256. How to Turn Affiliate and Ambassador Programs Into a Real Growth Channel

0:00Foodbevy:Welcome to Startup to Scale, a podcast by Foodbevy. I'm your host, Jordan Buckner. Join me as I talk to aspiring entrepreneurs, seasoned industry experts, and everyone in between as we unlock the keys to growing from startup to scale.

0:18Foodbevy:Affiliate marketing has quietly become one of the most powerful growth channels for modern brands. So instead of paying up front for ads or partnering with large creators, communities, and publishers who promote those products, you can actually find a lot more affiliates, usually in like the small to medium size. You can still do this with the larger ones, but publishers who are then promoting your products and earn a commission when sales happen. And this is really powerful for emerging brands, especially in the CPG world, that can help unlock new audiences and really build trust through those authentic recommendations.

0:52Foodbevy:So today I want to talk with David Abbey, who's the founder of InList, to break down how affiliate marketing actually works, why it's growing quickly, and how founders can start building their affiliate program to drive real results. David, welcome today.

1:07David Abbey:Thank you very much, sir. Pleasure to be here.

1:09Foodbevy:So I think, you know, affiliate marketing, influencer marketing, UGC content has just been like in the atmosphere for a number of years. There have been brands who have tried it. Some have had success. Some have not. And I want to talk today really to like break down what makes a really good program and how to actually use this to scale your business. And so maybe just to open up, I'd love for you just to describe like what is affiliate marketing? Is it different from influencer marketing? and what the world looks like.

1:41David Abbey:Yeah, that's actually a great place to start. I think that the term influencer marketing has just become marketing. And I think the term influencer marketing is a pretty large umbrella. And in there, you've got creators. I like to think them as everyone is a creator because they're creating some sort of content. I like to think about influencers as people who are getting paid. And you said that in your introduction, it's like a paid campaign or I'm paying Jordan$1 ,000 in video. Whereas an affiliate is someone who's going to be really happy to represent your brand because A, they love it. B, they get commissions.

2:16David Abbey:And C, they get gifted products. And in that, right, they're all creators. Influencers are 250 ,000, 300 ,000, 500 ,000 followers. You're going to have to pay them to play. It's our 150, 100 and even less that are just excited to be working with your brand. And then the other term that kind of gets interchanged in there is an ambassador. An ambassador program is a collection of affiliates and brands can have 500 affiliates and four influencers or 40 influencers and one affiliate. And it's again, it's what's going to make it work really well for your brand. But that's that's the nomenclature. And that's kind of who's who in the zoo as you think about it.

2:57Foodbevy:Yeah, you know, I like to think, too, a lot of times when at least I think about influencer marketing, it's about awareness and visibility, whereas affiliate is more around how can I incentivize and drive sales and get actual customers, right? And so there's different roles that they play. I think for a lot of smaller brands, they're like, I just need revenue. If views bring revenue, great. If someone's selling, it brings revenue, great. But I think as you're kind of thinking about the larger marketing flow from how someone understands and hears about your brand, right? A lot of times it goes from awareness to someone considering your product, actually making the decision point and what's going to get them to order.

3:37Foodbevy:And there's different types of content and different types of relationships and offers and deals and things that come into play as you're kind of moving throughout that sales and marketing funnel.

3:46David Abbey:I completely agree with you there. And just to add, there's been, I'd say, a bigger shift in the last two years of more and more brands actually going towards an affiliate and going towards those micro nano because they're relatable. And if I follow someone, say, Jordan, you've got two million followers and you're like, oh, it's so hot. I love this Stanley. I know you're getting paid. I know that you're getting thousands of dollars for that video. Whereas if you're a friend of mine and you just happen to have a link to it, I'm more inclined to buy from you. And that's a very big difference. And a very important one you said there is affiliates are really focused on revenue.

4:20David Abbey:Influencer paid campaigns are focused on awareness, likes and engagement. I think there's a big difference there.

