300: How to Start Your Affiliate Marketing Program - with Joran Hofman

EPISODE SUMMARY

In the latest episode of "Scale Your SaaS," host and B2B SaaS Sales Coach Matt Wolach sat down with Joran Hofman, founder, and CEO of Reditus, a dynamic affiliate management software tailored for SaaS businesses. Hofman shares his expertise on affiliate marketing and how it can elevate your B2B SaaS business.

Hofman highlights the challenges he faced in managing affiliate programs and the need for a better solution, which led him to founding Reditus. The platform focuses on empowering SaaS companies by providing insights into effective affiliate recruitment, filtering, and communication. 

Read more to find out how you can build an effective affiliate marketing program for your business, too.

PODCAST-AT-A-GLANCE

Podcast: Scale Your SaaS with Matt Wolach

Episode: Episode No. 300, “How to Start Your Affiliate Marketing Program - with Joran Hofman”

Guest: Joran Hofman, Founder & CEO of Reditus

Host: Matt Wolach, a B2B SaaS Sales Coach, Entrepreneur, and Investor

Sponsored by: Leadfeeder

TOP TIPS FROM THIS EPISODE

• Understand Affiliate Marketing
• Build a Strong Affiliate Program
• Challenges in Setting Up Affiliate Programs
• Nurture Affiliate Relationships

EPISODE HIGHLIGHTS

• The Growth Journey of Reditus
• Advice for Early-Stage SaaS Leaders

TOP QUOTES

Joran Hofman

[07:30] "Get the foundations in order. Make sure your website is converting well."

[15:20] "Engaging affiliates is really important. Have proper resources in place."

[21:30] "Don't start [affiliate marketing] unless you have 10k monthly recurring revenue or unless your clients are really asking for it."

Matt Wolach

[08:11] "Start with your current network. Invite your current network; they know the value of your product."

[05:56] "The affiliates go out and do the work for you and it kind of makes your sales and marketing arm much bigger."

LEARN MORE

To learn more about Reditus, visit: https://www.getreditus.com/?gr_pk=EmM&gr_uid=VDYR 

You can also find Joran Hofman on LinkedIn: https://www.linkedin.com/in/b2b-saas-growth/ 

For more about how Matt Wolach helps software companies achieve maximum growth, visit https://mattwolach.com.

Visit our sponsor: https://www.leadfeeder.com/ 

Get even more tips by following Matt elsewhere:

• Sales Tips
• LinkedIn
• Twitter
• Instagram

Transcript

Matt Wolach: 0:07

And welcome to Scale Your SaaS very glad that you're here. Thanks for being here. By the way, if you are new to the show, our goal is to do exactly what the name says scale your SaaS, we're going to teach you how to generate a bunch of leads, how to close those leads, how to scale your team, all of that fun stuff. And if you are new, definitely subscribe to the show. That way, you'll be able to get weekly updates from some of the best in the world. Some of these people who know how to do this, they're gonna share all their advice with you. And today, one of those best in the world is with us. I've got Joran Hofman with me. Joran, how're you doing?

Joran Hofman: 0:39

I'm doing good. Doing good. Thank you, Matt.

Matt Wolach: 0:41

Awesome. Yeah, absolutely. I'm so glad that you here. Let me make sure everybody knows who you are. So Joren, he's the founder and CEO at Reditus. And basically what that is, that's a dynamic affiliate management software that's tailored for SaaS businesses dedicated to elevating B2B SaaS through a robust network of over 50 affiliate programs, Reditus empowers your programs growth, unlocking new avenues to recurring revenue exclusively B2B SaaS companies. He's also a growth mentor. So absolutely, this guy knows his stuff. And I'm so glad he's here with us. Joran, thanks for coming on the show.

Joran Hofman: 1:14

Thank you for having me, Matt. Like I'm happy to be here.

Matt Wolach: 1:17

Absolutely. So tell me what have you been working on lately? And what's coming up?

Joran Hofman: 1:21

Yeah, we've been working on lately. So as you mentioned, we're an affiliate management platform. So we help SaaS companies to set up an affiliate program. But I think the biggest challenges a sales company always has is to find the right affiliates. So if you're asking what have we been working on next is basically giving SaaS companies insight is in who are good affiliates be able to filter on them, search them and contact them all from one single place. Like that's what's coming up soon.

Matt Wolach: 1:50

I love it. What made you start Reditus? Where did that come from?

