Affiliate marketing can be uniquely effective for B2B companies. Let’s take a look at how B2B affiliate marketing can be profitable. Determining your marketing priorities can be tricky, especially if, like many B2B business owners, you drive sales through both inbound and outbound strategies. Should you prioritize high-cost, mass-marketing outbound strategies like TV ads and billboards? Or should you allocate most of your marketing budget to targeted inbound strategies like social media and content marketing? Ideally, you want to take an approach that combines low-cost marketing programs with a personalized, targeted, and scalable approach. B2B affiliate marketing is the answer. Let’s take a look at what affiliate marketing is, how it works, and how to build a successful B2B affiliate marketing program.

What is B2B Affiliate Marketing?

Business-to-business (B2B) affiliate marketing is a performance-based marketing strategy in which a company or influencer (affiliate) promotes a brand’s products to other companies and receives a commission for doing so. Often, the affiliate is a customer of the brand, but can also be an expert or other influential individual in a particular industry. In this structure, each company compensates the B2B affiliate marketing partner for specific customer actions triggered by the affiliate’s activities, such as visiting a website, making a purchase, or signing a service contract.

Here's how B2B affiliate marketing works:

1. The company specifies the actions it will reward affiliates for. These actions could be existing customers or individual content creators with influence in the industry.

2. Approved affiliates promote the company using their own affiliate links or other affiliate resources, such as brand images and product photos.

3. The Company monitors customer behavior and pays affiliates compensation for such activities (e.g., signing up for a newsletter) in accordance with the program terms.

What is the difference between B2B and B2C affiliate marketing?

Affiliate marketing strategies are popular in both B2B and business-to-consumer (B2C) businesses, and they work similarly in both cases. The main difference between the two is that B2B marketers tailor their affiliate marketing campaigns to other businesses. B2B businesses may use different channels, respond to different types of content, and follow different buying cycles than individual consumers.

“Business-to-business is about the customer needing the product, not because they have an emotional connection to it and want to buy it,” says John Murphy, affiliate marketing expert and owner of The Cold Plunge Store . “The content is often more direct and impactful.”

Benefits of B2B Affiliate Marketing

• Accessibility to specific customer groups
• Increase your potential customers
• Improve your brand reputation

Affiliate marketing is a cost-effective, low-risk strategy that can help you increase site traffic, increase conversion rates, and reduce customer acquisition costs. It can be especially useful for businesses operating in the competitive B2B market. Here are three unique affiliate marketing benefits for B2B businesses:

Accessibility to specific customer groups

B2B companies often target a smaller group of customers than B2C companies, and often struggle to effectively reach these niche consumer segments.

With affiliate marketing, you can work with affiliate marketers who have access to your ideal customer base. And because you only pay when a conversion occurs, you don’t risk wasting your marketing dollars on uninterested customers.

Increase your potential customers

Lead generation is the process of identifying new prospects, gathering information such as email addresses and job titles, and targeting them with sales and marketing materials. Many businesses use costly outbound tactics to contact prospects, and then pass qualified leads to their sales team. You can integrate leads into your existing sales and marketing funnel by setting up a B2B affiliate marketing program. Compared to using costly outbound tactics, leads generated by a B2B affiliate marketing program are more likely to be of higher quality because the companies following the affiliate are already interested in the product or service being promoted. Additionally, your total marketing cost is likely to be lower because you are only paying for the actions you want to take instead of paying up front for actions you don’t want to take.

Improve your brand reputation

The business community is small, so your company’s reputation is very important. Affiliate marketing can help you build your reputation by encouraging referrals within your industry. If you want to improve your brand image, you can design an affiliate marketing program that encourages referrals from current or former customers, or you can focus on recruiting high-value affiliates who have a special impact on your customer base.

