The Power of Affiliate Marketing in Scaling Your Ecommerce Business with Lauren Lee

Andy Splichal 0:00

Welcome to the Make Each Click Count podcast. This is your host, Andy Splichal. We're happy to welcome this week's guest to discuss today's topic, which is the power of affiliate marketing in scaling your eCommerce business. Today's guest is Clickbank ecommerce expert who works with eCommerce brands to unlock new sales channels using affiliate. She believes there is always a solution to scale brands. And you can always find a way to exceed goals. A big welcome to Lauren Lee. Hi, Lauren.

Lauren Lee 0:31

Hi, Andy, how are you doing today?

Andy Splichal 0:33

I'm doing great. Thanks for coming on the show.

Lauren Lee 0:35

Absolutely. Thank you for having me.

Andy Splichal 0:38

So let's start by defining affiliate marketing, and some of the common misconceptions behind using affiliate marketing.

Lauren Lee 0:49

I think that's a really great place to start. So affiliate marketing and the word affiliate can mean a lot of things to a lot of different people. And affiliate marketing is in general a strategy, right. And in affiliate marketing, you have people like ambassadors, you have influencers, you have select publishers, you have maybe partnerships that you're working with, but essentially, you know, you are an ecommerce brand driving traffic to your store or specific funnel. And you're leveraging people that I just mentioned, like ambassadors, influencers and publishers. within that space, there are companies that sit within there that support that and facilitate those relationships that are companies like networks, or agencies. But really, that's the landscape of affiliate marketing. It's a very, very high overview. And I'm sure we're gonna dive in a little bit deeper. But that's a good way for people to understand what is affiliate marketing and how does it work.

Andy Splichal 1:47

So when I think of affiliate marketing, and I'm not very sophisticated on it, granted, but I always think of coupon sites like retail me not. And, you know, when I order a Papa John's pizza I code and I look for a coupon online before I place the order now, is that what we're talking about? Or is it other things?

Lauren Lee 2:10

So I think you're right, in the sense that that's the general understanding of affiliate marketing, which means that there is something you're leveraging something to drive traffic to your ecommerce store to your product, right. And so in that case, you gave me an example you're talking about, that's a coupon code. And coupon codes is absolutely part of the affiliate world and an affiliate strategy, but it's not the only one. And you can use affiliate marketing in a lot of different ways. So let me kind of break this down for you a little bit further. So there are companies like you mentioned, like retail me not right, and there are publisher, and they're posting content for their ecommerce partnerships. And they're posting codes for a discount that you can save when you're ready to shop. That's one method of affiliate marketing. Another method of affiliate marketing leverages a different type of affiliate. So remember what I said earlier, where we're talking about affiliates, who are ambassadors, influencers, or publishers, like retail me not. There are also affiliates that are performance affiliates. And this is probably a new term for you. A performance affiliate means I am a media buyer, and I'm buying media on behalf of a company and driving traffic to a specific landing page to be able to convert and for that company to acquire customers. There are also email lists managers, and those people are also affiliates. There are agencies and organizations that manage different types of email lists. And those people are sending again, promotions on behalf of the company. So hopefully that is clear to you in terms of how many different types of affiliates there are. So it's not just the one example you gave where I have a 25% off coupon code. Yes, that is affiliate marketing. But your affiliate strategies can be way bigger than that, and way more strategic.

Andy Splichal 3:59

So what about the coupon plugins like honey, I mean, every time I'm on an eCommerce website, and I have honey, on my computer, it always goes to add a coupon code. And it seems to me I mean, it's done nothing to help me really convert. But I believe honey is gonna get a commission on that if that coupon code is used. So it seems like it's like a double whammy for the retailer. It's not helping them. And they're paying a commission to honey and they're losing money using a coupon code.

