How to Build a Highly Profitable Affiliate Program: Lessons from 15 Years of Experience

Affiliate marketing has been helping entrepreneurs for many years by allowing them to bring in new customers and make more money by promoting other people's products. When it's done well, an affiliate program can be a big factor in helping a business grow steadily, no matter if it's a big company or a small one.

However, starting an affiliate program from scratch and growing it takes time and effort. It's not something that happens quickly. To get advice from an expert, we’ll take tips on how to create an affiliate program from Matt McWilliams, who has been working in affiliate marketing for over 15 years and has a lot of experience in creating successful affiliate programs to promote his businesses.

Matt's journey into this industry started unexpectedly when he discovered something interesting about online marketing while trying to promote his family's golf schools back in the early 2000s. Let's begin there to learn how it all started.

Matt McWilliams

Getting started

When Matt was in his early 20s, he was teaching golf lessons with his father and noticed the untapped potential of internet marketing. He decided to try putting up ads on Google for a low cost of $0.10 per click. Surprisingly, within a short period, their website was attracting 200 visitors every day.

What fascinated Matt the most was the ability to test different variables and see tangible results. He enjoyed experimenting with different ad images and wording, seeing how it affected their conversions. They went from 1 conversion per 250 clicks to 1 per 200 clicks and eventually spent less than $10 per customer.

Although Matt's golf instruction skills weren't exceptional, he became passionate about the process of online testing, learning, and optimizing. He realized he could persuade people who were mildly interested and demonstrate the real value of their offerings. It was a captivating experience for him.

This hands-on experience in online marketing during its early stages shaped Matt's understanding of what leads to success. Importantly, it taught him that people's behaviors could be influenced, a lesson that would prove valuable in affiliate marketing later on.

A memorable start to building an affiliate empire

A few years later, a friend suggested to Matt the idea of starting a lead generation business and incorporating an affiliate program to attract customers. Although he was initially skeptical, Matt eventually agreed to help launch and manage the affiliate program in his spare time.

Over the Memorial Day weekend in 2005, Matt dedicated 18 hours a day for three days to teach himself how to build an affiliate structure from scratch using the limited online resources available at that time. He gathered information from a few blog posts and forum discussions, relying on trial and error to learn.

Within 18 months, that initial test of the affiliate model was generating over $1 million per month in revenue alone. This extraordinary growth was a direct result of Matt's focus on building genuine relationships with affiliates, which was uncommon in affiliate programs at that time.

"We took the time to get to know affiliates as individuals, not just numbers. I made myself easily accessible, providing my cell number for any questions. People want to do business with someone they consider a friend," Matt reflected. This approach brought significant benefits.

Secrets of attracting affiliates from larger competitors

One pivotal moment demonstrated the power of Matt's unconventional relationship approach. A much larger competitor was acquired by a major company, seemingly solidifying their dominance. However, Matt saw an opportunity:

"I realized that if we framed it right, this could work to our advantage. I reached out to all their dissatisfied affiliates with a genuine message, saying things like 'I understand how corporate changes can affect the affiliate experience. Let's talk about how we do things differently.'"

The response Matt received was overwhelming. "Phone call after phone call and email after email flooded in. Within two months, we had reached half a million dollars per month simply by persuading their affiliates to join us through personalized outreach."

Turning a disadvantage into a significant opportunity played a crucial role in the early success of that original program. It demonstrated the importance of truly knowing, understanding, and serving affiliates as real people, rather than just entries on a spreadsheet.