B2B Affiliate Marketing Build-out Process

1. Understanding the Buyer's Journey
2. Setting goals
3. Identifying Core Behaviors
4. Developing a Compensation Plan
5. Deciding whether to join an affiliate network
6. Drafting an Affiliate Agreement
7. Choosing Affiliate Management Software
8. Developing a program application
9. Recruiting and screening applicants
10. Affiliate Onboarding
11. Monitor your performance

Starting a new affiliate program is relatively inexpensive. You don’t have to pay upfront to influencers or ad networks, and you don’t have to invest in extensive campaign materials to start marketing your product. Instead, focus on designing a program that fits your needs and choosing the right tools, service providers, and affiliate partners for your business. Here’s how to get started:

1. Understanding the Buyer's Journey

A successful affiliate program is tailored to your unique needs, so it starts with researching your target audience. “You need to know who you’re talking to and why they’re looking for information. If your customers are businesses, their reasons may be different,” says John. Look closely at your insights into the B2B buyer journey, such as how customers make purchasing decisions, what types of information they need to convert, and how and where they research your products. Use this information to design your program later. For example, many B2B customers expect personalized attention from their sales reps, which can help them build a customized product or service package. If so, you can focus your affiliate marketing efforts on getting more customers through the sales funnel, rather than generating direct conversions.

2. Setting goals

Next, set goals for your affiliate campaigns and identify key performance indicators (KPIs) for each goal. For example, you might aim to generate 50 new leads through your affiliate program during Q3, or increase site traffic by 20% by the end of the year, with affiliate traffic accounting for at least 30% of your overall traffic by that date. You can use these affiliate-specific KPIs, along with your buyer journey research, to identify the goals that are most likely to align with your larger business goals. For example, if your customers need access to educational materials to convert, you might aim for 20 new signups per month for email marketing campaigns attributed to affiliate sources.

3. Identifying Core Behaviors

Not all affiliate programs reward the same behaviors, so decide which customer behaviors you want to reward your affiliates for. Common examples include:

• Click on a site or landing page
• conversion
• Sign up for our newsletter
• Submit Contact Form
• Software Installation
• Download Resources
• Request a sales call
• Call or email the company
• Lead Qualifications

Choose the actions that fit your goals and KPIs, but remember that you don’t have to pay for every metric you track. Your decision will depend on the size of your affiliate marketing budget and the value each action brings to your business. For example, if you’re tracking site visits, you might pay for website clicks, or you might pay for higher-value activities like filling out a contact form or making a purchase. If you have a limited budget or aren’t confident in driving site visitors through your marketing funnel, you can start by paying only for sales conversions. You can adjust your compensation model later as you learn more about how your referrals interact with your business.

4. Developing a Compensation Plan

Rates vary widely across industries, so consider competitive analysis to understand how other companies in the market compensate their affiliate partners. Typically, affiliates earn between 10 cents and $1 per site click, $5 to $100 per lead, and 5% to 25% of the total sale value as a commission. B2B companies can also use hybrid models to reduce the risk associated with paying affiliates for actions that don’t directly generate revenue. For example, they can pay a low flat rate for new leads and then offer a higher commission when the leads eventually convert.

5. Decide whether to join an affiliate network

Next, decide whether to join an affiliate marketing network, a service that helps businesses recruit and manage affiliate marketers. Affiliate networks typically charge a membership fee and either a monthly minimum fee or a per-transaction fee. Whether an affiliate marketing program is right for your business will depend on your budget, the number of affiliate partners you want to pursue, and the types of affiliates you want to recruit. If you operate in a niche industry with few active affiliates, an affiliate marketing network may not have access to the affiliates that are best suited for your business. Instead, you may choose to recruit and manage a small number of affiliates yourself. If you operate in a more popular niche, such as financial services, you may want to leverage an affiliate network to quickly access a group of qualified participants and reduce the cost of managing a large cohort of affiliates.

Research the best affiliate networks that fit your budget, industry, and goals. Look for networks that offer all the tools you need to manage your program, such as recruiting automation, performance monitoring software, on-platform payment options, and legal support.

6. Drafting an Affiliate Agreement

An affiliate agreement is a legal document that begins the relationship between an affiliate and a business. It can help protect your business from affiliate fraud by clarifying the terms of your participation.

