The Future of Affiliate Marketing & The Advantage of Being Small

There is a monumental shift happening in affiliate marketing, with huge implications for you! If you miss it, you’re going to get left behind! Over the past couple of years, we’ve run multiple multi-million dollar affiliate launches…and they looked NOTHING like the launches of 2010, 2015, or even 2019…because of the seismic shift that is occurring in the industry.

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Previous Episodes of The Affiliate Guy

Surprising Benefits of Affiliate Marketing Part 3

Surprising Benefits of Affiliate Marketing Part 2

Surprising Benefits of Affiliate Marketing Pt. 1

The LIE About Monetizing

How to Promote MORE Affiliate Offers Without Burning Your List

The Future of Affiliate Marketing & The Advantage of Being Small

In the last episode I mentioned that the plan was to do a roughly five part series based on lessons from two huge affiliate launches that we ran recently back in March through May. Total over $10 million in sales and as I was preparing for this series ended up being like 8, 9, 10, 11 parts. I’m not even entirely sure yet. Last week I talked about this kind of new model, but I talked about it from the affiliate perspective. This week I want to talk to you about it from the affiliate programs perspective.

As an affiliate manager or a product owner, what this means for affiliate programs. We have a bunch of lessons, at least eight parts coming up that are specifically from lessons from these launches. There’ll probably be the next few episodes that are going to be kind of a spinoff from this one, then we will pick back up. So there’s really no exact pattern to these episodes just to be clear. If I didn’t tell you, they were part of a series, you wouldn’t even know really, but today I want to really hone in on this new model for affiliate programs.
I’ve been predicting this shift would happen for years. I always joke that it’s slide 37 on my webinar where I talked about, this is the way affiliate programs should be run and this is how we run them.

I started it about six, seven years ago, and now finally people are getting on board that is changing the entire landscape of affiliate programs and affiliate marketing. The traditional model is just getting thrown out the window and this new model, as I said last week, it’s the model of the future and the future is now. So what is this shift I’m talking about? What’s the shift from the belief that in order to run a successful and for some of you this means, multi-million dollar affiliate program to run a successful affiliate launch, to run a successful evergreen program. You have to have a bunch of big names and big affiliates or really you need a handful not a bunch. You need a handful of big names. Like “I just gotta go out and get like four or five big names, big affiliates.” This is simply not true. The shift is that affiliate programs are moving away from this model of only working with big established affiliates and moving toward building an army of small engaged affiliates.

The shift is going away from, well, we have like three or four big name people that maybe have no sense of loyalty to us. We’re going to work with thousands potentially. Both of these big launches I talked about had one had about 500 and one had over a thousand affiliates. They were mostly small and they were super engaged, super loyal, super dedicated to the promotion.

They were going, some of them who had a tiny, tiny list and I’m talking like under 200 people were working their butts off just to make three or four sales. I mentioned in the last episode that I’ve had multiple private conversations with some of these high level entrepreneurs, people, some of these are clients, some of these are just people who have run 5 and $10 million launches.

They’re on board with this trend. I’m not going to mention names, but one in particular, I mean, I’m done with the whole like reciprocal promotion thing. I’m done with the whole, I promote you, you promote me. I’m done with the whole, like, people backing out because their calendars got in the way. It’s like, I only want to work with people who are loyal. I want to work with people who are completely and utterly dedicated to my promotion. I want to work with people who have an experience with my product, with my course, whatever it may be. and they’re saying, like “I had a good experience with this. It changed my life.” and I have to be an evangelist for it. I only want to work with evangelists, not just people who are in it for the money, not just people who send a few emails and maybe they send only a couple of emails and they make 200 sales, but I can get 50 people who will bust their butts and make five sales each and that equals more. That’s that new model. It’s that new model. I just did this Facebook live about two, two and a half weeks ago, based on when this actually airs as an episode. It was called 10 reasons why you should work with small affiliates and I’ll link to that in the show notes. So I won’t repeat what I said in that, but just to give you kind of a high-level overview,I talked about some of the benefits of working with these small affiliates, because a lot of people say, “Well, it’s not worth working with small affiliates. Like they’re not going to make many sales.” Remember the whole thing about not putting all of your eggs in one basket, if you only have five or six affiliates, that’s five or six baskets versus a thousand baskets.

One of the reasons that I love small affiliates is diversification. That diversification of your affiliate base and building that army. I talked about how smaller lists are more engaged, how smaller affiliates are generally more open-minded and they’re going to actually follow what you teach them. They attend your training. They learn, they tend to be more loyal, they’ll promote you more often, your loyal affiliates. You might have hundreds of smaller affiliates and they’ll promote you two or three times a year if you let them. Then they grow, small affiliates grow and they help you create this affiliate army.