Foundational principles for building any affiliate program

Now let’s dive deeper into Matt’s best practices learned from hands-on experience managing multiple successful programs over 15+ years:

Set fair commission rates: Instead of paying too little to try and make more money, it's better to look at what your competitors are offering. You don't have to pay the most but try to stay in the same range to attract good affiliates.
Personalize the affiliate experience: Affiliates promote products or services to their own audience, so make it easy for them by customizing their affiliate pages with their own colors, style, and branding. This helps build trust and gets more people to buy.
Make use of existing affiliate relationships: The quickest way to get new affiliates is to reach out to ones who are already promoting similar things. You can contact affiliates who are already working with your competitors and see if they want to work with you too.
Keep your initial outreach simple: Long and salesy emails won't get much attention. Keep your first message short and sweet. Ask interesting questions to get a conversation started.
Focus on building real relationships: While the money you offer is important, it's even more important to build a genuine connection with your affiliates. Be responsive to their needs and communicate with them directly. People prefer working with real people, not just businesses.
Keep testing and learning: Take the time to look at the data and see how your affiliates and customers behave. Figure out which affiliates or campaigns are bringing in the most results and learn from them. Use what you learn to make your program better.
Grow gradually by nurturing relationships: It's not realistic to expect your program to make a lot of money right away. It takes time and effort to see progress. Focus on getting your initial affiliates on board and building trust in your target audience. As you gain momentum, your revenue will increase.

How to build an affiliate program — The right way

To properly launch and manage an affiliate program requires both short and long-term planning. Let's unpack how to systematically tackle each stage according to Matt:

1. Upfront setup & preparation (1-2 Months)

Finalize core offer details and documentation
Determine competitive commission structures
Build necessary technical integrations
Design template affiliate pages/banners
Craft targeted promotional copy samples

2. Initial testing & recruitment (2-4 Months)

Profile top 10 prospects from competitor analysis
Personalize outreach highlighting your differences
Have launch calls to address questions/concerns
Activate initial 2-5 “Friends and Family” affiliates
Gradually refine recruitment best practices

3. Early program refinement (4-6 Months)

Notice initial affiliate and buyer behaviors
Make minor commission, technical, or copy tweaks
Find 1-2 new verticals/niches to further test
Recruit 5-10 new affiliates through targeted prospecting
Start measuring affiliate performance data

4. Consistent growth & scaling (6-18+ Months)

Continue refining based on learnings and testing
Formalize incentive/recognition strategies
Launch 2-3 new targeted campaign copies monthly
Optimize top affiliate verticals/products
Gradually recruit 20% more affiliates each quarter
Scale top products and campaigns annually

While this may seem like a major undertaking, breaking it into logical sequential stages makes it very manageable. Most importantly, remember affiliates enhance rather than replace your core business – this is a long-term growth play requiring patience and dedication to see big benefits.

Outcomes from proper execution and long-term commitment

Matt was able to achieve extraordinary outcomes for clients by committing to these best practices over many years versus pursuing quick wins alone. For example:

One program organically grew to over $1 million per month in 18 months solely through affiliates.
Another scaled to 25-30% of a company’s overall revenues at scale annually through affiliates.
In programs Matt has personally run full time himself, affiliates also comprised up to 60% of total income at peak points.

Most importantly, properly nurtured affiliate programs have provided unmatched stability and optionality during uncertain times. As Matt puts it:

“There’s no act of Congress or platform change that can entirely disable an engaged group of affiliates promoting something they truly believe in. It’s a major diversification benefit and lasting growth engine if treated properly as a long game.”

Simply put – for any enterprise willing to commit to the journey, building a thriving affiliate channel through the right people-first approach often delivers outsized, durable rewards over extended periods of dedicated effort.

Final thoughts

Taking the long view remains crucial for maximizing affiliate success according to Matt. While scaling gradually, focus on continuously refining based on evolving data patterns versus pursuing quick wins alone. Also, understand affiliate program value increases exponentially when structured as a true cooperative community over a forced transactional system. Nurturing trusted adviser relationships often comes before chasing short-term dollars alone.

Lastly, affiliates themselves want fulfilling promoter experiences too. Prioritizing common goals like customer satisfaction versus narrow financial quotas fosters true partnerships with scalable benefits for all involved over extended periods of dedicated effort.

For entrepreneurs aligned with this long-term perspective, embracing affiliate marketing through proven best practices can truly become a gift that keeps giving for many business cycles to come. By focusing first on serving others before themselves, affiliate leaders reap valuable rewards in the process of enriching many lives along the journey.