AP 0044: How Do You Create a Successful and Profitable Affiliate Relationship?

AskPat 44 Episode Transcript

Pat Flynn: Hey hey, what's up everybody? This is Pat Flynn, and welcome to Episode 44 of AskPat. I'm here to help you answer your online business questions five days a week.

Today we have a question about affiliate marketing—something that I do a lot of and make a significant amount of income from. I do it in a way where everybody's a winner, where actually people are thankful for the products I share and recommend to them, and in return I get a commission as well. It's a great business model, if you know how to do it the smart way. I actually have a presentation that I did called Affiliate Marketing the Smart Way, which goes over all of this and my exact strategies for doing it and it's free. You can head on over to AskPat.com/smart-affiliate. That's AskPat.com/smart-affiliate. That'll redirect you to that presentation on my other blog. In a podcast episode, you'll hear that presentation right there. So, I'm going to go over a little bit of that today after we listen to this question from John.

John Kenney: Hey, Pat. It's John Kenney from JohnnyKAudio.com. I wanted to leave you a message today to ask you how in the world you got something like Bluehost as an affiliate to work so well for you? I mean, honestly, I look at your affiliate numbers, $20,000 to $35,000 a month just from one service. I'm not only envious and in awe and completely intrigued, but I want to know how I can find an affiliate and work an affiliate the way that you have in a simple eight-minute video that could generate that kind of income? I mean, to me, that's just completely unfathomable. I don't understand how . . . It's incredible, genius, that you were able to figure out—that you were able to create such a simple video and do such a simple task and create that kind of income from it.

I mean, you have to understand, that is life-changing. $20,000 a month from one affiliate. Even last month, January, your income report shows you made $35,000 in one month from that one affiliate amongst several affiliates that you have. That would be completely life-changing. I'm making $3,000 a month as a full-time musician right now; I can't even begin to imagine what $35,000 a month would look like. I know that you're making much more than that, that you're doing way better than that, and that there's other people out there with businesses that are doing even better. John Lee Dumas is making six figures a month. I cannot imagine what that's like.

I think that I'm having a hard time with my mindset and wrapping my mind around the fact that that kind of money exists and that you can provide that kind of value in eight minutes or less and still create that kind of income for yourself. So, for me, I would like to know how can I apply that to my specific business, to my life? What steps did you take to get to multiple five figures a month from one single affiliate service like Bluehost?

Pat Flynn: John, thank you so much for your question. You know, that boggles my mind sometimes when I think about the numbers as well, tens of thousands of dollars a month from affiliate marketing in general, but a significant amount from this one company, this one product that I'm recommending to my audience. For a while, I didn't understand why it was working so well. Once I started digging into the analytics, once I actually started asking people and being conscious about what exactly people were doing on my site, then I started to understand what was going on. I'm going to give you a little bit of insight on what I know about why Bluehost works so well. So, to answer this question, why Bluehost works so well, because it's almost unbelievable, there's four things I want to break down for you.

The first one is, you need to provide massive value. That's something that Bluehost does: They are a company that makes it easy and relatively cheap to set up a domain and hosting account so somebody can build their website and start their online businesses, which is something that I talk about. So, in my talking about online business and teaching by example and setting up websites and new businesses, I'm able to recommend, based on my own experience with Bluehost, a company that I know is going to take care of my audience, because it perfectly aligns with their goals, it's getting a significant amount of conversions. I think that's an important thing to think about. A lot of people make the mistake when affiliate marketing or trying to get into affiliate marketing by picking the products first or choosing the ones with the best commissions, and that's not the approach that you should take. You should take the approach of, “Okay, where is my audience when they come into my site? What are their problems, issues and pains? And what do they want to do?” Then, on that path from where they are now to where they want to go, you lead them, and sometimes you lead them with free information. Sometimes you lead them with paid products, and sometimes those paid products aren't your own. Sometimes those paid products that aren't your own also come with an affiliate commission. Bluehost is one of those companies. Now in addition to providing massive value, you also have to earn massive trust and that's another reason why I believe Bluehost is doing really well for me, because people trust my recommendations. That doesn't come right away. That doesn't come the moment people come and visit my site. It comes after experiencing my site and sharing information and providing value to them, and then over time that authority and trust is built. So, when they get to a point where they're going to start their own website, again, they're looking for the quick and the best information. They trust me, so they're going to go through my recommendations.

