5 Things You Should Know Before Launching an Affiliate Program – Transcript

[Intro Music] This is Office Talk with Annette Stepanian.

Annette:

Welcome back to another episode of Office Talk. Thank you so much as always for being here. And this week, we’re gonna dive into a Legal Quickie all about what you need to know when you launch your affiliate program.

But before I dive in, I wanted to bring you up to speed on a few things coming up on the horizon. Now, you may have already heard me mentioned that we are quickly approaching our one year birthday of the show in September, which is really, really exciting. Because to be honest, I can’t believe that I have done this show week in and week out for nearly a year. And I’m so grateful that you have been here as a listener, listening to the episodes, it really is a thrill for me to put this together every week. And so in honor of the birthday, we have some exciting things planned for you guys. But one of the things that’s coming up in August is you’re going to have a chance to pick your favorite episodes. And we’re going to go back into the vault and pick our fan favorites. So if you’re not already following me on Instagram, make sure you do. I’m over @annettestepnian. And each week, we’re going to introduce a few episodes, and you’re going to have a chance to vote for your favorite. And we’re going to re air that in the following week. So that’s just one little thing that we’ve got planned. But we have a few other surprises up our sleeve. So make sure to subscribe to the show, follow me on Instagram, or to subscribe to our email list. So you don’t miss out on all the goodness coming your way.

Also happening in August, I’m finally releasing my online training, called Let’s Get Down to Business. It’s a step by step guide to starting your dream business the legal way. You know, I’ve heard it a million times before, when it comes to the law, so many folks tell me I don’t know what I don’t know. You have this great business idea. You have this passion for whatever it is that you create, whatever service it is that you provide. And you want to get started and you want to do things the right way, but you get very overwhelmed. And it’s scary because you don’t want to get sued, you don’t want to get in trouble. You waste hours on the internet trying to figure out how to get your business started. You post in Facebook groups and you get conflicting advice. So what I’ve done is I’ve put all the things that you need to know in a step by step format that you can follow to get your business up and running. I’m giving you the essentials, they are quick steps that you need to take. And hopefully by the end of it, my goal is that you are going to have everything you need to get your business up and going. So that Let’s Get Down to Business online training is going to be launching on August 7. So stay tuned for that, because there’s some extra bonuses I’m going to be giving away if you sign up early.

Okay, so now let’s turn to this week’s topic. Some of you guys might be considering running some sort of affiliate program for your business. Maybe you sell an online course, maybe you have some sort of product. Basically the idea being that you want to recruit other folks to help share the news about your products and services. And any sale or referral that they send you will translate into a commission to the affiliate.

So I wanted to walk you through a few best practices to consider when implementing an affiliate program for your business. And specifically, there are five things I want you to start thinking about.

Now the first thing is I want you to screen your affiliates to ensure that they are a good fit for you, your brand, and your program. I know how tempting it is for us to go for volume here. But it’s really important that you know who you’re putting into the program, because not only are they an extension of your brand, but you could potentially be held liable for their statements or actions related to the promotion of your company or products. So my recommendation here is to choose wisely. Consider doing some sort of pre screening, maybe an application process and then admitting only those affiliates into your program who represent your company values.

Now I’m going to go on a little bit of a tangent here. So just indulge me for a minute or two. I have been having a lot of business a-has lately, and particularly this one that came up over the last few weeks that I’m calling bigger is not always better. Okay. And this is basically what’s been happening. My husband and I are doing some work around the house. And so we have been frequent visitors to a lot of hardware stores and we’re ordering different supplies. We went to one of these bigger hardware stores and put in our order. Let me tell you that the whole process has been such a pain in the butt. Basically just the process of ordering and talking to somebody at the store level is difficult because they seemed to be very understaffed.

Once we ordered the items, the actual shipment came in two shipments. So when the first shipment arrived, we went to go pick it up. And it took us five hours of waiting at the store for them to locate the shipment. IIt was sitting on the floor the entire time. When we asked them to look at the floor and check for it, and they didn’t. So five hours later, we finally picked up the first shipment.

And the second shipment was supposed to arrive on a certain date. Wwe got an email saying that it had arrived, we go to the store to pick it up. Guess what? It’s not there. A week of phone calls and store visits and going back and forth. And it’s at this distribution center. No, it’s on a plane, it’s on a train it’s on. I mean, it’s just been a complete nightmare, trying to get ahold of somebody, even just calling the store, we cannot get through to anybody, nobody picks up.

So that was that experience. You always learn and you move on, you make the best of it.

But fast forward to this weekend, I went to another local hardware store to pick up some supplies. And my goodness, the experience was so different. I walked in, people were friendly. Right away, someone was able to help me, he was able to walk me through all of the features and pros and cons of whatever it was I was buying. And then he said go wait in line, I’ll bring the products to us or you reserve your spot in line, I was immediately helped by somebody who gave me a coupon. And then they offered to take my items and help me put it in the car. And it was just such a difference. It was so night and day. Where it felt like in this local hardware store, they’re kind of tripping over themselves to help me. Whereas kind of in that bigger store, I was having a hard time getting anybody to help.

It just dawned on me that as business owners, oftentimes we are always striving to be bigger and have more and to have more affiliates to have more this and that and to grow and have more employees. But I think you have to be careful because as you grow, things seem to fall through the cracks. And I think there is a market and a value to staying small and focused and niche, especially as it relates to your customer experience. So don’t always feel like that you have to have a million affiliates to have an effective affiliate program. I’d rather see you guys have a handful of really Rockstar affiliates who are going to help promote your products and services than having everybody under the sun in there. Wspecially when you keep in mind that an affiliate is an extension of your brand. And also you could be potentially liable for their actions.

