There is an untapped army of sales people and marketers out there, waiting to help you acquire new customers for your hosting business. All it takes is the right incentives, and the right program, and you could be generating a big part of your new clients and revenue through affiliate marketers.
Affiliate marketing – a staple of web hosting customer acquisition tactics – is based on the simple idea is that the best kind of sales pitch is very often the endorsement of an existing customer. The evolution of that idea is simply that a business (the hosting provider in this case) rewards those customers (and other partners) for referring that new business, usually via affiliate links or coupon codes.
Many hosting providers already offer affiliate programs, some more successfully than others, but there is no shortage of hosting providers, and new companies are launching or augmenting their programs all the time.
Just last week, service provider The Host Group launched its first web hosting affiliate program. Similarly, hosting provider SKGold launched a new web hosting affiliate program in October. And in September, hosting provider A Small Orange revamped its web hosting affiliate program to include cash payouts where previously it had only offered affiliates credits toward its web hosting services.
For the affiliates themselves, the program can provide a nice addition to the revenue they generate from some relate service, such as web design, SEO consulting or online security services.
The affiliates in your program could come exclusively from your existing customer base, though many hosting providers open the doors of their program to anyone, including the huge pool of professional affiliate marketers out there.
For a small, cash-strapped hosting startup, the affiliate program can be a big help, because of the comparatively low marketing cost, and the opportunity to invest that money more directly into actual customer conversions.
The WHIR spoke to Bret Hitchcock, manager of the affiliate program for hosting provider Liquid Web, who shared some tips on how hosts can build, maintain and profit from a successful affiliate program.
Starting a Web Hosting Affiliate Program
Starting an affiliate program is fairly easy to do, depending on the amount of resources a web hosting company has at its disposal. The real challenge is in maintaining the affiliate program on a long term basis to achieve real success.
There are several different approaches to launching an affiliate program, including a basic, ground level “form” based organization, a more advanced program that is developed after the web host’s entire sales infrastructure, and a program run by third-party affiliate marketers.
Running and promoting a program will require a significant amount of time and resources – more than many small web hosts with small staffs are willing or able to invest – which is the main reason so many web hosts end up abandoning an affiliate program soon after they launch it.
For those web hosts with the time and resources to promote their affiliate programs to the point where they gain substantial momentum, reaching that level means they can focus more of those new resources on serving those affiliates invested in the program.
“The scale to which one builds their program often echoes the ambition they have to use it and make it successful,” says Hitchcock.
Affiliate Software & Networks
With so many different affiliate marketing software and networks available, it can be a difficult task for a web host to figure out which one best fits its needs.
Web hosts have many options available to them, including hosted applications and software they can install and run themselves. They can choose a network setup in which vendors and affiliates coordinate sales strategies. They must consider whether to use a shopping cart, weigh whether to employ a branded solution or white-label it, and consider a variety of payout methods.
“Software preference is really specific to the website designer in question and their particular applications and goals,” says Hitchcock.
Web Fire, Viral Mail Profits, Social Monkee, Total Ad Explosion, Total Ad Explosion, and The Lazy Marketer are just a few popular affiliate software programs available today.
Recruiting Web Hosting Affiliate Program Partners
Building a network of affiliates is perhaps the most challenging aspect of running an affiliate program. It takes a big investment of time on the host’s part, promoting its brand through social media and other tools. The foundation of a strong affiliate team is a focus on relationships, providing value to the other person first and foremost.
In order to figure out which individuals it ought to approach to become affiliate partners, a web host should first compile a list of online marketers, bloggers, and social media influencers, as well as those companies that offer products and services related to web hosting.
When contacting the individuals and companies on the list, a host should make sure it takes a personal approach, and refrain from working from an email template or telephone script. After all, you want prospective affiliates to feel like they will be joining a closely-knit team rather than a faceless corporation.
Of course, it helps to have a strong reputation for quality products and great customer service. These two characteristics go a long way when it comes to word of mouth promotion and building a large network of affiliate partners.
“An affiliate partners’ ability to earn capital while doing something they were often willing to do, even without the added incentive, generates a great drive to get involved,” says Hitchcock.
Affiliate Program Payout Methods
Affiliate payments are traditionally set up as a one-time payment per new client, paid out to the affiliate at a set time (60 or 90 days, for example) after a new customer purchases services. The delayed payout structure is a safety measure to ensure that payments are not made for accounts that are created, only to be canceled days later.
Some web hosting affiliate programs offer recurring payments for referred clients who renew services, however, this is pretty rare.
Web hosts can also offer an alternative to monetary payouts by offering service credits to their existing customers. For example, a host can give a free month of hosting service for every new client an affiliates bring to the company.
Affiliate Program Advantages
The most obvious advantage for a web host to having an affiliate program is that it allows the company to involve a large number of customers and other companies from many different areas in a mutually beneficial promotional effort. This creates an environment that helps develop positive exposure for all participating individuals while driving potential business to their website.
When executed effectively, an affiliate program can increase a web host’s customer base, increase its revenue, and build its brand.
“The ability to reward those so thoroughly satisfied with our service that they recommend it to others, while simultaneously giving us exposure and helping us find other users who could benefit from it, speaks for itself,” says Hitchcock.
As we’ve mentioned, running a successful affiliate program can take a lot of time, effort and resources — more than many web hosts are able to assign to the task. Building a program you can’t support, or trying to support a program that is too big could distract you form equally-important aspects of your business if you’re not realistic.
Having affiliates in your network who are not well-versed in your services is a disadvantage that you may encounter if you do not take a personal approach to maintaining your program. This can mean new customers, referred by affiliates, who expect something other than what you’re able to provide. Or who believe they’re entitled to something you don’t offer. Even if you can turn those into happy customers, there’s a significant time investment there.
“This can obviously engender the appearance of a lack of sincerity behind the individual’s referral of the company and that is certainly a disadvantage that we strive to – and continue to – avoid,” says Hitchcock.
Talk back: Are you looking to start a web hosting affiliate program ? Have you had success running an affiliate program for your hosting business? What are the biggest challenges you have faced in maintaining a successful affiliate program? Let us know in the comments.