Joran Hofman: 1:53

I was working at a company I was head of CS there had a lot of calls with clients. And I always got the question like, this is a great tool. Which tools? Should I use more? When you do five to 10 demos a day, you get sick of that question. So I decided to build a website, it's called salesofmarketing.co still live doesn't do much at the moment anymore. But in the high days, it had 25,000 Organic visitors per month. And I had like 220 tools on there, which are recommended as the best sales or marketing tools to use with that traffic. My idea was, I'm going to lay on the beach somewhere and make money by referring them with affiliate links, didn't really work out, found out that I had to log into all these different portals all the time, because the SaaS company set up an affiliate program on this separate domain, we have to log in separately. And at one point, you stopped doing that. And then these bigger networks, like I just didn't trust the data, which was in there. So at one point, I didn't make money. And I thought this can be better. So I ended up building a network myself, basically.

Matt Wolach: 3:00

I love it. Those are the best stories of startups is when you're trying to do something yourself. You can't find any solution out there. So you go on create the best thing. And it just turns out that that best thing for you also happens to be a great thing for other people as well. I think that's so fantastic. And what you are talking about affiliate marketing, can you explain to us for some of those of us who don't use affiliate marketing or don't know exactly what it is? What exactly is that?

Joran Hofman: 3:26

Yeah. So it's basically, as you can call it like an indirect marketing channel. So what a lot of SaaS companies do is you have your ideal customer profile to find your ICP, you go out there, either organic paid ads, events or anything like that, you try to contact your ICP directly. With affiliate marketing, It's an indirect marketing channel, which basically means is there going to be somebody in between you and your ICP could be an agency, a blogger, an influencer, a publisher, anybody who has access to your ICP in bulk, ideally, you ask them to start promoting you. If they do, and people sign up and they start a paid plan for your SaaS, then you're going to give them a kickback fee in return. So it basically means that you would only pay these people the affiliates if they deliver you paid client and then you agree a certain percentage with them. So let's say you're gonna give them 20% for 12 months for the clients they've been bringing on

Matt Wolach: 4:25

I love it and it's something that's that's really powerful yet not a lot of software companies use this this it seems like it's very, you know, consumer products. Obviously, you can sign up to be an affiliate for like Amazon and start recommending books and tell people follow this link and go buy the book and you get some money, but I feel like it's underutilized within B2B SaaS, so I'm glad, but what made you say I want to tailor this approach for B2B SaaS companies?

Joran Hofman: 4:52

We do it purely for B2B SaaS, I guess for a really specific reason as in that I've been with my website as well been doing some Like affiliate marketing, for books on Amazon, for example, it's like one off, it's $20. You maybe get like $1 in commission doesn't really move the needle, right? So if you go to b2b SaaS, it basically means it's higher ticket prices, because it's business to business software, which means it's also going to be higher commissions and is recurring. So it's also money we recurring commission. So whenever a SaaS company comes on board with us, we ask them, how much percentage do you want to give away and for how long, which basically means is an affiliate can earn a lot more than referring B2C. And I think that in B2C as well, because there's like, there's not a sign up, there's not a free trial, like, there's a lot of fraud going on there. And it's harder to track that. And within b2b SaaS, it's a lot easier to track. So that's also one of the reasons why I purely focus on on b2b SaaS, but the main reason higher recurring commissions.

Matt Wolach: 5:56

Yeah, that makes a ton of sense. And I love that from the SaaS leaders perspective, as you get all these extra opportunities and extra deals coming in that, you know, initially do a lot of work building the affiliate program, but then the affiliates go out and do the work for you kind of it kind of makes your your sales and marketing arm much bigger, doesn't it?

Joran Hofman: 6:16

yeah. Because in the end, you have like an army of people recommending you. So it's, it's kinda like comparing it to SEO, it takes a lot of time to set it up properly, it takes a lot of time to scale it, but once it's running, it's going to drive consistent revenue for yourself. And that's kind of what happens with affiliate marketing as well.

Matt Wolach: 6:35

I love it. I think it's fantastic. So tell me, what are some of the best strategies that software leaders are using in order to build strong affiliate programs for themselves?