I shared this example in there, and I’ve shared this before on the podcast, but imagine if you have 100 small affiliates today, and these are affiliates that may be that make an average of a half a sale. So 50 sales between these 100 affiliates, you could have three affiliates who make 500 sales. So 50 versus 500, 500 versus 50 with a fraction of the effort. But here’s what happens if you fast forward to next year those 100 affiliates that made 50 sales last year, they’ll make 150 this year, if still not 500. But one of those three doesn’t promote. So now you’re down to 300. So you’re at half here and half the amount. The next year those 100 affiliates make 300 sales equal to what your big affiliates made. The following year they’ll make 700, the following year after they’ll make 1500 and that’s what happens because of all those hundred, what happens is 50 of them if you fast forward five years, even three or four years, if you fast forward a few years, 50 of them will double in size. So they’ll go from maybe a list of 300 to a list of 600, not a substantial growth, but they’ll go from making an average of a half a sale to one sale. That’s okay. That’s an additional 25 sales out of those hundred that’s not bad. It’s a noticeable, $2,000 product that’s 50 grand. I don’t care how big you are. An extra $50,000 is nothing to sneeze at, 30 of them will triple, maybe four X in size. So we’ll go from a half a sale on average to maybe two sales on average, on a micro level. But that’s an extra roughly $125,000 give or take and a little bit of math there. That’s noticeable. So that’s 80 that have either doubled to 4X, again, not huge on a micro level, but starts adding up, another 10 will be five to 7X. So they go from a list of 200 to a thousand, but go from a half a sale to four or three sales.

Okay. Pretty cool. So you have 10 left, two or three of those, 10 will, 10 or 12X. All right. Now we’re starting to talk, but still nothing major, but guess what? Three or four or five of those 100 will be 50 to 500X. They’ll get on Oprah. They’ll get featured in a major magazine. They’ll figure some marketing out on their own and their list will go from 300 people to 25,000 people, to 80,000 people, to 150 to 250,000 people and they will remain loyal to you forever. They will continue to promote you and promote you and promote you and promote you. They’ll go half a sale to 400 sales, more than any one of those original top three, because of that loyalty.

I had been preaching this for a decade that this is the way to do it and now it’s starting to come to light. Now everybody’s starting to see this and we had talked about those two launches, right? One of those launches, they lost almost half their top 10. The other launch lost eight of their top 10, including 27, 28% of their sales from one affiliate, massive affiliates. But we fostered those small relationships. One of the launches that were total affiliate sales, 2042, total affiliate sales of a $2,000 product.

You wouldn’t recognize more than one or two names at the top 40. If you look at that leaderboard last year, you’d recognize a lot of names, including me. I finished eighth place in that launch last year, you would recognize a lot of the names. You wouldn’t recognize almost any of the names in the top 40 this year, we had 215 affiliates with the sale, 215 affiliates to the sale. You can do the math. What’s 2042 divided by 215,

less than 10 average affiliates had less than 10 sales get this of the 215 with a sale, almost exactly half of those affiliates. It was their first ever sale of that product. 107 affiliates had their first ever sale of that product. Get this total sales from first-time affiliates 40% of all the sales, not just their first sale of that product. It wasn’t just their first affiliate promotion of that product. It was their first affiliate promotion ever. All those people aren’t worth working with. Those people aren’t worth working with well, but they take too much effort. They require too much hand holding. I mean, don’t even move the needle. They email you 42 times and then make one sale. It’s not worth it.

First of all, they don’t require that much effort. You can do these things in a group. You can train them in a group. We’ll talk about that in the next few episodes, but they help you create that army of loyal affiliates who promote often and will grow. And like I said, they’re more open-minded and they learn and they follow what you tell them to do.

I think of one of the affiliates, the previous year, Sarah Williams had nine sales nine, not exactly a tiny affiliate, $18,000 in sales is not something to sneeze at, but not, compared to a $2 million affiliate, not exactly a huge deal this year, 170 plus sales, more than 170 sales. Why? Because of the training and listening and the following what we teach, but what if we hadn’t have invested in her? What if she just made nine again? Or maybe 15? Well, we would’ve missed out on 300 something thousand dollars in sales. If you actually look at the numbers, everyone improved, like everyone who finished in the top 10 this year, almost on the small end grew by 80% or more this year. These were all like affiliates who finished in 28th place last year, 43rd place last year. Weren’t even on our radar this year. If you go down to like the top 30 and we’re talking affiliates with $40,000 plus sales, some of the affiliates that made $40,000 more weren’t even on our radar as far as being top affiliates, but they attended the training sessions. They paid attention. They executed, they went out of their way. They did everything we said to do and more, and they ended up being a top 30 affiliate.

