Going from $0 to $1M a Month with an Affiliate Program with Matt McWilliams

0:02Who's ready to rock today, Fire Nation? JLD here and welcome to Entrepreneurs on Fire, brought to you by the HubSpot Podcast Network, the audio destination for business professionals with great shows like Billion Dollar Moves. Today, we'll be breaking down how to go from zero to$1 million a month with an affiliate marketing program. To drop these value bombs, I brought to Matt McWilliams and to EO Fire Studios. Award-winning affiliate manager Matt has worked with Tony Robbins, Dean Graciosi, Lewis Howes, Michael Hyatt, and Jeff Walker to run their affiliate programs and coach their affiliate teams.

0:33In today's foundation, We'll talk about what an affiliate program is and why we need one. We'll talk about getting our first 20 affiliates by stealing our competitors and how to get affiliates motivated to sell more and so much more. And a big thank you for sponsoring today's episode goes to Matt and our sponsors. Hustle and Flowchart, hosted by Joe Feer, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Join Joe as he discusses systems, mindset tweaks, reframes, and strategies to help you build a business that gives you freedom and fuel for your life.

1:03A recent episode on using AI for effortless content creation is a must listen. Listen to Hustle and Flowchart wherever you get your podcasts. Want to meet me, JLD, in person? Attend Clay Clark's two-day interactive business workshop and meet me, Tim Tebow, and Clay Clark this June. Experience the highest rated business workshop in America and hang out with me in person at thrivetimeshow.com slash EOfire. Again, that's thrivetimeshow.com slash EO fire. Learn more and request your tickets at thrivetimeshow.com slash EO fire. Matt, say what's up to fire nation and share something that you believe about becoming successful that most people disagree with.

1:43Oh, what's up fire nation? Uh, that's a great question, John. I I'd say probably the biggest thing that I've learned that I've come to believe is, um, that it really, it isn't like, you don't need more information. You don't need to know how to do things. You just need to surround yourself with the right people. And like you and I were just talking about privately, sometimes it's a good thing to be the dumbest person in the room. Fire Nation, if you can look around and say, I'm the dumbest person in the room, that's a great thing. Because guess what? I end every single one of these episodes by saying you're the average of the five people you spend the most time with.

2:16And guess what that means? Your average is going through the roof when you're the dumbest person in the room. So going from$0 to a million dollars a month with an affiliate program, that's what we're focusing on here today. But first off, Matt, what the heck is an affiliate program and why the heck do we need one? I mean, at its core, the concept's been around for 5 ,000 years, John. I mean, if you think about it, you know, 3 ,000 BC, I don't know many Roman names from 3 ,000 BC, but, you know, two Roman dudes are walking down the street in their togas, I presume, And one of them's hungry. And the other one says, let's go to a deli.

2:53I'll introduce the owner. And when he brings him in and introduces this guy to, you know, this potential customer, the owner's like, Hey, you, I'm going to give you a free sandwich, right? That that's affiliate marketing. You know, all we've done in the last 30, 35 years is add technology to it. The concept's been around, you know, for again, thousands and thousands of years. And when I look back when I, you know, I'm kind of a dinosaur in the industry, this is my 19th year in the affiliate marketing industry. And when I started my first affiliate program in 2005, we started out of desperation.

3:22You know, we were broke. We literally couldn't make payroll. And, you know, to answer the question, like, why do you need one of me for us? There were four huge advantages for a company in our position, but they're still true today. And these helped us go from basically broke, can't make payroll in a week to we were running over a million dollar a month affiliate program. And the first, you know, first reason you make money before you spend it. Most of us aren't starting a business. with a million dollars in the bank. You know, we're bootstrapping it. And with an affiliate program, you only pay for performance.