4:26Foodbevy:So I know a lot of brands have tried some version of influencers and affiliates. But as you've been working with brands, how do you think about setting up goals for what the program should accomplish? is it setting like revenue marks is it setting certain numbers of creators like how do you think about like getting started and what's going to do for you and your business well i think the first

4:50David Abbey:thing out of the gate is like what are you doing what is your strategy are you going for awareness you want to be a household name and then you're going to go paid or are you trying to build a program that is really like an always-on revenue engine and those aren't the same thing and if you go into this being like i'm going to try to do both or you're going to fail spectacularly whereas if you can build a really good ambassador program and be like, I'm going for an always on revenue engine, orders are going to be coming in. The byproduct of that is a community. It is UGC, and it is your brand continually getting in front of more and more people, just under the size and scale of someone big.

5:28David Abbey:Once you're like, okay, I'm going to, you know, I'm a DTC brand. I mean, I'm wearing a built hoodie. It is like a very great example of a DTC brand. They're like, look, I'm going to get, I want to build up to a hundred ambassadors. The 80-20 rule is probably going to apply. So once I know what I'm going to do, then it's figuring out like, what do my ambassadors look like? And it's not necessarily a follower count. I think the one word that I would say is critical is alignment. When people like, if someone's comes in and they say, I've tried affiliate influencer before and it didn't work. My first guess is who were the people?

6:04David Abbey:Were they aligned with your brand? Did they make content that kind of resonates with you and it kind of, you know, really compliments your brand? And is their audience the right people? I don't want to, you know, be a jerk in saying this, but chances are if you've tried it and it failed, that's probably it. And so you're like, okay, I'm going to build an always on revenue channel over the next, you know, three to six months. I want to build up to a hundred ambassadors. I want them all to, if I'm a healthy lifestyle, I want fitness content. I want regular posting. I want like sunshine and outdoors and like this.

6:37David Abbey:And once you figure out what that is, then you can start to then build the structure into your program. But that's the that's the core of it all from the beginning.

6:44Foodbevy:And then just in terms of expectations, right? Like a lot of people watching this, they're probably under five, 10 million dollars in revenue. And they're like, OK, how much is this affiliate channel reasonably going to build for me? If I'm thinking revenue, is it dollars a year, kind of additional revenue directly from the program knowing it has these other halo benefits or can this get to like a hundred thousand dollar program of course it depends on like the brand but like for those who are just kind of starting out with this that maybe like don't they're not household names already kind of what what can they

7:17David Abbey:that's a question that's a very very similar to like how long is a piece of rope i've seen wildly successful programs and it the ones that are the most successful are aligned from a brand to a greater. They're one and the same. They're lockstep. The most successful programs that we see on our platform, they've brands have, you know, 500, 750 ambassadors and they're doing about$100 ,000 a month. And that is in commissions. So that is they're paying people after the sales have come in. But you should also understand this isn't going to be an overnight success. Like the days of a product going viral on TikTok, I think are kind of gone.

7:52David Abbey:So it's about building up a steady thing. So it's like, what am I going to do in my first 30 days? I'm going to get a handful of people. I'm, you know, you're gifting product and you're going to start to see a little bit of traction. You're going to see UGC start to surface and organic. And then, you know, first 30 days, next 60 days. Now you're going to start to see who's going to perform. So some people that are actually going to work up a little bit and then you can actually start breaking them into tiers and then be like, hey, these are my stars. I'm going to give them a little bit more commission.

8:20David Abbey:I'm going to restock them with more product so that they can continually create UGC. They're continually getting my brand in front of their audience. and then you get into 90 days. Now you might even have taken some of those VIPs and move them into a paid tier where you're boosting their content. And now you're going to start to see the engine run. And I don't want to give you a dollar figure because it'd be very different if you had a$15 product versus a$100 product. But the point is that if your cost of acquisition based on a commission rate and a discount is less than your other ad spend, if your gifting ROI is positive, Like I'm giving Jordan a product and he's getting two sales.

