Introduction to Affiliates and Partners
- Alex Hormozi introduces the topic of affiliates and partners in the context of promoting his book.
- He outlines the discussion points for the episode, including choosing the right affiliates, crafting offers, and maintaining affiliate relationships.
- Alex mentions his experience with over $75 million in sales without direct advertising, emphasizing the power of affiliate marketing.
Million dollar leads audiobook podcast collaboration self licking Ice Cream cone, me working with me handshaking myself, promoting this book for free on my podcast. And so if me being an affiliate of myself, today we talk about affiliates and partners.
This quote sets the stage for the podcast episode, highlighting the self-promotional aspect and the upcoming discussion on affiliate marketing strategies.
Prestige Labs Launch Experience
- Alex Hormozi shares his anxieties and uncertainties before the launch of Prestige Labs.
- He describes the extensive preparation, financial investment, and inventory procurement for the launch.
- The initial sales were disappointing, but a sudden surge in the fourth week dramatically increased revenue.
- The affiliate marketing strategy was successful, with affiliates driving all sales without paid ads or sales teams.
Affiliates and partners nothing makes friends like money December 1, 2018 I had no idea how the prestige Labs launch would go.
This quote reflects Alex's uncertainty about the launch of Prestige Labs and the role of affiliates and partners in its eventual success.
The Power of Affiliate Marketing
- Affiliates are independent businesses that promote your products to their audience for commissions or incentives.
- Recruiting affiliates can significantly scale a business by adding multiple streams of leads and customers.
- Alex contrasts two scenarios to demonstrate the high leverage of affiliate marketing over direct sales.
- He shares a real-world example of his software company, Allen, which scaled to $1.7 million per month through a tiered affiliate structure.
An affiliate is a lead getter. They are an independent business that tells their audience to buy your stuff.
This quote explains the fundamental role of an affiliate as a source of leads and sales for a business.
Building an Affiliate Army in Six Steps
- Alex outlines a six-step process for building an effective affiliate program.
- The steps include identifying ideal affiliates, making them an offer, qualifying them, determining compensation, getting them to advertise, and keeping them advertising.
- He emphasizes the importance of understanding where your potential affiliates are and what businesses have your ideal leads.
How to build an affiliate army in six steps.
This quote introduces the structured approach to creating a successful affiliate program, which Alex will detail in the following sections.
Step One: Find Your Ideal Affiliate
- The ideal affiliate should have a warm audience that matches your customer profile.
- Businesses should create a list of potential affiliates by considering what their best customers buy and which businesses serve them.
- Alex suggests using categories like software, equipment, services, and events to organize potential affiliates.
In a nutshell, who's got my leads?
This quote encapsulates the central question in identifying potential affiliates: which businesses already have the leads that you want to reach?
Step Two: Make Them an Offer
- Affiliates need a compelling offer to sign up, which typically involves a new revenue stream for them.
- The offer should clearly call out to potential affiliates and highlight the value of promoting your product.
- Alex advises structuring the offer to show how affiliates can make more money and get more leads.
We make the affiliate offer and advertise it the same way we would any other offer.
This quote underscores the importance of treating affiliate recruitment like customer acquisition, with a clear and appealing offer.
Step Three: Qualify Them
- To convert potential affiliates into actual affiliates, they must understand and agree to your terms.
- Alex recommends setting terms that encourage affiliates to invest time, money, or effort into the product.
- The qualification process is designed to ensure affiliates are committed and ready to succeed quickly.
Potential affiliates become actual affiliates when they understand and agree to your terms.
This quote highlights the transition from potential to actual affiliates, which hinges on their acceptance of your program's terms.
Make Them a Customer
- The concept revolves around incentivizing affiliates to invest in the product they are promoting.
- Affiliates should buy and use the product to maintain their status.
- A direct correlation is observed between the affiliate's investment in the product and their earnings.
- It is suggested that affiliates who do not believe in the product enough to buy it should not be selling it.
- Bulk purchases can increase the money made per affiliate and encourage commitment.
- Prestige Labs saw success with affiliates buying large packages, which led to better follow-through and increased earnings.
- Offering different bundles can be effective, and a minimum purchase requirement can lead to affiliates purchasing more than the minimum.
"nine times out of ten, if they pay, they'll pay attention."
This quote highlights the principle that financial investment leads to greater attention and commitment from affiliates.
"Make them buy and preferably use the product to keep affiliate status."
