Building an Affiliate Flywheel: Diversification #20

RBL Flywheel Newsletter #20 💥

This week we're diving into Diversification for Affiliate Partners! This is Part 4 in the 6-part series: Building an Affiliate Flywheel 💥

Been training all week for Part IV!

Let's go deep on the what diversification means and how to structure programs to protect your brand while scaling and rewarding top partners.

We are 66% completed with how you build and affiliate flywheel for your brand. Don't be shy to send me questions if they come up.

Best,

Tye 🤠

Diversification

Partner Diversification 

Concentration risks can hurt. ❌

We have seen hundreds of affiliate programs of all shapes and sizes spanning industry.About 45% of them have one partner generating more than 50% of program revenue.

That is NOT GOOD.It's what we call a concentration risk.

While the arrangement can be mutually beneficial (they rely on you, you rely on them), if you are not careful, the tail can wag the dog. For those long-time RBL readers, yes that is #2 on Ronny's Code of the West.

Affiliates and brands can part ways when they need to. While we build and aim for these partnerships to be healthy and long term, sometimes they end.

Partner promotional methods can be altered quickly.

Channels and tactics rise and fall all the time in marketing. Meta (Facebook) has had a long history of shutting down API access for emerging businesses.

Google can roll out an update that negatively impacts a partner's organic search traffic, and a new review site can enter the market rendering a partner obsolete.

While not common, you can see the importance of affiliate partner diversification.

You will need to eliminate concentration risk and have affiliate partner representation in each business model:

• Content Portfolio: Conde Nast, Dotdash Meredith, Internet Brands, Outside

• Content: Wirecutter, Forbes, Popular Mechanics, InsideHook, Wired, Buzzfeed, SheFinds, Ars Technica, Tom's Guide

• Influencer: LTK, Mavely, MagicLinks

• Coupon: Groupon, RetailMeNot, Savings.com

• Deal: SlickDeals, techbargains, Brad's Deals

• Loyalty: Rakuten Rewards,

• Subnetworks: Skimlinks, ShopHer

• Technology: Revlifter, UpSellIt

• Financial Services: CreditKarma, NerdWallet, CreditSesame, Credit.com (can include Card Linked Offers)

• White Label Solutions: Wildfire, Cartera, Global Savings Group

• Email: Madrivo, Atwave

• BNPL: Affirm, Klarna, Afterpay

Shout out to Adam Weiss, who has given the partner ecosystem a lot of thought as well!

Some areas you might be overlooking 🕵️:

• Media Buyer: Bonus: This is one of most underutilized opportunities to diversify. Of the hundreds of programs we review, about 5% tap into Media Buyers on a performance basis. DM me for more info! Leverage Google, Meta, and TikTok with the right offer, landing page, and payout. If you have PMF you can scale this lever and accelerate an efficient channel while adding even more diversity of traffic sources for your brand.

• Brand to Brand partnerships: advertiser brands can team up to make magic happen from within native apps, unboxing experiences, at checkout via referrals, or in full on design collaborations.

• Audio/Podcast: If you tap the right size follower count and audience utilizing trackable attributable vanity promo codes. Let's pretend Coursera is doing a collaboration with the Lex Friedman podcast. "LEX" or vanity URLs Coursera.org/lex.

Selecting the right partner is of course dependent on the type of brand, Ideal Customer Persona (ICP), and goals.

Far too many affiliate programs neglect one or many business models or over-index on one partner type (often coupon and loyalty), leaving a gap in the marketing funnel (awareness, consideration, conversion).

Why does this matter / What do I do?

1. Prepare: Even great partners can stop promoting your brand for a number of reasons. Declines can happen for things out of their control.

2. Identify it: If you have one partner generating more than 50% of your revenue you need to take action now. We recommend no more than 30%.

3. Protect: Diversity of traffic sources and partner types not long mitigates big losses in your program if someone declines/leaves/promotes a competitor.

4. Aids in conversion across multiple touch points. It allows you to meet your target customer across a number of stages of the funnel, channel, device, and type of content. This makes your brand a more ubiquitous, multi-faceted full-funnel voice for the customer to consider amidst their myriad of options in today's competitive market.

Diversify or perish.