Lauren Lee 4:40

Well, organizations like honey or any other publisher that might be out there or a browser extension, like you mentioned, really, they are absolutely serving their customer. Absolutely. They're helping those e commerce companies drive traffic and awareness to the product or to their service. So maybe your conversion rates are lower like On your personal level, but of course, there are high conversion rates for, you know, that type of affiliate strategy. And the retail partner is absolutely winning in that situation. So yes, you're paying out a percentage to your affiliate, or to your customer and to the platform that you're using to leverage that type of traffic and awareness. But you you have thought about that, right? You've thought about your strategies and what what it costs to acquire a customer. And so of the brands who are, you know, driving the coupon codes for that particular company that you might be working on? So absolutely, affiliate marketing definitely works for eCommerce companies, you're not losing money, and in a lot of senses, you're saving money, because you're not paying out for these affiliates, until there's actually a conversion. Whereas maybe paid media, you're spending money and you're not sure what's going to come back to you. Not sure if people are gonna be acquired into your funnels, or if you're going to actually see a conversion, or affiliate marketing a conversion has to happen for you to then pay out your partners.

Andy Splichal 6:04

Okay, so let's talk about the strategy. How does an ecommerce companies start? How do they decide where they want to appear? What affiliates they want to use? If they want to opt into a RetailMeNot or honey or I mean, where do you even begin?

Lauren Lee 6:20

Yeah, that's a that's a really good question. So again, to reiterate, affiliate marketing is a big channel, right? That's a big strategy would be like thinking, what do I want to do in my marketing department? What do I want to do in my advertising department? So there's a lot of different ways that you can begin and, of course, a lot of different strategies. But I think a really good place to begin is one to think about, what are your current acquisition strategies? What are you leveraging today, a lot of people are leveraging performance ads, right? You're buying ads on Facebook, or Instagram, or some sort of method to that capacity. And you're driving traffic to either an E commerce site or to a funnel, and you're hoping right that you acquire this customer. So if once looking at your acquisition strategies, you can also layer in affiliate marketing into that strategy. And you can leverage affiliates to drive traffic to your ecommerce store or to a specific funnel, so that you don't have to always pay out for your acquisition efforts. So it's a really good place to look. Okay, what am I currently doing for acquisition? And how can I leverage affiliates to help me scale this faster and more cost effective? Another place to look is what are my key products? What do I really want to drive attention and awareness to right now? So it might be like a hero product or the product you're using to acquire customers? And how can I leverage affiliates of all kinds, to be able to drive awareness and attention to those products? Then you also want to think about how do I connect the dots? Right? So I'm talking a lot about affiliates and who they are, but like, how do you meet them? Right? How do you meet an ambassador? Or how do you meet an influencer? And how do I connect with media buyers? Who are going to buy media on my behalf?

Andy Splichal 8:03

Yeah, how do you do that?

Lauren Lee 8:05

That's when you use a company, you know, a network, like Clickbank is a network. So we're going to connect you with those affiliates or a network like ShareASale, or link share. These are affiliate networks, and they are companies that sit within the middle, essentially. And they are facilitating that relationship between the brand and the affiliates.

Andy Splichal 8:28

What is the typical cost per acquisition of using affiliate marketing compared to some of those? I don't know a face I guess Facebook marketing is traditional now. But Google ads or Facebook, or how does the CPA compare?

Lauren Lee 8:50

Yeah, so it's, I think it's different for everybody in different companies, but I can give you like a general overview. So using affiliates for customer acquisition is really about thinking about what is my margin of product, right? And what can I pay out for an affiliate? Rather than just thinking about how much money can I spend towards this ad? You're thinking about? How much can I actually pay an affiliate? What percentage, right, so most people are thinking between 60 and 75% payout to your affiliates. And that might sound like a high number. But you're being really strategic about this, you're really backing into that number, so you're not losing any money. Maybe companies do break even or you can also make money on your affiliate partnerships. So hopefully, that helps.

Andy Splichal 9:34

Are you then is a company concerning 60 to 70%? Is seems like a lot. But are you really concerned with your lifetime customer value of getting that customer where you're using affiliate marketing, almost like a lost leader?

Lauren Lee 9:50

Some people do. Absolutely. And you want to think about that lifetime value of the customer. We're an acquisition channel, right? We're going to drive customers and traffic's to you. And of course you want to know What is the cost of that for your own company? Everybody has their own metrics. And then you want to determine how much can I pay out to these affiliates? And then of course, you know, retarget, and market those customers over time,

Andy Splichal: 10:12

What are some of the biggest mistakes that cause somebody to be unsuccessful using affiliate marketing?