3:54The second thing is, you know, there's no guessing at targeting. You know, back in 2005, we didn't have Facebook. There was no targeting. It was like the wild, wild west. But even today with, you know, with Facebook and like all the, you know, targeting and marketing, you know, psychographics, demographics, all this stuff, like we can cripple ourselves. And I typically see, you know, my friends and my clients and make one of two mistakes. First of all, they target too broadly. And I often say when you try to target everyone, you're targeting no one. Secondly, they can get so myopic. They're like, okay, we're going to target only men who are 31 to 33 years old.

4:26They have three kids. They homeschool in their favorite football teams in the NFC West. You know, like it just doesn't work. With affiliates, you don't have to worry about the targeting. The third big reason why you need one is like no other form of advertising brings in warmer prospects than affiliates. Very simply put, your affiliates, you do affiliate marketing, you know, JLD. And when you say, hey, Fire Nation, I recommend this product, they are warmed up. They are on fire to potentially buy that product. No Facebook ad could possibly do what a third-party endorsement does. And that's why no other form of advertising converts clicks into leads and leads into sales as highly as affiliate traffic does.

5:04And the fourth reason is success leads to more success. Affiliates talk. They're in masterminds together. They follow each other online. And so what we found is that when we actively recruit 100 affiliates, we'll get another 40 to 100 for free just as a result with no extra effort. Fire Nation, think of the last 10 movies that you were really excited to see. I can almost promise you that five to eight of those movies was because you were really excited because a really good friend of yours, somebody you really knew, liked, and trusted a lot and respected said, this movie's awesome. Matt, John, you've got to see this movie.

5:44It was unbelievable. When I hear that from somebody that I know, like, and trust from a friend of mine, I'm like, I gotta go. I gotta go. Like, I remember when Top Gun Maverick came out, my friends were like, oh my God, it was unbelievable. And like, I was like, oh, it's probably going to be good. But I went and saw it the next day because I was like, man, that is the best. And so that's what Matt is saying. Like when, you know, I'm saying Fire Nation, like this is a great course, a great product, a great service. There's a lot higher likelihood that you're going to get excited about it because, you know, you've been listening to me for potentially 10 hours, 100 hours, a thousand hours, a million hours, who knows.

6:15But guess what? You know, like, and trust me to a level more than just some random thing or some random person you heard off the street who might recommend something. You're like, well, I don't know that person from Adam. So how do I even know if I can get excited about that? Now, there are lies that most people believe about affiliates. What are they? I mean, the first big one is that they don't need an affiliate program. You know, we, we just, I don't need an affiliate program. Like I can do everything on Facebook. I can do LinkedIn. We all know a friend though, who's had their Facebook account shut down for weeks or had their ads account shut down for months.

6:49And, you know, we say it's not going to happen to me, but it happened to them and it could happen to you. And so I'm not one of those people who says all of your growth should be through an affiliate program. All of your sales should come from the affiliate program, but 20, 30, 40, maybe 50 % should. And it's a way to diversify, you know, ultimately we'll talk about this later, I'm sure. But like the biggest thing is it's people who have your audience that are then recommending you. You have a certain level, you have entrepreneurs, in your audience. So when a product comes along that is great for entrepreneurs, you know, you're doing your audience a service by promoting it.

7:25And the merchant of the owner of that product is making money. So that's the first one is I don't need an affiliate program. The second one is, you know, if you're going to grow an affiliate program, you got to know a lot of people. You got to be one of the cool kids, right? You got to have all the connections or you, or you have to do a lot of reciprocal promos, which means I'm only going to, you know, get an affiliate if I promote them. And, you know, when I started my first business, like I talked about earlier, I mean, we were broke, but we didn't know, I didn't know anybody. None of us knew anybody.

7:53Like we weren't the cool kids. We didn't have dads who knew all the right people. We started with nothing in about 18 months. We were doing a million dollars a month. And I'm sure we'll talk about this in a bit, but like you can get affiliates, even if you don't know anybody in your niche. And then the third big lie is that most of your sales are going to come from only a few affiliates. And I remember, um, about four or five years ago, I was sitting at a conference with a big internet marketer, you know, somebody like every listener has heard of this guy. And he said, as a statement of fact, he said, and I wrote down the exact quote, we'll never forget.