8:58David Abbey:And if your conversion on the website is strong, those are the metrics that are going to be more important in the early days. Then I made a hundred thousand dollars because you're like, look, I got started out with five people. I got to 20. Now I got 50. I've got some really good people. I'm boosting the content. And just for anyone listening to this, if you're taking someone's piece of content and you're going to put some ad dollars behind it, the industry standard is 10 % of the ad spend. So it's like if it's$1 ,000 ad spend, you're giving them$100. They're going to be pumped. So now you're like, okay, I've got great.

9:29David Abbey:My cost of acquisition, I'm getting a solid gifting ROI. My conversion is there. My organic content is there. I'm boosting it. Now in those 90 days, now you've got a little bit of an engine running. And then you can start to duplicate the process. And then you'll start to get your$1 ,000,$5 ,000,$10 ,000 a month. And your goal at the end of this is to be a predictable revenue channel. You're like, I know if I spend X on meta ads, I expect this. And I know if I have 100 people and, you know, I'm giving away this much product per month, I should be in this small part.

9:59Foodbevy:I think that's a good way of thinking about it because I feel like when most people fail, it's because they are thinking about this one-off kind of gifting instead of building relationships over time. And so talk to me about like, we kind of touched on it. Like, what's that ultimate vision for these affiliates? Is it like someone who's getting your product, like using it every week, every month over the whole year? Like for those VIP customers, they're like actually people who like love your product and they're just sharing about organically.

10:25David Abbey:Yeah. So again, the best ones that I see, A, they're passionate about your product. They love your product. They're super happy to get in there. It's a little bit different. Of course, if it is a physical good, you don't need to send me a new Stanley every month. I'm sure my wife and my daughters would appreciate it, but I'm good. But if it is a consumable product, the best thing you can do is always make sure that they have product available to create content. I mean, the other one that's just really pulls people in close is like, hey, Jordan, we're exploring some new flavors. Can I get some feedback from you?

10:56David Abbey:Or we're launching and only my VIPs get to launch with this product. You can reward these people in different ways without it just being monetary. That actually goes a really long way. Even on the monetary side, think about a super simple tier structure. My base tier, everybody gets 10 % commission. My middle tier, everybody gets 15. My VIP tier, everybody gets 20. And then I've got some people that just outperform everything. I'll get them 25 because the amount of new customers they're bringing me is totally worth it. And their content is like you. And you're like, hey, you know, we really appreciate everything you've done.

11:31David Abbey:Moving into tier number two. In tier two, you get a t-shirt. You get monthly or products restocked. You get more commission. You get to, you know, be involved in the flavor counts. I don't know. But things that don't cost you money, but really start to strengthen that community. And those are all the things that start with just like, what is my plan? Who do the people look like? And then what do I want to build it on?

11:53Foodbevy:I love that. And, you know, I think as you're kind of building out this program, I like that idea. You know, having a goal of creating a base, right? Maybe it's building 50 affiliates over your first 30, 60, 90 days to have that strong base to then see who are the people that are going to perform, who are the people who love your product. And knowing that not everyone will love it and want to use it and feel natural talking about it, others are too. So let's talk through how to actually find those people who love it. I don't know, like in my mind, I see it as maybe two overlapping Venn diagrams on one side.

12:33Foodbevy:It's like people who are good at storytelling and selling. And then there's people who are good at who actually like love your product. And it's finding that overlap in the middle, right?

12:42David Abbey:You're close. And there might even be a three or four sided Venn diagram there. And I'll talk a little bit about Endless on this one specifically, because we see it coming a few different ways. If your brand that does have some social engagement already, your warmest market are people that are already tagging you. And in the Endless product, when you sign up, you type her in, you know, Ed Built. Let's pretend. And then we actually will pull up a social feed of everyone that is tagging your brand over the last three months. So the moment you sign in, you're like, oh, here's X number of people. And you click on the report.