Lauren Lee: 10:21

You know, I think one thing that most people don't think about is that they give up too fast, they give up too soon. Affiliate marketing is absolutely a strategy that you can leverage. But it does take commitment, you have to work at building this strategy, just like I referenced before, you're thinking about your advertising department, or your marketing department, it's the same, you really have to invest over time. And I think a mistake people make is that often, affiliate marketing might fall underneath a team member who is doing many different things within marketing. So it's not top of mind, it's not the first thing that they're thinking about. So not giving enough attention to your affiliate marketing program, I see a lot of companies fail in that way. Or at least if they're not failing, they're not scaling as quickly and as fast as they can. And then I see people give up, right, you give up of your affiliate marketing program and trying to figure out how it's going to work for you. They give up too soon.

Andy Splichal: 11:13

Are there some specific niches in eCommerce that will you've seen that have performed better than others?

Lauren Lee: 11:21

In affiliate marketing? You know, I think any category can be successful with affiliate marketing, there's always somebody who's going to want to promote your product or your service. I think it's a matter of finding the right ones and ensuring that what they're driving traffic to is really compelling and engaging for a customer and they can convert right. We do see, you know, specifically with ClickBank we see a lot of deals and offers coming through consumables, health supplements, beauty services and digital products like e-business courses and things like that. But that's not the limit. Right? Of course, you can have affiliate partnerships for any business and any product that you have.

Andy Splichal: 12:09

Now, how I mean, you hear a lot about influencer marketing or TikTok or but how does affiliate marketing and influencing influencer marketing differ from each other?

Lauren Lee: 12:21

So again, affiliate marketing is like the umbrella right it is the category of department where influencers fit in. An influencer is someone or a company that literally has influence over an audience and can encourage them to check out a product or service. They're generally driving traffic to a warm audience meaning, let's say I'm a cook influencer and I have a following of a million people and these are all people who are interested in cooking. So if I introduce a product to them that is in the cooking space, that is called a warm audience. So that is an influencer. And an influencer can leverage codes or links. And that just depends when you know the company is decided in terms of how they want to track that type of experience. But you can also an influencer, I want to compare an influencer to a media buyer affiliates, and explain to you like, what's the difference and how many different affiliates there are. And I know I keep saying that. But again, you have to be clear of the total what's underneath this umbrella. So that's an influencer. A media buyer or a performance affiliate is somebody who is or a business or an agency. And they are driving traffic to cold traffic to a specific landing page, right, not just an audience that's on social media, but a specific landing page with a specific funnel with a very high intention for that customer to convert there. What cold traffic means is that the traffic coming to that page or to the landing page by that media affiliate, then the performance media affiliate has no awareness of your brand was not even in the market for your product. But because where they're landing is so compelling. And we can talk about this a little bit. It's called direct response marketing. There, they are highly likely to stay and engage with the product and convert. So that's the difference between an influencer and a performance affiliate underneath the whole umbrella of affiliate marketing.

Andy Splichal: 14:29

Can a business do this themselves? Do they need an agency? And if they can, where would they even start?

Lauren Lee

Can they do affiliate marketing by themselves or connect with certain affiliates and

Andy Splichal

Can they launch an affiliate marketing campaign? I run an e commerce Store and I'm going to say, hey, I want to do an affiliate marketing. But I don't want to do an agency. Is that Is that even possible?

Lauren Lee: 14:53

Absolutely. You don't necessarily need an agency to build an affiliate program right? You do need a network, you need a way to be able to track and manage and pay your affiliates. And that's where companies like Clickbank really are supporting both the seller and the affiliates to be able to facilitate that relationship. You don't necessarily need an agency, but you need to be able to have a way to track your affiliates and pay them.

Andy Splichal: 15:21

And so with ClickBank, it helps track and pay. And then it connects. I'm assuming it's connecting ecommerce businesses to affiliates.

Lauren Lee: 15:34

Yep, absolutely. And but it's in a very specific area, again, to get you know, a little bit more specific for you within affiliate marketing. Clickbank is going to facilitate a relationship for you to connect with affiliates, for your direct response marketing campaigns, and I don't think most ecommerce brands understand or leverage direct response marketing. Have you personally ever heard of the term direct response marketing, Andy?

Andy Splichal: 16:02

Yeah, of course.

Lauren Lee: 16:03

Okay. And do you leverage that in your businesses?

Andy Splichal: 16:07

Yes.