Joran Hofman: 6:43

yeah. So like, first of all, it's not a setup and forget or laid back kind of channel. So I think when you look at strategies, like, it may be really obvious, but you have to spend the time into it, I guess. So what that kind of means is like, get the foundations in order. So if you're going to start asking somebody else to recommend you make sure that your website is converting really well, you know, your conversion rates, like those kinds of basic things, you have best practices, you have case studies. So you kinda have to sell yourself first before you can even ask somebody else to sell for you, right? So nobody's gonna recommend a restaurant was just opened, nobody has ever eaten there, you want to recommend something that you truly believe in. And that's what affiliates want to do as well. Then if you got I guess, like the foundation in order, it also means you have current users. So your current network, like start there, invite your current network, they know the value of your product, they know exactly what you do, they know exactly how to use you. So from there, it's easy for them to start recommending you. And I think that the biggest thing, where you can make a difference is start actively recruiting affiliates. There's a lot of strategies out there. But like, the biggest one is, of course, the listing articles. Like you always think like the best, top 10 CRM tools is always based on the actual best top 10. That's not the case, you're gonna be a number one, for example, if you even pay like an upfront fee, or you give away commission to the blogger who wrote the article. So that's one way of getting yourself into listing articles. And another way is to recruit, for example, competitor affiliates. So probably everybody uses to like SEMrush, or ahrefs do a backlink analysis of your competitors, look who's referring to them with an affiliate link and start recruiting them as well, because in the end, they might have those blocked, whatever, recommend multiple tools. So it's an easy addition to add you because they already wrote content about the topic you want to be listed in. And they already know the concept of affiliate marketing. So it's a really easy sell. So recruitment is definitely a big one as well. And then, I mean, it's a bit of a promo, but leverage a network like ours, for example, where you can tap into already existing affiliates within a network, which is going to help you forward as well.

Matt Wolach: 9:10

I love that tell me more about that network. Because that's something obviously that a lot of people can see as a big benefit if you don't want to spend a lot of time creating a network and trying to go out and find it. How do you guys help with that?

Joran Hofman: 9:21

Yeah, so like, we're the only ones right now we have a freemium model. And it's like our growth lever as well. So for example, any SaaS company can set up an affiliate program with us for free, there's no hidden cost at all. But what we do say then is you have to invite the affiliate yourself. So whenever SaaS companies set up an affiliate program with us, they find the affiliates they come into the network. And then the affiliates who log in can basically see a marketplace of offerings from B2B SaaS companies who have an affiliate program and then from there they can decide to apply and then you can accept or decline it based on The data we provide your data provided you basically so at the moment, we have around 8000 B2B SaaS affiliates in the network, that's when this podcast is going out, but like at the end of 2024, we expect to have like 25,000 - 30,000 B2B SaaS affiliates in our network. And this is also one of the reasons why we're now building a two sided marketplace where we allow SaaS companies to filter church and contact those affiliates. And we're gonna provide them with first party data, like having affiliates connecting Google Analytics, social profiles. So that's the biggest challenge. Can you actually trust the person on the other side? And do they have the traffic they say they have?

Matt Wolach: 10:46

I think that's a big one, me as a as a leader of a software company, and somebody says, hey, I can promote this. I would want to know, like, actually, would that work? And if I actually go through the effort of spending time getting you set up, are you going to actually deliver anything? Right?

Joran Hofman: 11:02

Yeah. And that's where a network can help because, for example, now, in our case, as well, if somebody applies to your program, we would just give you a textual information. So you have to trust the person. I mean, I trust people, I trust data more. So that's why we're going to have them connect things. But we also can show you what have they've been doing for other companies in the network. And if there's a fraud as affiliate, there may be already other SaaS companies marked them as as fraud, which makes it easy for us to spot them, kick them out. And go forward. So you don't have to figure everything out yourself. If you're leveraging the network, basically.

Matt Wolach: 11:39

Yeah, that makes it really, really easy. So okay, so what challenges are b2b SaaS companies facing what, what are they seeing? When they try to set up an affiliate marketing program? What are they running into?

Joran Hofman: 11:52

Yeah, so I've mentioned, I mean, we're really, at the moment, the only one as far as I know, who offer like a freemium model as we do with a network. So I think like, if you're gonna go for the bigger networks, you're gonna come up with high upfront fees. Like, that's definitely one challenge you're gonna get. But if we go past that, I think that the biggest challenge is always the recruitment and the activation of the affiliates and the recruitment being the hardest. I've been doing it myself for some of our clients. And like, It's time consuming. And it's hard to find the right affiliates. And then once you get in contact, you often have to negotiate deals, because you want to get the bigger ones in, but they want to have upfront fees or special deals, things like that. So recruitment is, is hard. And then, as mentioned, like the trust is all also tricky, like, is this person actually who they say they are? Do they have the website they say they have? Do have the traffic they say they have? Are they going to deliver whatever they've been already doing? So I think that is the biggest challenge. Right now. We're setting up an affiliate program is easy. But getting the affiliate getting the right affiliates in? That's the that's the hardest part.