13:15David Abbey:And then one of the features that everybody loves in Endless is we have what's called the performance report. So now I got everything about Jordan. And I've got his engagement, his authenticity, his growth rate, his hashtags, his people that look like him. I've got his audience breakdown and I got all his content. I'm like, Jordan is already a customer of mine. He's already talking about my brand. He's already tried my products. I'm going to message him. Hey, Jordan, it's David from Built. You know, we'd love to have you in our ambassador program. One word, one keyword I might highly recommend when you're first starting and you are engaging a warm group.

13:47David Abbey:We would love you to be a founding ambassador. You're just adding one little founding word there.

13:53Foodbevy:That really makes people feel super special.

13:55David Abbey:And it's such an easy one. So there's your warm market. I've seen brands do it really well, both in-store and online, is putting it on your receipt. Whether it's a Shopify thing that comes or if it's even in-store, you know, hey, we're starting an ambassador program. You can apply here. In Endless, we have our application form. You can fill it all out. And when someone applies, you can ask some personal questions like, are you a customer? Do you do this? to do that. But you also, again, get that performance report. So even before you're approving them, you're saying, hey, if I'm going to give Jordan some free products, because there is a cost to get associated to that.

14:29David Abbey:Does that work? So this is a way for you to capture warm people in two different ways. So that's inbound and warm. On the outbound, thinking about just someone who's totally cold, there's two channels. One, you can use that listening feed again, but put in a hashtag, hashtag healthy meals. It's a pretty common one in the food baby world. Now here's a list of absolutely everybody using the hashtag healthy meals. Hey, Jordan, it's David. I saw that post he put up with hashtag healthy meals. I'm from blah, blah, blah brand. I really like your content. I'm starting an ambassador program. Would you be interested in a conversation about being a founding ambassador?

15:05David Abbey:Jordan's going to get that email. That was cool. On the other side of that, we have a discover feed where I type in a bunch of filters. So I'm looking for people that like healthy lifestyle that have this many followers that live here and do all these things. and it'll give me this monster list. And sometimes it can be thousands. And then you start building your list and then you actually start doing outbound like sales. It's the exact same thing. And that's how you start. But the other thing is that is then going to compound. So you say you get 10 people, you give them a product, they all make content.

15:35David Abbey:The thing is influencers follow influencers who follow influencers. And all of a sudden I see that, you know, this person's talking about this brand and I'm like, those products look really cool. And then I go here. What is the first thing I'm going to do? go to their website and see if there's an ambassador link in the bottom of their website, and I'm going to apply. And now you actually start to take your customers who are already talking about the product, who are actually pulling in other people. And again, it's this flywheel, and it doesn't happen overnight. It could take 30 days, it could take 60 days, it could take 90 days.

16:02David Abbey:But once all those things are running, that's how you start scaling your product and start scaling that revenue.

16:08Foodbevy:I love that. Have you found any insights on finding people who make good affiliates? So in terms of who have actually a good conversion rate of like at least sending people to your website, right? Like it's up to you to make sure your website is actually converting those people. But have you found any ways of filtering people who are good at like who have an engaged audience who want to listen to them?

16:30David Abbey:It's hard to say that, but I would go back to that word. That one word I said earlier, alignment, right? If like Ketone IQ is a product that I absolutely love, right? I think it's arguably one of the best supplement products out there. If I was following a creator who was not a fitness person and was like, yeah, Ketone IQ, I'd be like, what is this? Versus Ketone IQ, it's performance, right? All of their creators are fitness. They're like, look, when I'm working out and I'm tired and I don't have time to go to a meal, I take a shot of Ketone IQ. I'm like, huh, I resonate with that problem. And I think that's an important piece.

17:08David Abbey:And that's where if people just spray and pray invites and gifting all over the internet, you're going to find like, oh, I gave away 40 gifts and only one person sold something. I'd be like, what would you give the gifts to? And it does take a little bit of extra effort, but it's worth its weight in gold when that engine starts running. So that would be the thing is when you're in, when you're reviewing someone, if you want to work with them, go look at their content and see. it's kind of like a very nice visual resume. Would my brand fit with this person? Does my product fit with their lifestyle?