Lauren Lee: 16:09

And would you recommend that most ecommerce brands also leverage direct response marketing?

Andy Splichal: 16:18

Yeah, I mean, I think so mine's more of informational. So I do it through mailings, I mean, letters. So yeah, I mean, I think that direct response marketing isn't the shiniest object. But I think you've done right, it can be very successful.

Lauren Lee: 16:37

So I have a traditional e commerce background and also working, you know, as a publisher, for a publisher, not as the publisher, but for a publisher. And I did not see many ecommerce brands, leveraging the strategies and the growth opportunities behind direct response marketing. So if it's okay, I love to share with your audience what direct response marketing is, you know, and how to use it in your eCommerce. Okay.

Andy Splichal: 17:03

Let's do it.

Lauren Lee: 17:03

Let's do it. direct response marketing is a specific strategy within mark your marketing efforts. Direct response campaigns, are driving traffic to a specific landing page. So it's not driving traffic to your ecommerce store. So let's give you a real life example. So that this feels very real to you. We work with a brand called Organafi. They're like a green juice company. So of course, they have their e commerce site. And it's on Shopify, and it feels like any other e commerce platform, you know, shopping experience, I have many products I can choose from, I might have like a banner that's listening like a coupon code for me to use if I get to a certain price payout. And most of the people listening understand what I'm talking about. That's their ecommerce store, right. And they're driving traffic to that through methods, like you mentioned, like influencers and ambassadors, and maybe they are working with like publishers or partnerships. They build a direct response offer, which is essentially a landing page and a funnel, a direct response offer is designed to convert, whereas when I'm on your eCommerce store, it might have like brand ethos, and stories and a lot more about the brand. And you should have that you should be passionate about your brand. But a direct response offer the copy and the video content and everything that you are creating is built to convert for that customer to convert. So they're driving. Yeah,

Andy Splichal: 18:33

and it's really just selling one product.

Lauren Lee: 18:35

Most of the time, a direct response offer is selling one product, you can have

Andy Splichal: 18:40

Upsells at the end and all that stuff that goes with the typical funnel.

Lauren Lee: 18:44

Exactly. So we have upsells and down sells and order bumps and all that kind of fancy lingo around your funnel. And so where affiliates come into play, where I don't think a lot of ecommerce brands are really leveraging this today. And the ones that are doing really well with it is that you can leverage affiliates like performance affiliates, media buyers, email list managers to drive traffic to this direct response funnel and drive your acquisition efforts and of course give you more sales. And it's a it's a really effective strategy. And one of the best things about it is that there's really no risk you're not paying the affiliates and you're not paying the networks that are hosting you until you actually make a conversion until there's an order coming through to your your ecommerce site.

Andy Splichal: 19:33

Yeah no that's great. I mean that's that's way beyond what like oh honey or a retail me not there. Just add a coupon to a to an order come in and now tell me so if somebody comes in you recommend doing setting up a landing page in the direct response format? Do you help them do that? Or do you say go check out Russell Brunson and it's set up a funnel.

Lauren Lee: 19:57

So we do support you, we support you and consulting with you what is going to be the best offer? How are you going to put it together? We do have lots of resources in terms of helping you build the funnel. However, you're not going to build the funnel in Clickbank. Clickbank again is the network and we could talk about like how Clickbank works and if you want it but we don't build the funnel, but we absolutely help guide you in building it.

Andy Splichal: 20:24

Are there what resources do you send them to them?

Lauren Lee: 20:28

So we have an expert tools page, which I can share with you so that we have it in the in the show notes. And yeah, we're sending people to a variety of different resources, and it's to build the funnel, right. And it's also in terms of sales copy. We have some other ways for you to be for people who are listening to be able to connect.

Andy Splichal: 20:49

Yeah, no, that'd be great. Um, so click funnels Clickbank. I almost had to click funnels, but Clickbank. Yeah. What are some of the challenges that you struggle with in getting results for clients? I mean, you mentioned giving them too early, but But are there any other struggles?