Now, beyond that, I'm also making it incredibly easy to find those links. Those links are mentioned. Those Bluehost affiliate links are mentioned on several places on my site. Overtime, once I started to understand, “Okay, where is my audience? Where are they? What are they interested in? What are the most popular articles on my site that are related to that hosting company and also setting up a website?” Then I know to put an affiliate link there. For example, on my Resources page, I mean, that's a no-brainer. I think everybody should have a Resources page. It's probably the best . . . I mean, it is the highest-converting page as far as those links and a lot of other links on my site as well. What I love about that is people go there looking for quick answers and tools and resources and things like that, and I'm there just providing that information as a list. I'm not hard-selling anything. It's just a list and it's convenient for them. I get a commission on the side as well. It's just a win-win for everybody. So, it's a great nonaggressive way to provide value and also get paid back in return. In addition to the Resources page, I know that a lot of people end up on my Getting Started page. So, I made sure that on my Getting Started page, which people access the moment—and I mean, they see a button for it the moment they land on my site that's somewhere in that copy, or it's just my story and what to do to get started, which actually gives away a lot of information first. Then I say, “Okay, well, if you're going to start out here, your first step is, here's the hosting company that I use,” and then I share examples and that's an affiliate link and people go through there. In addition to all that—and I know I said I was going to say four key things, but I'm just kind of sharing everything I know about this and why I know it works so well—another thing I do is I tell people that it is an affiliate link. Often times whenever I drop that affiliate link on my site somewhere, I mention it's an affiliate link and a lot of people don't do that. The reason why I love to do that . .. Well, first of all, you should be doing that anyway, if you're in the U.S. at least for the FDA . . . Is it FDA, Food Drug Administration? No, that's not right. For the FTC. For the Federal Trade Commission rules, you should be as honest and transparent as possible with where you're getting paid back in return for mentioning certain links and resources and companies and things like that. Also, beyond that, a lot of people, if you provide value for them, they're going to want to pay you back in return. A lot of people don't know that going through a link of yours is one way to do that. So, when you give them those affiliate links and say, “Hey, if you go through this link, I do get a commission on the side, thank you so much.” A lot of times, people will see that and be like, “Wow, this article was great, you've helped me achieve something, I want to pay you back, and I'm going to look and find your link and click on it to make sure you get paid in return.” What's cool about that is it's no additional cost to your audience member. When they purchase that product, that money is not coming from their pocket into yours. It's coming from the company into yours. So, they're not paying anything additional to pay you back in return. That's why I always love sharing that I'm sharing affiliate links. Again, I'm just being honest, but it also serves that double purpose. Of course, I don't want to mess with the FTC.

Anyway, now, another thing I did, which you mentioned, John, in your question, was that video. Now the video, you mentioned the video and it made . . . Your question made it seem like that that was the only thing I did. No, there's a lot of stuff that I did, like putting these links on these certain pages. One of the things that worked out really well was this video. What I did in this video is something I like to call “unboxing the mystery.” One struggle that people have when affiliate marketing is they don't treat those products as if they were their own. If you were selling your own product, wouldn't you want to show everything about that product to your audience so they know exactly what they're getting and that they're getting their money's worth when they purchase it? Most people, when they do affiliate marketing, they just say, “Hey, here's this link. Go through it.” Why would people go through that link if they don't know exactly what's on the other side and how it's going to help them? So, what did is I created a video that walks people through the process of how to start a blog on Bluehost. I walk people through that process. It's no mystery anymore. People see what they're going to get on the other side and they see an example of how easy it is to set it up and boom—it's an affiliate commission for me, because I'm providing value and I also mentioned that affiliate link at the end of that video. It's just higher value information than just reading a blog post. Also, if that trust comes along with it, then of course they're going to go through that link. So, that video does a really good job and it also shows that I'm not just doing a review, I'm just showing people the process that sort of breaks down those security walls that people have, so that they know what they're getting. Then they can make an informed and educated decision based on what they see and that experience that they don't have to pay money for yet, because I'm doing it. Then it's a win for everybody. Again, so, treat these products you're promoting as an affiliate as if they were your own.

Part of what goes with that is actually using those products. It almost seems like a mandatory thing that should happen, but a lot of people don't promote items that they've used before. Now why would you ever risk that? Why would you ever risk doing that? Because if you promote a product that you've never used before to your audience and that product doesn't work out well for them or they have a hard time with that product, it's going to leave a bad taste in their mouth with that product and the owner of that product, but it's going to leave an even worse taste in their mouth for you, because you were the one that recommended it. So, you've got to make sure that these products are perfectly suited to your audience because that's part of their path from where they're at now to where they need to go. You've got to know exactly what happens when your readers, when your subscribers leave your page, and then are sort of taken over then, and that experience is no longer under your control. You've got to make sure that that experience is good. Of course, you can show them what that experience is, like I mentioned, by creating a video. It doesn't have to be a video. It could be a blog post. If you go to StartAnEmailList.com, that is a particular page where I show people how to start an email list and a newsletter and that, of course, mentions my email-hosting service provider that I use, which is AWeber, but again, the purpose of the article is to provide value and show people how to get started. I just so happened to mention AWeber, because it's the one I use and I trust it and I show screenshots of what happens and how to get things set up. So, I think with all this, and the most important thing is I'm leading and teaching by example. I think that's a big thing. My affiliate commissions for Bluehost significantly jumped from mid four figures to mid five figures, almost $10,000 – $15,000 more a month in a very rapid time period. It was because I actually showed proof that I was building a website from scratch and I just happen to use Bluehost within that process and I shared every step along the way. Then when that site that I built publicly on my website at SmartPassiveIncome.com, which was SecurityGuardTrainingHQ.com—and that site is still up today and generating between $2,000 and $3,000 dollars—that was just proof. Proof is probably the best thing you could have. So, if you could prove to people that these products are going to work and you can lead and teach by example, using yourself as the sort of crash test dummy, if you will, which is what I call myself, or the guinea pig for showing people that that product will work for them and showing them all the ins and outs of it—not just like a review, but just even the bad things, even the bad things you want to show them, because you want to be honest. Perhaps when you find bad things in these products that you want to recommend because you know they work, they're just not fully there yet, or maybe there's parts of it that you want to warn your audience about, maybe that's where you can go and also create bonuses and things like that, which is going to help you stand out even more and help you differentiate yourself from everybody else who's also recommending that product. “Hey, you know what? I know this product more than anybody else. I even know that this segment right here isn't the best it can be. That's why I created this PDF file for you that's going to help walk you through this process in even more detail than that product will. I mean, can you imagine how much a person who reads something like that can trust that person who created an addendum, or sort of an extra PDF bonus for that particular item? I mean, man, like of course, I'm going to go through your affiliate link if you do that. So, those are some strategies that I use for affiliate marketing. Of course, the most important thing, circling back to the front, is it just makes complete sense that particular product, Bluehost, which is the domain and hosting company that I recommend, that makes perfect sense for my target audience.