8:25He said, 90 % of your sales will come from your top three to five affiliates. That is simply not true. And in fact, that person eventually became a client because he saw how we were running affiliate programs where that wasn't true. It just doesn't work. It's not possible to scale with that attitude. If 90 % of your sales are coming from a handful of people, you're not going to scale. I mean, if you look at the affiliate programs that we run, just one example, this is one you were a part of a while back, JLD. Michael Hyatt's five days to your best year ever. This was five, six years ago. The top three affiliates only accounted for 14 % of sales.

9:00Wow. The top 10 only accounted for a quarter of sales. We had over 500 affiliates making at least one sale. So this is the big lie that holds a lot of people back. They think that most of their sales should come from that top three to five. It's just simply not true. Now, I do want to move on to that point of where would a person start? How can we get our first 20 affiliates? And I kind of like this little teaser that I actually mentioned in the intro as well by stealing our competitors' affiliates. What does that even mean? Yeah. I mean, when I first built my first affiliate program, like I said earlier, we didn't know anybody.

9:34I had no connections. So I did the only thing I knew how. I asked myself this question, and this is the question to ask yourself when looking for affiliates. Who has my audience? Who already has my audience? And so at that time, you know, again, this is 2005 and this is still true today. The only place I knew that absolutely had my audience and they knew affiliate marketing was our, was our competent, well, actually our, our competitors affiliates. And, and so this is the best place to look for affiliates. And so I started going out and I would look at like, who's promoting our competition. And I found a few people and they were small, but we'll talk about why small affiliates are so awesome.

10:17like, you know, they were making a couple hundred bucks a week and they were making us a couple hundred bucks a week, but I went out and got them. And then I got a few more. And the next thing, you know, we're doing$10 ,000, you know, a week after about four or five months. Hey, that's pretty cool. You know, for a startup, like we're making money, we're profitable. We can pay our team. That was nice. Uh, we weren't taking out loans, you know, we're going bankrupt. And then about the four or five month mark, we had our biggest competitor, like the company was doing a hundred million dollars a month, literally, um, or a hundred million dollars a year, sorry, from, from, you know, affiliates and overall, um, they got bought by a publicly traded company and suddenly they had more money than they knew what to do with.

10:58And we, of course, were like, we're devastated. Like we're doom and gloom, right? We're thinking now they can, they can, they can run us into the ground on pay-per-click. They can pay their affiliates more than we can pay. And they only have to do that for six months to put us out of business. You know, they can operate at a loss for six months. That's how big companies, by the way, if you don't know this. That's how big companies put little companies out of business is they either drive the price low or they drive the cost high for a short period of time and they bankrupt the little guy. And so we're like, what the heck are we going to do?

11:28So for about a week, I moped around. I was depressed. You know, I basically just assumed we were going to be at a business in a year, updating my resume, you know, thinking about what kind of business I could start next. And, you know, we're all entrepreneurs tend to have their best ideas, right? The bathroom. I'm in the bathroom and it hit me. I was like, wait a minute. What if I reached out to all of our competitions, all of this company's affiliates? And I said, Hey, you may have heard that they were bought by the biggest, you know, publicly or by this huge publicly traded company. They have more money than they know what to do with.

12:00They're the big, they're the big dog right now. But here's what I've heard about that company. They treat their affiliates like a number, not a person. And so I literally wrote this email to these affiliates and I said, you know, basically what I just said. And I said, as a matter of fact, I want to develop a relationship with you. Here's my personal cell phone number. Give me a call. Text me anytime. And over the next six months, we went from a$40 ,000 a month affiliate program to 70 to 120. About another year later, you know, we were over a million dollars a month and it all came from finding, basically just taking our competitors affiliates, finding that angle to differentiate ourselves.