Lauren Lee: 21:08

You know, I think one thing that is often overlooked is the testing phase. So again, like any other part of your business, you're wanting to get a feedback loop like, is this working? So if you build an advertising campaign, or if you built a product, right, and you want to know, when you put it in front of the customer, like what is the actual feedback, and you start to iterate and make different versions of that product? The same is true for affiliate marketing strategies. And the same is true for your direct response. So you want to test it, right? You want to drive your traffic or, you know, maybe you're buying some media and driving traffic to your direct response offer to really know, are people engaging with the whole thing? Is there an actual take rate to my upsells? Do people click on the Buy Now button? You want to know that feedback? So I think one of the challenges that brands face is allowing them to have that discovery time and even thinking through the testing phases, so that they're not just like off to the races and putting the product into the marketplace into our marketplace. And having affiliates drive traffic? Like they're really confident they feel really good about the product they're putting out there?

Andy Splichal: 22:17

How are you testing? Are you using like Google optimizer or using another third party tool? So A/B testing is a multivariant? I mean, how are you testing landing pages?

Lauren Lee: 22:27

Yeah, so I think, you know, it's particular for each company, but at a high level you're using if you have other affiliate relationships, of course, they can drive traffic to your landing page. Like I said, maybe you're buying some traffic to understand how it's working. And yes, absolutely, you're doing a B testing, you want to know, does the headline I created really grabbed people's attention, maybe you're trying video content, and then you're trying only sales content, or you put the testimonials at this part of the page, and you're want to see how people are engaging, you absolutely have to do a B testing. And I think, to put it in perspective, again, I think people lose some of the sense of how much information they need back in terms of any funnels that they build, you would do the same for the product you're putting out there, you would do A/B testing, you would do the same for any advertising, or even just things you post on social media, like you're gonna want to know. How does it resonate, and you want that feedback loop?

Andy Splichal: 23:25

So we've definitely gone over a ton of stuff and my head spinning.

Lauren Lee: 23:30

Oh, no, we want you to be clear, Andy.

Andy Splichal: 23:34

Well, we're going to clear it up right now. I hope. Okay, a potential client comes in and they say, I listen to your show, Lauren. I think I need a new marketing channel. I'm going to try some affiliate marketing, what's the boarding process? Like? Where do you start with them?

Lauren Lee: 23:50

Sure. So a really good place to start is a discovery call. Right? So let's sit down. Let's talk about what what is your business look like today? What are the hero products that you want to highlight? Do you have experience with direct response marketing, just kind of getting a lay of the land. From there, it's actually pretty easy to sign up and create a seller account on Clickbank and it's free. So you could do that at any time. But then there's a review process of your offer, we want to make sure you do feel confident with your offer. And when you put it into our marketplace, and our affiliates pick it up, it's converting

Andy Splichal: 24:26

Yeah, so you've put it in the marketplace. Can you cherry pick where it goes? Or? Like I don't want retail me not to have my coupon or I don't want honey to have my coupon. Can you do that? Or are they really like crawling? You know, you're you're paying commission and they're, you know, I view him is like kind of vultures in a way trying to find coupons to get paid. I mean, can you opt out of certain ones or how does that work?

Lauren Lee: 24:56

Yeah, and I think maybe to ensure that your audience has the right mindset. And I will absolutely answer your question. But the companies like honey or a publisher, or an ambassador or influencer, media buyer, you know, the affiliates we've been talking about. They're not like vultures, right? They're not trying to take anything from the brand. They're trying to drive traffic and awareness to the brand. So that customer wins. So the customer can engage with it, and the company can acquire them. And then of course, retarget them and surprise and delight them and win them over with their products and services. So want to make sure that your audience is really looking at it as a helpful industry tool.

Andy Splichal: 25:42

They don't listen to me anyway.

Lauren Lee: 25:45

What's that?

Andy Splichal: 25:46

Go ahead. Go ahead. Yeah, no, I mean, I, I mean, you can see my bias on it. I just, do they really help conversion?

Lauren Lee: 25:55

Absolutely. There. It's a billion dollar industry, multiple billion dollar industry, it is absolutely driving conversions. Affiliates is a very important strategy.

Andy Splichal: 26:08

I know, I know, the affiliate, I'm just, I'm thinking more of, you know, my experience when I'm already gonna buy something. And I just go around looking for a coupon code to see if I can save 10%. But I'm gonna buy it if I can't find it. I mean, how often does that happen? Versus they actually are responsible for the conversion, I guess, is what I have a hard time trying to calculate?