We noticed the same thing in both of these launches, the exact same thing happened in both of these launches, but it’s been like this for years. This is not like a new thing. It’s just that it’s coming to light because it’s happening more frequently and it’s happening at a higher level. When we were proving this model years and years ago. We proved it with Michael Hyatt’s launches years ago, it was like a $1.2 million launch, which was four times bigger than his previous launch but it wasn’t a five and a half million dollar launch. We did, like I said, at a $1.25 million launch with Michael Hyatt and if you look at the top of our leaderboard, it was Jeff Walker, Sally Hogshead, PatFlynn Ray Edwards, Stu McLaren, John Lee Dumas, Jeff Goins like who’s who right? but the top 3 affiliates, Jeff Walker, Sally Hogshead, and Ray Edwards were only a candidate for 14% of sales, the top 10 only accounted for 27% of sales. We had 514 affiliates make at least one sale. Most of our sales came, if you look at the total number of sales, it was from those who had five or less sales, the affiliates who had five or less sales, I believe accounted for just over 50% of the total sales. If you went up to 20 or less it was 40%. That’s what it was, 41% had five or less. It was like 63 or 64% had 10 or less sales. 500 affiliates made one sale. It was crazy. Ray Edwards, this is only back in like 2015-16 in Jeff Walker. Jeff Bullas, Don Miller, Michael Hyatt,

Dan Miller, Craig Ballantyne, Chandler Bolt, John Nemo at the top of the leaderboard and yet their top three, Jeff Walker, Jeff Bullas and Donald Miller only accounted for 19% of sales. Their top 10 barely accounted for a third of their sales 34%. We had 16 affiliates that year, who ended up finishing in the top 20 that doubled their sales year over year. Then the following year, we had a guy named Mike Kim, who wasn’t even, it was like sniffing the leaderboard the year before. He won the affiliate competition. He beat Jeff Walker with a list of 5,000 people. Why? Because we invested in him. I remember where we met at the mastermind. We had a mastermind for the top affiliates we met in Coeur d’Alene Idaho.

We brought all the top affiliates in for a two or three day mastermind. We went hiking, we went out to dinner, we had some fun together. I was like, “dude, everybody wants to know, man, how’d you do it? How did you win this?” And he was like, “I just did what you said to do man, just whatever you said to do, I did it.” Okay. What am I bragging about there? Yes. A little bit. But no, what I’m saying is like, he’s a small affiliate. He doesn’t know what he doesn’t know. He followed what I taught and it worked and he actually won and the end result was Ray had two times his annual revenue in just one month, two times his entire previous year’s revenue, he got in one month.

The same story is playing out time and time again. It’s why people are coming to us to ask for help, it’s why our coaching program, you can find out more about it. It’s called Your Affiliate Launch Coach. Just go to youraffiliatelaunchcoach.com and you can apply there. When you apply, by the way, we’ll just have a call, we’ll see if you’re a good fit. We’ll let you know what the investment will be and what that looks like. So there’s no obligation just to be clear. This is why people are blowing that up because the old model simply does not work.

The old model says, again you have to like most of your sales are going to come from only a few affiliates. Like this lie is so pervasive that I literally heard one of the top names like this is someone you know, one of the top names in internet marketing space, claim this as a statement of fact from stage, I wrote it down in my book that I was taking notes and he said, 90% of your sales will come from your top three to five affiliates.

Let me be brutally clear here. This is nothing more than a cop-out. This is an excuse not to work with smaller affiliates, not to invest in the resources of time and energy and occasionally a little bit of money, what it takes to get those smaller affiliates to perform. It’s an excuse not to work with them. You’re going to miss out on all those advantages though, right? But it’s an excuse to go and get your three or four best buddies. If you’re one of the big internet marketers, maybe a few other people call it a day but I go back to something that I’ve repeated often. If you’re listening to this podcast, I don’t think you’re one of those people. Who’s just content to sit back and run your little insider’s club with a few affiliates. And that’s it. Am I right?
If you believe what Tony Robbins says, “if you’re not growing, you’re dying.” Standing still. I don’t even care. I don’t care if that still is a $20 million company that just doesn’t feel right. It feels like I’m standing still because I am, it feels like I’m dying. So this client, or this person that I mentioned from the stage that said that this person that got up there in front of everyone and said, 90% of your sales will come from your top three to five affiliates. They’re a client now. They’re on board with this new model. This new model says that you don’t have to have a personal relationship with all of your affiliates. You don’t need to be best buddies with all of your affiliates. If you’re going to run an affiliate program that is consistently growing year after year,

