’t behave exactly like ours or anyone else’s.

We track the following metrics on a weekly basis:

• Outreach and number of new sign-ups that resulted
• Payouts: How are they being allocated? Our goal for the program is focused on new buyers and new revenue, so the goal is for the majority of our affiliate commissions to go toward bringing in new buyers vs return customers. Take a look at your top priority with regard to affiliate partnerships. Does the spend align with that?
• Net revenue and new buyer revenue
• Number of new buyers brought in from affiliates
• Refund rate of affiliate-driven transactions
• ROAS
• Retention: total number of active affiliates (and the % of total network) on a rolling 30-, 60-, and 90-day basis

Here’s a look into our control room 🤓

On to the Next ⏭️

I could discuss all the new levers our team would like to pull for hours, but here’s what’s next in the AppSumo Affiliate playbook: segmentation.‍

Right now, all of our affiliates are getting the same master list of new deal notifications. Soon, we hope to be able to send out completely customized weekly prospectus emails. These emails will only highlight tools that are a match for the affiliate’s self-selected criteria so that they are presented with the best tools for their audience.

FAQs on getting started

How do I choose an affiliate platform?!

We use Impact at AppSumo, but recommend that you check out a variety of options before diving headfirst into one platform.

There are a ton of platforms to choose from, and the costs and features are often optimized for different types of businesses and programs. Once your affiliate network is sizable, it can be a huge pain to switch over to another platform. (We speak from experience 💀)

How do I find my first affiliate?

Start with your most loyal customers. It’s likely that some of them have channels through which they could (and would like to) promote.

How should I set my program’s commission structure?

You can pay out based on traffic, sales (fixed amount or percentage of sale), and more. We optimized the incentive for sales toward bringing in new buyers because we felt it was the most sustainable way to grow the program as quickly as possible.

It’s hard to argue with large monthly payout amounts if that money is going toward bringing in brand new customers. It’s really up to you and where you see your advocates providing the most value.

Let the people promote!

Offering a way for your most loyal customers to become brand advocates is one of the most sustainable, turnkey solutions you can implement for growth.To summarize:

• Be transparent about what you’re looking for from your affiliates—is it new customers? Original content that you can cross-promote? Pure revenue? Help them help you by providing clear goals and incentives that align!
• Find people you can trust. As you grow your program, make sure the affiliates you’re recruiting and admitting to the program will be a good representative of your brand.
• Maintain open lines of communication between your brand and your affiliates—they’re your boots on the ground.
• Keep it fresh. Run contests, offer opportunities for bonuses, and continue to find new ways to engage with your affiliates.
• Optimize your structure. Data doesn’t lie, so think about how you can continually improve your program structure to meet your goals.

Other Resources:

• 3 AppSumo Affiliate Marketers Share Their Secrets for High-Paying Success
• AppSumo Affiliate Program: Everything you need to know

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