So, beyond everything we just talked about, the very first thing you need to know is: Who's your target audience, and what can you do to serve them, and what products and tools are out there that could possibly serve them to help them achieve their goals? You need to use those products. You need to test them and see what is best out there and then recommend and show people everything there is to know about it. Then fill in the holes with bonuses and examples of your own. And again, it's going to be a win for everybody and that's how I've done so well. So, I think that's the gist of it, but if you want to get more information, like I mentioned at the top of the show, you can go to AskPat.com/smart-affiliate. Smart-affiliate, and that's going to help you just understand this process even more, because it is something that takes a little bit of practice.

I think when you think about it from your audience's point of view, it's going to make perfect sense. I'm very blessed that with Bluehost as well, because I'm doing my job in trying to increase conversions by putting that link wherever people are, Bluehost is also doing a great job of increasing conversions on their end as well. John mentioned that I generated $35,000 from that last month, which I did, which was a significant jump and that wasn't anything different than I did from the previous month. The difference was Bluehost itself was working on increasing conversions and testing landing pages and things like that. So, they were able to increase—at least in my mind, I saw an increase from about 7 percent conversion rates to 9 percent conversation rate, which was huge. The lesson there is if you're working with a company and it's working really well and you're starting to provide value to your audience with these third-party products, if you get a little bit of volume, you start to have a little bit of . . . You could begin a conversation with that company and perhaps try to help them improve their conversions too, because you can only do so much to control what's happening on your end, but when people click on that affiliate link and leave, they've got to make sure they're getting it on their end as well. So, if you're conscious about the experience that your audience is having, that's something you could bring up. It also shows that you're a serious affiliate and that you care about your audience and you care to help this other company that you're going to be promoting or the other companies you're going to be promoting. You're going to help them make more money in the long run as well when you do that and you can bring them information. Not all affiliates will do that. So, they might treat you special and of course beyond all of this, because of that relationship I've had with Bluehost for a while, we've been able to negotiate a higher commission as well. So, those are things that can happen once you start going and understanding the relationship that you have with this company that you're an affiliate for, and also sort of have that and align with the relationship that you have with your audience. So, John, this was a little bit longer than a normal answer, but a lot of information here. You asked a lot of great questions and I wanted to be honest and upfront.

This is important because affiliate marketing is a great business model if done correctly, and I hope I've given you enough information to sort of give you a boost in the affiliate commissions you have now, or perhaps get those gears turning for products that you maybe use and know that will help, or it'll get you to go out and reach out and try other products that you think might help with your audience as well. We'll see what happens, but thank you, John, so much for your question. An AskPat t-shirt is going to be headed your way. And again, the resource that I mentioned at the top of the show is my presentation called Affiliate Marketing the Smart Way, which is at AskPat.com/smart-affiliate.

Lastly, if you have a question that you'd like potentially answered here on the show, just head on over to AskPat.com, check out the whole library of existing questions there, and also check out the widget that you can use to just use the mic at your computer to ask me questions that might potentially get featured here in the show.

Now, lastly, of course, I'm going to leave you with a quote like I always do, and that quote today is from Warren Buffett. He says, “The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective.” So, the reason I pulled out that quote is because when you're sharing information to your audience about these affiliate products that you're going to be promoting, just try and make it as easy as possible for them to do that, because it is a lot more effective. You don't have to come out with all the bells and whistles and pretend that you're somebody who's so incredibly knowledgeable about everything about that product, but just make it simple and that's going to do the job. It's simple for you, simple for your audience, win for everybody. All right, take care, thank you so much, and I'll see you in the next episode of AskPat.