12:36We would fly them into Nashville and I'd wine and dine them. And we'd hang out with them and do the things that that company wasn't willing to do because they were so corporate. And we stole a good, you know, for us, it was huge. A million dollars a month was huge. For that program, it was one-tenth of their affiliate. It's not a big deal. But for us, it was huge. Fire Nation, whenever there's change, there's opportunity. And that's what you need to identify is what's the void that opened up? What's the opportunity that opened up with this change? It might seem like it's this devastating hit to whatever you're doing.

13:07It could be the opposite. You could flip it on his head. And I think that was a great example. And we have a lot more to talk about around this topic. When we get back from thanking our sponsors, the amount of software required to run a growing business can be daunting. And how do you even know if you're using the right tools? There's help desk software, payment software, email marketing tools, blogging tools, SEO tools. Well, I've got some great news for you, Fire Nation. You don't need more tools to get more out of your business. You just need HubSpot. Their all-on-one customer platform is a dream come true for every member of your team.

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15:25Now we're back. And there's this phrase that I think maybe you even coined affiliate army. So what is an affiliate army and how the heck do we build one? I want one. It's exactly what it sounds like. It's an army of evangelists all talking about you. I mean, if you look at, um, you know, when we ran Shutterfly's program, we took them from about 15 ,000 affiliates to over half a million affiliates. When I ran Adidas's, we took them from about 50 ,000 to again, about 600, 700 ,000 affiliates. It's, it's truly an army of evangelists praising your product, your service, whatever, and just talking about you to their audience.

15:59And you think, okay, that's Shutterfly and Adidas. And yeah, that's great. When you work with companies like that, that's different. But even, you know, small companies, like I said, Michael Hyatt, and we had over 500 affiliates make a sale in a month. You know, we had thousands of affiliates with, we'll talk about some other ones, you know, Ray Edwards, this is another one you were a part of GLD. We had the top three only accounted for 19 % of sales. Only a third of the sales came from the top 10 because we had an army. And number one, I mean, you're not putting all of your eggs in a few baskets.

16:30You know, that's the big thing is you're just not putting all of your eggs in one basket. The other thing is like, a lot of people think, well, I don't want to work with these small affiliates. Like they're only going to make like one sale a year or, you know, two, three sales a year, maybe no sales in their first few months. Like, why would I work with those people? It seems like a lot of effort for very little return. Very simple reason. Those affiliates grow. When you help somebody out, you know, all of us started somewhere. JLD, at some point, your first podcast probably didn't have hundreds of thousands of downloads.

16:59And if somebody came along on episode five and said, Hey, JLD, Fire Nation, I want you to promote this and they treated you like you are now. They treated you like somebody important. They, they helped you. They held your hand and explained it because you didn't know what the heck affiliate marketing was. And they explained it to you. And they, again, they got on a phone call with you and spent 30 minutes, which to them at the time might seem like a waste of time. Like this entrepreneurs on fire podcast, probably is never going to have more than a couple thousand listeners, whatever. Right? No, but they treat you like somebody who could be big.

17:30What, what are you to them? Five, 10 years later? Loyal. You're loyal. You're loyal. And then, so here's what happens when you help a hundred small affiliates, you have a hundred small affiliates, 80 of them a year later are going to be about the same size, maybe 10 % bigger, not a big deal. Right. But five or 10 of them are going to be 20 times bigger. One of them is going to end up on Oprah or the equivalent in, you know, in our world of their world of Oprah, right? They're going to have half a million followers. I'm working with one of our clients right now. She's a, how do I describe this?

18:01Um, she's the, the world's leading colonel rectal surgeon, you know, like, yeah, that, that you can just picture what she does. No, thanks. It's a load of crap. Anyway, um, she, she went, I mean, she started like, you know, four months ago went from basically having no Instagram following to over a hundred thousand followers. And what do you think she's going to do with those hundred thousand followers? You know, she's going to be loyal to the people who supported her on day one. And so some of these people are going to grow and they're going to remain loyal to you and they're going to promote you year after year until kingdom come.