This quote emphasizes the importance of affiliates being users of the product to enhance their credibility and commitment.
"Pro tip bulk purchases if you need to make more money per affiliate, you can require them to buy it in bulk."
This quote suggests that bulk purchases can be a strategy to increase affiliate investment and, consequently, their performance and earnings.
Make Them an Expert
- Affiliates should pay for onboarding and training, which certifies them as product experts.
- The cost of certification can be covered by the purchase of the product.
- Certification ensures affiliates are knowledgeable and covers the cost of advertising.
- Proper onboarding and training are made possible by charging for certification.
- The recommended charge for onboarding and training is 10-20% of the average affiliate's first-year earnings.
- The right charge amount balances getting affiliates invested without deterring too many from signing up.
- This strategy can be adapted for companies just starting out or those with physical products.
"I make them pay for the onboarding and training that certifies them as a product expert."
This quote explains that affiliates should financially invest in their own training and certification to become knowledgeable about the product.
"If you have them buy a product to become an affiliate, you can have them use that as a credit toward certification."
This quote suggests a method to integrate the cost of the product into the certification process, adding value to the affiliate's initial purchase.
What to Pay Affiliates
- Getting affiliates bought in is the first problem to solve, but keeping them bought in is the second.
- Affiliates should be rewarded with money and free stuff, especially if they first generate income.
- Payment is determined by what the affiliate is expected to do and the maximum allowable cost to acquire a customer (CAC).
- Affiliates can be paid for attracting new customers and retaining them over time.
- Paying for pre-customer actions like leads or appointments is possible if these are known to turn into sales.
- The maximum allowable CAC should guide affiliate payment, ensuring the business maintains a healthy profit margin.
- A three-tier payout structure can incentivize different levels of affiliate performance and optimize overall payout costs.
- Rewarding top-performing affiliates with the full CAC while paying lower tiers less can increase the business's profit margin.
- Paying with products is a cost-effective strategy, as affiliates value the product at retail price, but it costs the business less.
- Sales tiers can be established to reward affiliates with product or credit, with the option of monetary compensation at higher volumes.
- Prestige Labs used the "sell three, get it free" approach, rewarding affiliates with free products for maintaining a certain sales level.
"I prefer to reward people that do things I like with money and free stuff, especially if they make me money first."
This quote underscores the philosophy of incentivizing affiliates with rewards that align with the company's goals and their contribution to revenue.
"I suggest paying affiliates based on your maximum allowable cost to acquire a customer."
This quote details the strategy of determining affiliate payment based on the calculated cost the company can afford to spend on acquiring a new customer.
Get Them Advertising
- Affiliates should be treated like customers, with the value they receive from the company influencing their advertising efforts.
- Launches can be an effective way to activate affiliates and generate excitement.
- The "whisper to shout" method is a launch strategy that builds anticipation and engagement over time.
- Good launches require preparatory work to enable affiliates to easily participate.
- The whisper phase should pique curiosity without revealing too much about the product.
- The tease phase satisfies the curiosity built during the whisper phase and reveals the product and launch date.
- Launches are not exclusive to affiliates but are especially effective for activating them.
"When I figure out ways to pay affiliates, I look at two basic things. One, what they get paid for. Two, how much they get paid."
This quote outlines the two fundamental considerations when deciding on an affiliate payment structure: the actions that warrant payment and the amount of payment.
"Action step make your affiliates customers, experts, or both, which is my favorite way."
This quote provides a direct action step, suggesting that making affiliates into customers and experts is a preferred method for engaging them.
Book Advertising and Launch Strategy
- Alex Hormozi discusses his approach to advertising and launching a book.
- Emphasizes on creating anticipation and interest over time, starting with a whisper and building up to a shout.
- Highlights the importance of providing clear calls to action and leveraging bonuses, scarcity, urgency, and guarantees to drive sales.
- Uses the metaphor of movie release strategies to illustrate the effectiveness of this gradual buildup of promotional intensity.
"I started advertising how the book satisfied the dream of limitless leads, of doing less work and getting it done faster than they could imagine."
This quote explains the initial advertising strategy for the book, focusing on the value proposition of achieving more with less effort, which is an enticing offer for potential readers.
"Action Step start teasing once per week until 14 days out. Then tease twice per week until three days out."
This quote outlines a specific promotional timeline, suggesting a gradual increase in marketing efforts as the launch date approaches.
Action Steps and Pro Tips for Book Launch
- Provides a detailed action plan for the days leading up to the product launch.