Okay, so that was my tangent. Thank you for indulging in that. And now let’s go to tip number two, which is I would require affiliates to acknowledge an affiliate agreement. So whenever you enter into a partnership, a collaboration and affiliate relationship, it’s always wise to document the terms of that relationship in writing. You guys should know this, right? I mean, if you’ve been listening for a while, you know, I’m all about those contracts, you should ask all of your affiliates to sign an agreement outlining the terms of your program. So things like the compensation structure, your affiliate duties, any required FTC disclosures, and we’re going to talk a little bit about that in the next tip. Any things they are prohibited from doing. How they can properly use your promotional materials or your copyrighted materials. Things like that. So that is an important step. And you want to at least get them to either physically sign an agreement or electronically sign, basically acknowledging what the obligations and responsibilities are as an affiliate who participates in your program.

Okay, tip number three kind of teased this in the last tip, but it’s to require affiliates to make a proper FTC disclosure. Now hopefully, you’ve had a chance to listen to some of the past episodes regarding the FTC. But if you haven’t, or you want to go back and refresh your memory, it’s Episode 42. It was a Legal Quickie called the Four Essential Things the FTC Wants You to Know Before Endorsing a Company’s Products. So I would go ahead and listen to that, as well as Episode 44: The Five Things You Need to Know Before Using Customer Testimonials in your Marketing.

So a lot of these topics we’re going to talk about they kind of mesh together. And so I think those are two great episodes to listen to, to further your understanding of what the FTC is, what it requires and all that good stuff. Now for tip number three, and we got to remember that pursuant to the FTC guidelines, if there’s a connection between an endorser and a marketer that consumers would not expect and it would affect how consumers evaluate that endorsement, that connection needs to be disclosed. So affiliate relationships are just that type of connection. Therefore, all affiliates should disclose their affiliate relationship with you. So your affiliates need to be disclosing that affiliate relationship with you, when they’re promoting those products.

Those disclosures, if you’ve heard the past episodes, you know that they need to be clear and conspicuous. Which means that consumers should be able to notice that disclosure easily. They shouldn’t have to search for it, you know, you shouldn’t be hiding it in footnotes or in blocks of text people aren’t going to read. Basically, they can’t be hard to find or hard to understand. They need to be clear and conspicuous.

Okay. Now according to the FTC, disclosures should also be close to the claims to which they relate in a font that is easy to read in a shade that stands out against the background. For video ads on the screen long enough to be noticed, read and understood. For audio disclosures read at a cadence that is easy for consumers to follow, and in words, consumers will understand.

Okay, so again, go back to those other episodes if you haven’t already. We dive a lot deeper into what all of this really entails. But I want you just to keep in mind that you need to require your affiliates to make a proper FTC disclosure when they are promoting your products.

Tip number four is to educate your affiliates about your products and proper promotional activities. Now, I really recommend that you create some sort of system for educating your affiliates about your company, your products, proper promotional practices, including teaching them about what is considered a proper FTC disclosure. So sometimes well meaning affiliates may forget to properly disclose. They may make unsubstantiated claims about your product. So remember, an affiliate should not make claims about your company or products that you yourself can’t substantiate. Now, there’s so many different ways that you can do this, I’ve seen the whole gamut. Some people set up, you know, a course basically, to walk their affiliates through some of what they need to know, will house all of their documents in there, all the promotional products. You can have a Facebook group. You can have some sort of online training, I mean, if you can just let your creativity run wild here. You can have some sort of manual whatever. Basically, the idea being that I would recommend including some sort of educational component, so your affiliates not only get to know and understand your products and your company, but also to understand how the whole affiliate relationship and promotional activity should go.

And tip number five is to have a system in place to monitor affiliate compliance to your program terms. Consider implementing a system for regularly monitoring and affiliates compliance with the terms of your affiliate program. So that means for instance, are they properly disclosing the affiliate relationship as required by the FTC? Are they for example, properly using your promotional materials in a way that’s not infringing on your copyright or is not a bad reflection on your brand? And in the case of non compliance, I would take measures to remedy that issue or remove the affiliate from the program.

Hopefully, you guys can see now how all of these tips work together. You know, in tip number one, we said screen your affiliates. You know, don’t necessarily go for huge volume go for quality affiliate relationships, because hopefully the idea being that if you create quality relationships, these are the people who are going to be vested in your business and in your brand. And they’re going to properly educate themselves, are going to properly follow the rules. And so having a system in place to monitor them is going to be a lot easier. You’re not going to be having to track and police a whole bunch of people.

There you have it. Those are my five tips to consider before you launch an affiliate program for your products or your services. So with that said, my friend, I am going to sign off here. Now stay tuned, as I mentioned at the top of the episode for all the birthday celebrations coming up, I would love for you to participate and pick the fan favorites coming up in August.

And if you’re interested in the online training, Let’s Get Down to Business: The step-by-step guide to starting your dream business the legal way, you can head on over to my website and get on the waiting list. That’s available at annettestepanian.com/wait. Okay, you guys, I’m going to sign off got to get back to work. It was so great being here. Thank you again as always for listening. I hope you have a fantastic day and I can’t wait to talk to you later.

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