Many affiliate networks provide a standard contract, so if you’re signed up with a network, you can modify the template to fit your needs. Alternatively, you can consult legal sources or hire a lawyer to write one yourself. Here are some things to include:

• Compensation Structure and Rates: Specify which customer actions you will reward your affiliates for and how much you will pay for each action.
• Payment Schedule: Specifies how often you will pay your affiliates.
• Trademark Rules: Specifies when and how affiliates may use trademarks or other advertising materials associated with your brand.
• Prohibited Tactics or Marketing Channels: Include a list of prohibited activities, such as posting discount codes on coupon aggregation sites, sending spam emails, or running paid advertisements, and specify where the content should not be posted.
• Federal Trade Commission (FTC) Disclosure Requirements: The FTC requires affiliates to disclose their relationship with a company in content that recommends or reviews a company's products, unless the content is clearly a paid advertisement.
• Grounds for Termination: Many agreements state that the company may terminate the affiliate relationship at its discretion, and may list specific actions that may constitute grounds for termination.

7. Choose an affiliate management software

If you decide to join an affiliate marketing network, you can skip this step. Most affiliate networks offer performance monitoring tools. If you don’t join a network or the network doesn’t offer affiliate management software, choose an affiliate management tool. Look for one that integrates with your online store, supports a planned commission structure, offers robust reporting options, and makes it easy to pay your affiliates. Some affiliate management software companies even include fraud detection features and automated recruiting and payment features, which can be especially valuable if you plan to recruit a large cohort of affiliates.

If you plan to reward affiliates for conversions, pay special attention to ensuring that your cookie window option matches your sales cycle. The cookie window determines how long it can take for a customer to convert after they first visit your site, before your software recognizes that action and associates it with the referring affiliate.

8. Developing a program application

If you have joined an affiliate marketing network, this step is optional. Most affiliate networks pre-screen their affiliate members, and many even structure their programs to automatically enroll interested affiliates.

If you want more control over your affiliate group or run your own program, ask affiliates to submit their company’s legal name, contact information, and social media handles on the application. You can also ask affiliates to describe their brand, product, or affiliate marketing business philosophy to better gauge their alignment with your brand.

9. Recruiting and screening affiliates

Many affiliate marketing networks offer built-in recruiting tools, so if you’re signed up to their network, promote your program and recruit affiliates from your affiliate dashboard. If you run your own program, share the application on your company website and social media feeds. You can use search engines or social media platforms to identify key people in your industry and invite them to apply for your business. Consider your current customer base, too. They are likely already familiar with your product or service and have professional connections with other potential affiliates.

Once applications are received, we will review them and prioritize affiliates who have created high-quality content and have proven authority in their target market. This is a sign that the affiliate has the ability to generate high-quality leads for your business. Be on the lookout for signs of fraudulent applications, such as a limited online presence or recently created social media profiles.

10. Affiliate Onboarding

Collect signed affiliate agreements and set up new affiliate partners in your affiliate management system. Collect payment information, provide access to marketing assets, and ensure affiliates know how to contact you (or your affiliate manager) if issues arise.

Since many affiliate programs accept new applicants on a regular basis, consider automating your onboarding process to reduce administrative tasks. With an automated onboarding process, you can design an affiliate onboarding nurturing cycle and use your affiliate management software or email service provider (e.g., Shopify Email) to send key onboarding messages at set intervals or in response to specific affiliate actions.

11. Monitor your performance

Once your program is up and running, use management software to evaluate the success of your affiliate program, measure return on investment (ROI), and monitor for signs of fraud. Affiliate performance data is a valuable source of customer information. You can use it to optimize your affiliate campaigns, as well as improve other marketing initiatives. For example, if your affiliate-generated sales qualified leads (SQLs) are converting at an unusually low rate, you can adjust your lead qualification criteria to only pay for customers who are more likely to convert.

You can also use information about which marketing channels are bringing you the best leads to plan your brand's next affiliate outreach campaign.