Matt Wolach: 13:01

Yeah, definitely. And what about once you've gotten them? Is there, is there work on going to try and make sure they continue to send stuff and kind of develop that relationship further?

Joran Hofman: 13:12

Yeah, yeah. So I mean, it's like, the real 20-80 rule, like 20% of your affiliates will probably drive 80% of the revenue or the traffic. So like engaging them is going to be really important. So I would always recommend, first of all, have like proper resources in place. So think about it in a way where if you get the affiliation, what do you want them to do? How would you want them to promote you? And are you able to deliver, give them all the resources they need to actually do so? So if you want them to add banners on the website, can you already provide them if you want them to write content, can you provide them as much content as possible, so it makes it easy for them to start recommending you? You almost kind of want to do the work for them. Because then there's no friction, they have the network you're looking for, they have the traffic you're looking for. And then from there, you can build a relationship, because the more frequently you add, I guess, for them to figure out who you are what you can offer, how can they sell you then the less likely they are going to do something and it's the metric you're always using Seismographic time to value, like the affiliates want to make money quickly. And once they started making money, they're more likely to keep referring you so help them to get their first money and so let them know what other affiliates have been doing. Let them know what is working and then from there, educate them on how to actually sell you. You really have to help them to make money and of course they're making you money. But if you think of it like that, how can I help my affiliate to make money and you're going to be better as

Matt Wolach: 14:53

I love that. kind of you're coaching them on using well. the best practices that others have used to sell your products. You're almost kind of almost training your your sales arm essentially, it's not a direct salesperson, their indirect it's a third party. But nonetheless you're kind of bringing them up to speed and making sure they understand fully how to get you out there and how to sell you. And that's how you can have the best market right and best network.

Joran Hofman: 15:19

Yeah, yeah, it's like almost getting an army of salespeople out there and you just have to educate them probably in bulk, like he can't jump on calls with everybody, they probably don't want to do either. So make sure you set up like an onboarding sequence, kind of like you have for your app, and make sure that you educate them against the value they're trying to achieve, which is making money.

Matt Wolach: 15:41

I love that. So with your own company getting this set up, I mean, Reditus you've done really well. But how did you get some of your early customers? How did you convince people in the beginning to start with you?

Joran Hofman: 15:51

Yeah, I mean, we're a marketplace, so the beginning, I think is always the hardest part. So what we did was I love it. And then now that you're more in your growth an AppSumo launch. So we did it a couple years back now already, where we just launched on AppSumo, to get like, first the SaaS offering side in there. And then from there, they started to invite affiliates. And then now we're at a good point where we have a nice combination. But that was the way where we got our first users in as a marketplace, I, it would have taken us a lot longer if we haven't done that. I don't know if I would do it again, if I started another SaaS. But for us, that was a good way to get the first users in. phase, so what are some of the plans that you have for Reditus as in terms of expanding and growing this platform? we've been fully focusing on organic channels. So I run for example, my own podcast as well, where you're going to be soon on like we do our SEO, really active on LinkedIn, kind of purely focused on that, on our own affiliate Marketing Channels as well, of course. We have our own program. But I think like as soon as we launched the marketplace, we will start experimenting with paid ads cold outreach, but last year, December, so it was 2022, we ran into a lot of bugs, we ran into a lot of issues with scaling, basically. So we ended up revamping the product for six months getting the basics back in order. Yeah, like at one point, we didn't know why a bug was happening, like a button didn't work. But we didn't know if it was the back end, or the front end code was all mixed up. So we separated them completely. So it's now really nice, and my developers are really happy. We did a product launch in June, we got product out today. And after that the growth finally kicked in how I wanted. So now we can get like the final foundation in order. And then like we need to get our conversion rates in order, we need to make sure that we can actually track certain things. And after that, we're going to scale with other things like paid ads, etc. Like that's going to be our next step for growth.

Matt Wolach: 18:10

Good for you for realizing you needed to kind of refactor the site and the app and kind of get back to something that was going to be really helpful. That's a hard decision, because it feels like you're kind of going backwards, but it allows you to accelerate. So kudos on doing that.

Joran Hofman: 18:24

Yeah, it's a painful decision. Because like, basically, you're putting your MRR (Monthly Recurring Revenue) Almost on pause, like you have your clients you might have secure and you might have some new clients coming in. But you know, that the app you're working with, I mean, people were happier, like the, we saw more of the issues than the users experience, but we knew this was needed. And if we didn't do it back then then it's just gonna create so many bigger issues later on.