18:34And that's why you want to build that army. Fire Nation, whenever people say to me, John, like, how do you decide which podcast you're going to be a guest on? Like, how do I make sure it's worth it? Like, how do I qualify how many listeners they have? I say, don't waste your time because guess what? They might be massive in a year. They might not be, but they might be. So I just say yes to everybody. I do have parameters. I give them a booking link and I say, Hey, these are the parameters of me being a guest on your show, but I don't qualify. And some of the shows I've been on have not even launched.

19:03The episode never saw the light of day. I don't care because that's just going to happen. Some of the episodes launched and maybe a couple hundred listens, but every now and then a certain percentage blew up. And now I'm one of the first guests on their show. And because of that, I got amazing exposure. It made it all worthwhile. It's like the whole angel investing thing. People invest in 40 companies hoping to get one or two Uber type investments like those unicorns, they call them. So let's be honest. Affiliates are only as good as their sales numbers. So how do we get our affiliates motivated to sell more?

19:38This is like the secret sauce for our agency and for what I've done over the years is just taking an affiliate who maybe without some help would have done, you know, three sales and getting them to do 10 or 20. You know, there's so much info out there on this. Like you can Google it. How do I motivate affiliates? There's no shortage of answers. The problem I found when I Google it, cause I Google it from time to time. I ask chat GPT, you know, every few months, cause this is my, this is my jam, right? This is what I do. Like I'm looking, is there something new that I haven't tried? The reality is like most of the stuff's just kind of like the same generic stuff over and over again.

20:13And so what we found, um, as we've studied it over the last 19 years, is there are five ways to motivate affiliates that work across niches. They work across affiliate program sizes. I mean, I've done like entire hour-long podcast episodes on one of these, but just to give you kind of like the 30 ,000-foot view, the first one is co-branding. I call this just that one extra little step, like adding something to a landing page specifically for the affiliate. So like I'll mention a URL in a little bit for John and, and it's going to have some EO fire branding on it. Just adding that, like even just saying, welcome EO fire listeners, like that little addition that you take as an affiliate program, creating a graphic or a custom coupon code.

20:58Like if you sell a product, here's a tip for every guest that's ever on EO fire, have a coupon code that says EO fire. If you're selling something for Pete's sake. So, you know, like that just makes all the sense of that little extra step can increase sales dramatically. The second one is, and it makes the affiliate want to promote it more. That's the other big thing. Secondly is training. You know, I mean, like getting the affiliates to buy in and teaching them how to sell more. Like, for example, we trained Jeff Walker's affiliates, you know, a couple of years ago. Basically, we showed him how to go from five sales to 10.

21:30You know, we weren't training the guys who were already making a hundred sales and you know, five sales to 10 whoop-de-doo, right? One affiliate makes five more sales. Is that really that much of a needle mover on a program of Jeff size? It is when you multiply it across a hundred affiliates. It's a big freaking deal. You know, it's a million dollars in extra in sales. And so training the affiliates. The third thing is developing a community of affiliates. It works because you end up on a mission. The community becomes about a mission. Um, yeah, I can introduce competition, which works in most niches.

22:03Like you get a little bit of trash talking. I know you've done it. Like I'm in the affiliate groups with you. And when you're like ahead of one affiliate, you talk a little smack, right? That's what we do. We egg each other on, but we also share what works and we encourage each other. and the fourth thing that really moves the needle is just creating time-bound events whether it's launches summits challenges a promo a webinar something that like you know if you think about like a movie launch like you talked about movies earlier and one of the reasons why we get swept up in movie mania is because it feels like it's everywhere for a week or two it's not everywhere for six months but for a week or two it's the thing maverick topcon maverick was the thing for two weeks.