Lauren Lee: 26:34

Sure. So what you're talking about is one an attribution window, right? So as a company, you want to know, are my affiliate partnerships driving intent to buy?

Andy Splichal: 26:47

Are they driving the traffic to me? They've never heard of me? Or is somebody getting to my checkout page to my coupon field, they've already entered their credit card, and they said, Hey, let me see if I can find a coupon to plug in here. That's what I would want to know as a eCommerce owner.

Lauren Lee: 27:07

Yes. So as an eCommerce owner, you get to set your attribution window, most people have it, you know, in a very short window. So if you're wanting to know is this customer buying because of this affiliate relationship, you could tell that through tracking and performance and in data review, what you're also talking about is the customer's intent to purchase versus a customer who never knew about your brand and how they purchase. Yes. So there are two ways of looking at this. I think, one, there is also the companies that you're talking about, like giving you a coupon code like honey or any other one that is really essentially you're searching for the code when you're ready to check out the idea there is that those companies are helping those brands close that deal. You mentioned when you were talking about that and then there's definitely tons of data that prove that those companies do help that customer finish that transaction. You mentioned I was going to do it anyways. I was gonna buy it anyways and now I'm just going to look and see if there's an additional way for me to save that brand the eCommerce brand has not lost out whatsoever in that experience. Why because you are the customer who is going to buy it regardless or I am the customer who's looking for the coupon to help that brand close the deal and get the customer to make the purchase so it's definitely worth that ecommerce brands thinking through what are those codes in this particular situation 25% off or 5% free shipping or whatever it is that's going to close the deal for me get that customer to finish the sale

Andy Splichal: 28:58

So how I guess one I guess you would want to look at your conversion rate if it changes once you release something like that with...

Lauren Lee: 29:07

you want to look at conversion rate but you also are looking at your customer acquisition how many conversions are you driving through this coupon code and through this particular partnership? Um you'll see that very clearly it's a very clear number to be able to see

Andy Splichal: 29:19

I guess the answer always is test right that's what I always tell my private clients test it and see if it works now with ClickBank How does your guy's fee structure work? You're you're acting as the middleman setting up the ecommerce stores with the affiliates how do you guys get paid?

Lauren Lee: 29:39

Yeah, so we we are in the middle. So there's no upfront costs. In terms of joining Clickbank totally free our consultancy is totally free to integrate to our Shopify app is free a lot of free resources and opportunities for brands to come on. It's very low risk. And we take a percent of sale for every direct for every transaction so we take 7 and a half percent plus $1 At the point of every sale.

Andy Splichal

 And who is the perfect client for ClickBank?

Lauren Lee

Who is the perfect client for ClickBank? I would say if you're an e-commerce brand and you know, you have anywhere between 500,000 to, you know, 2 million, right? And, and of course higher, but, and you're looking for a way to be able to scale your acquisition efforts and also scale traffic and conversions to your brand and to your product. You are an ideal candidate to come and join ClickBank's Network and to be able to have your products in front of our affiliates, and we'd love to have you.

Andy Splichal

And lastly, how can an interested listener, perfect or not learn more about working with ClickBank?

So, LinkedIn is a really great place. You can find me on LinkedIn, Lauren Lee. You can connect with me there. I'll also include links for you to be able to have an e-commerce resource hub that is specifically for your audience, e-commerce brands who are wanting to get into the direct response space and to leverage this particular type of affiliates. So you'll have all those links and available in the show.

Andy Splichal

Well, this has been great and a lot of fun, and I hope I didn't give you too hard of a time. I'm really impressed by the direct response model. As you can tell, I'm still a bit on the fence with some of the coupon sites, but like I say to my private clients, I mean, test, test, test. Now, is there anything else you would like to add before we wrap it up today?

Lauren Lee

Yeah, I think, Andy, we need to, maybe have another conversation where I can help you understand how you can leverage this too. I don't want you to feel like, you know, The affiliate space is taking advantage of e-commerce brands and yes, you're right. Test, test, test, but also keep a fresh perspective. Affiliate isn't necessarily what it was like 25 years ago. Right. Like it is an ever-changing industry and absolutely something you should explore and like you personally, but of course your listeners too.

Andy Splichal

Perfect. All right, well, thank you again for joining us today.

Lauren Lee

Thank you for having me.

Andy Splichal

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