it’s simply not possible. Like we said earlier, you want an army of affiliates. Some of whom you might not even know. This new model says that small affiliates are worth the quote unquote, hassle, they’re worth the hassle because of all the things I said before, because of the diversification, because they’re small lists, they might only have 500 people on their list versus somebody who’s got 50,000. Those 500 are super engaged and when you have a small list versus a big list, you can be a Mike Kim beating Jeff Walker. It’s worth it because they’re more open-minded and they learn and they will follow what you tell them. And they’re more loyal and they’ll promote you more often and they grow and they help you create that army. It’s worth it. It takes some time. It doesn’t necessarily pay off right away, but it’s worth it in the long run and it’s even worth it in the fairly short term, a year or two or right away. 40% of your sales could be from first time affiliates, you could be missing out on 40% of your sales.

The other launch that I mentioned, it was almost 25%. It wasn’t quite as dramatic, almost half the sales. One quarter of all the sales were from first time affiliates, even higher, almost a third of the sales were from people who made their first affiliate commission. They’d done one or two affiliate promotions before and never made a dime. So you say, oh, well, they’re not worth it. They’ve done it. They’ve promoted affiliate promotion and not made a dime. No, this was their first. The first one was 40% were from first time affiliates it was almost 50% were from people who made their first affiliate commission. One lady that I’m thinking of in particular, who doesn’t count in that 40%, she had 11 sales, $22,000 in the scheme of a $5.5 million launch, not a dramatically huge deal, but I look at it this way. It pays about a quarter of a team member’s salary for the year. Probably that’s pretty cool, three months salary.

This lady, it was the third time she’d ever promoted something as an affiliate. She promoted the same thing last year and she posted something else earlier in the year and made zero sales in both. Well, what was the difference? Again, yes. I’m bragging in a way. The difference was I invested in her, I trained her, she showed up to every training session, she went through every worksheet, she followed the model. She did exactly what we told her to do. She made 11 sales. She made 40% of 22,000, $8,800 in commissions. She brought in $22,000 for us. When I say I invested time with her, I individually responded to a few emails in a Facebook message and a DM on Facebook. Everything else was in a group.

I would have spent that time whether she had been there or not. So the total amount of time I spent specifically with her was probably five to eight minutes. But every transaction I made her feel like she was somebody worthwhile. Because she is and paid off. Doesn’t necessarily pay off right away like that, but it will pay off. So the old model is broken. This old model just brings on a few affiliates and lets them go. It does not work. So if the old model does not work, what does work?

Well, stay tuned because over the next few episodes, I’m going to share exactly what to do. I’m going to share what we call the three C’s of successful affiliate programs. These three C’s are how you get these small affiliates to outperform, these three C’s or how you get a first-time affiliate to make 10, 20, 30 sales, these three C’s, or how you even get the bigger affiliates who might make a hundred sales to make one hundred and twenty, a hundred twenty five. It works on all levels of affiliates. These three C’s are key to successful affiliate programs. And they’ve been what we base our success on with our clients over the years.

Again, just as a reminder, I will link to that Facebook live that I did the 10 reasons why you should work with smaller affiliates. You definitely want to go check that out. I’m also going to link in the show notes. If you want to get started, if you want to go find affiliates, whether you know them or not, you have a relationship with them and they are smaller, big. If you go to Mattmcwilliams.com/first100. I’ll show you how to find affiliates. So make sure you grab that free report if you haven’t already and also link to our coaching program so you can apply for that and we’ll talk and see if it’s a good fit. See if you’re a good fit for Your Affiliate Launch Coach.
All those will be linked in the show notes. Make sure you check those out and I’ll see you in the next episode for part one of the three C’s of successful affiliate programs, make sure if you haven’t yet, make sure you subscribe in your favorite podcast player, whatever it is, subscribe so that you don’t miss an episode.

And if you know someone who could benefit from this episode, they bought into the old model and they need to know this new model and then they need to know the three C’s and everything else that I’m gonna be sharing over the next few weeks. Make sure you share this episode with them. So they get the benefit from this information as well. Let’s wrap up and I will see you in the next episode. Part one, the three C’s of successful affiliate programs.

Thank you so much for listening today. Remember to check out all of our deep dives into affiliate marketing at theaffiliateguy.TV and if you have a question, ask it at asktheaffiliateguy.com who knows maybe you will even be featured on an upcoming episode. Lastly, if you haven’t yet make sure to leave a rating and review wherever you’re listening to this episode. See you soon.