The concept of revenue sharing—paying commission for referred business—predates affiliate marketing and the Internet. The translation of revenue share principles to mainstream e-commerce happened in November 1994, almost four years after the origination of the World Wide Web.
The concept of affiliate marketing on the Internet was conceived of, put into practice and patented by William J. Tobin, the founder of PC Flowers & Gifts. Launched on the Prodigy Network in 1989, PC Flowers & Gifts remained on the service until 1996. By 1993, PC Flowers & Gifts generated sales in excess of $6 million per year on the Prodigy service. (Wikipedia)
The rest is history.
Let me be clear, an ambassador program is one of if not the best ways to grow your Shopify. With rising advertising costs (increase in CAC) and more users moving to platforms where typical ads don’t work (TikTok), an ambassador program is truly a key to success.
In my experience, I have seen brands acquire thousands of new customers through a well-executed ambassador program. The best part, these campaigns are very profitable - not only from a ROAS perspective but entirely profitable (COGS+Commission+Shipping..etc). Try and see these types of returns from social advertising.
Let’s consider the following questions:
Do you need an existing audience? Who do you approve to be an ambassador? What do you send ambassadors? How much commission do you pay them? What other benefits can ambassadors provide? Which apps do you recommend?
Do you need an existing audience?
No, but it helps.
With an audience: The best way to start your ambassador program is by announcing it. How to announce?
- Add “Ambassador Program” to your navigation
- Post-purchase pop up asking your customers to sign up
- Send an email to existing customers
- Create a social post
- Direct message your most engaged followers
What if I don’t have an audience? If you are a relatively new company, simply go on social media and start direct messaging anyone who has engaged with your brand or competitive brands. Provide them with your commission offer and ask if they would like to try your product/service for free.
Who do you approve to become an ambassador?
This is going to vary by brand, budget, and objectives, but the most important metric to review when deciding on an ambassador is engagement rate. See how many likes/views they’re getting per post. See how often they are posting. See how often they’re promoting products.
This is not simply about follower count. In my experience, some of the top ambassadors are those who have under 10,000 followers but great engagement.
What is a good engagement rate? Anything approaching 5% is terrific. Try and avoid anyone near 1-2%. How do I quickly calculate? Review the last twenty posts of your potential ambassador and add up all the likes or views. Divide this number by 20 and then divide that by their follower count.
Tip - Test different strategies with who to approve and review the success rate. After three months, determine the average success rate amongst your ambassadors. Those who fall below 5%, encourage them to get their numbers up. If they don’t - drop them.
What do you send?
Whatever you’re selling - but try and provide variety. For example, let’s say you’re a brand selling nutritional snacks.
Don’t force specific products. During your signup process ask the potential ambassador which of your products is their favorite. If they favor certain flavors or product variations, be sure to include it. Ambassadors are more likely to promote something they already love. Additionally, send any sample or variety packs you may have.
A Content Guide. Include a PDF that tells them everything about the brand, product/services, and why you’re different, your USP. Do you have a slogan? Include it. Specific talking points, include it. A great way to seem like a larger brand than you are is if multiple ambassadors make a consistent statement about the brand. Moreover, I always provide examples of the type of content I look for from the ambassadors. Make it as easy as possible for them to provide you with the content you are looking for.
Do you have swag? Shirts? Hats? Popsockets? Send them their way. Increase the chances of promotion for little to no cost.
TIP - Be sure to include in your terms and conditions that you have exclusive rights to any and all content provided by the ambassadors. You can find an example here.
How much commission do you pay ambassadors?
You want to keep ambassadors excited about the opportunity to make bank! Not only initially, but in months to come. Rule of thumb - don’t go below $3-5 per referral, depending on your product’s retail price.
Commissions are going to vary depending on your current new customer CAC (customer acquisition costs). Here is the formula I use:
Let’s presume your typical CAC is $18.00.
Typical Advertising CAC: $18.00 x .333 = Typical Ambassador Commission $6.00
Simple, ⅓ of a typical CAC through other advertising.
The benefit of this, you cut your CAC significantly and yet it is a high enough amount that it gets ambassadors excited.
Additional Benefits:
UGC: Using ambassadors is a great way to gather UGC. Make sure you set up a specific hashtag for your ambassadors to use to track how much they’re posting and to gather content. You can increase the likelihood of ambassadors providing UGC by offering additional commissions for uploading content to a Dropbox or GoogleDrive folder.
Product Launches: Want to make your brand seem bigger than it is? Align all of your ambassadors to post on the same day. This effectively will make your brand seem like it’s everywhere.
Now go and grow.
J
Recommended Apps:
My favorite affiliate marketing application for Shopify is UpPromote. It’s easy and user friendly for both affiliates and admins. UpPromote comes with great built in tools like brand asset libraries, coupon code generation, short link generator and even its own marketplace. I highly recommended UpPromote.
I haven’t personally used GoAffpro but with nearly 1600 5 star reviews, it is one of the most popular affiliate marketing applications on the Shopify app store.
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