Matt Wolach: 18:49

Yeah, yeah, for sure. And I also like what you said earlier, I hope everybody picked up on it, you're using marketing channels now and you're trying to refine them and get better at them. And you mentioned your podcast, let's plug plug the podcast, what's the name of it,

Joran Hofman: 19:03

Grow your B2B SaaS,

Matt Wolach: 19:05

Grow your B2B SaaS, perfect. So exactly like what we're trying to do here as well. So I know that some of the people he's had on the show there are great. So definitely go check that podcast out as well. But I love that you're really making sure that each of these channels works. And then like you said, once that happens, now you're going to add a channel. Now we get that right now we're going to add a channel that you said, we're going to start doing this. And you start creating all of these different ways for people to find you. And it starts to really ramp up the lead generation, but you're making sure you've optimized the ones you have first. And what you said earlier kind of touches this as well. You're making sure your conversion is working. You're making sure the website is good. You're making sure and by the way, this is something I work on with my clients as well. Those of you who've been clients, those of you thinking about is when we look at, hey, if you're going to start ramping up marketing, let's make sure we can actually close those leads that we generate. We're going to put money and effort into marketing. Let's make Sure are closing process is fantastic. So we feel good about putting that money and effort into the marketing. I love that you said that earlier. Just wanted to highlight that. But I totally agree with all that Joran.

Joran Hofman: 20:10

yeah, I think I mean, like, personally, we're still bootstrapped. But I think once we're bigger than, like getting somebody like yourself and getting the foundation in order, I think it's crucial before you even start putting money in paid ads or bigger, I guess, like, marketing resources.

Matt Wolach: 20:29

Yeah exactly. And just like your inset, if you want to do that, call me. Nice plug. Thanks Joran, I appreciate it. No, but Okay, so if somebody is a software leader, they're kind of early stage and they feel like we need an affiliate program. What advice would you have for them as they get that started?

Joran Hofman: 20:50

Yeah, so I mean, if their earliest stage, I kind of say, like, don't start unless you have 10k monthly recurring revenue with an affiliate program or unless, like, your clients really are asking for it. Because I think the most common mistakes people think is that it's a way to get your first clients in, as mentioned, like get your foundation in order, like, are you going to recommend a SaaS company where you know that they don't have any clients, and you're not actually sure if they can deliver what they say they are. And they haven't sold themselves, like, probably not. And also don't think it's like a magical bullet, like, again, compared to SEO, it takes time. And it takes effort. So when we do say, Okay, we're gonna get started, then make sure you pick out the right tool, because it's like, almost like picking a CRM system, you're not going to switch, because the affiliates are gonna get onboarded, they're gonna get their links to kind of put them out there. So it's hard to switch later on. So make sure you make I guess, like an educated decision where you're going to go for. And again, I mean, I'm really biased. But I would always go for a tool which has a network, just because you can grow outside of your own network. Because if you're going to work in a silo, as I always call it, you have to do all the work yourself. And at one point, like you're, if you are growing it, you're going to be exhausted from your network. So make sure that piece is in place within the tool you're going to choose. And, yeah, make sure you have time for it to actually grow it. Educate the affiliates, make sure you have the resources available. So whenever you did, for example, paid ads yourself, you have looked at your conversion rates, hopefully, you have resources, which you used, you know, which keywords are working, you know, that things have been converting or not. So you know, your conversion rate. So if you have done, I guess, like some of these things yourself, it's gonna be a lot easier to start a channel like affiliate marketing.

Matt Wolach: 22:47

Yeah, that's awesome advice. I hope everybody was taking notes there. And Joran this has been really, really awesome. I want to make sure everybody knows if they need to set that network up. How did they get in touch with you? Or Reditus how can they learn more?

Joran Hofman: 23:00

I mean, there's only one Joran Hofman on LinkedIn. So that's going to be easy. And otherwise, just go to getreditus.com. There's live chat support on the site. I'm even behind there as well. So you can just you can just

Matt Wolach: 23:13

Perfect. We'll put all that into the show notes. So contact me there. if you're listening, make sure you check that out. And you can go see Joran and Reditus and make sure you're getting your affiliate marketing all set up. He's Joran Hoffman, it's Reditus the company Thank you very much for coming on the show Joran. Thank you for having me, Matt. Yeah, absolutely. And everybody else out there. Thank you for being there. By the way, we are asking for reviews. If you are thinking that this is helpful. If you think that your liking scale your SaaS, please give us a review. I'd really appreciate it that will show other people that this is something that can help them as well. So you're doing a service for everybody. But thank you for being here, and we'll see you next time. Take care