- Recommends increasing the frequency of promotional messages as the launch date nears.
- Suggests mimicking movie release strategies to create a sense of anticipation and excitement.
- Encourages the involvement of affiliates in the promotion process to expand reach and engagement.
"Three days out is time to shout from the rooftops. Shout. Think. Call to action."
This quote signifies the critical phase of promotion just before the launch, emphasizing the need for loud and clear marketing messages.
"Pro Tip: Movie releases the best real world example of Whisper to Shout is movie releases."
This pro tip draws a parallel between the book launch strategy and the film industry's approach to marketing, suggesting that the gradual build-up of excitement is a proven method for attracting an audience.
Affiliate Marketing and Integration Strategies
- Alex Hormozi shares three methods for integrating products with affiliate offers to maintain advertising and lead generation.
- Explains how affiliates can enhance their own offerings by including or selling the lead magnets and core offers of another business.
- Discusses the benefits of white labeling lead magnets for affiliates to provide immediate value and generate leads.
- Stresses the importance of making affiliate offers attractive and beneficial for the affiliates to ensure long-term collaboration and lead flow.
"Integration gets us there. I've got three ways you can integrate your product into their offer."
This quote introduces the concept of integration as a key strategy for sustaining affiliate marketing efforts.
"Pro Tip: white label lead magnets one of my favorite strategies is to let them use the lead magnets I've already made for my audience for theirs."
The pro tip here suggests a practical approach to affiliate marketing by allowing affiliates to rebrand existing lead magnets, saving time and resources while maximizing lead generation.
Real-Life Case Studies
- Alex Hormozi presents three case studies from different industries to illustrate the application of the strategies discussed.
- Each case study demonstrates how businesses can use affiliate partnerships to expand their customer base and increase sales without significant advertising costs.
- The examples include a tax preparation service, a supplement company, and chiropractic services, each leveraging affiliate strategies tailored to their industry and audience.
"Three case studies you can model service business. Case study number one, national tax preparation services."
This quote introduces the first of three case studies, providing real-world context for the strategies discussed earlier.
"Physical products case study number two Prestige Labs, my supplement company."
Here, Alex Hormozi shares a case study from his own experience with a supplement company, showing the practical application of the affiliate marketing strategies he advocates.
"Local business case study number three chiropractors."
The final case study focuses on local businesses, specifically chiropractors, and how they can use affiliate strategies to attract new patients, demonstrating the versatility of the approach across various business types.
Workshop Collaboration and Affiliate Strategy
- Gym owners can host workshops for chiropractors, charging attendees and splitting profits.
- Offering the gym owner 100% of profits can incentivize them to promote more.
- Chiropractors can soft pitch their services at workshops, acquiring new patients.
- Long-term integration includes offering adjustments with gym memberships, enhancing value.
- Collaborations with gyms lead to a continuous stream of leads for chiropractors.
- Employers are also potential affiliates, offering services to employees as benefits.
- Direct to consumer businesses can greatly benefit from employer affiliations.
"The chiropractor splits the money with the gym owner. Hint, if you give the affiliate the gym owner, in this case 100% of the money, they'll want to do it more."
This quote explains the benefit-sharing aspect of the collaboration, suggesting that giving the gym owner all the profits can lead to increased motivation and more events, which benefits the chiropractor by providing a steady stream of potential new patients.
Cost and Returns of Affiliates
- Lifetime Gross Profit (LTGP) is compared with Cost to Acquire Customer (CAC) in traditional models.
- Affiliates are different; returns are calculated based on the gross profit from customers they bring.
- Calculating affiliate returns involves assessing the cost of acquiring an affiliate against the profit they generate.
- A strong LTGP to CAC ratio is crucial for a profitable affiliate program.
- Strategies to improve LTGP to CAC ratio include lowering CAC, increasing LTGP, or both.
- Managing affiliates adds complexity but can be highly rewarding if done correctly.
"So to calculate returns we compare how much it costs us to get an affiliate with the gross profit of all the customers they send."
This quote outlines the process of calculating the return on investment for acquiring affiliates, emphasizing that the focus is on the profit generated from the customers brought in by the affiliates rather than the affiliates themselves.
Building and Scaling an Affiliate Program
- Treat affiliates as customers because they are instrumental in generating leads.
- Referrals and affiliates are two methods to create a compounding business.
- With a successful affiliate army, traditional advertising may become unnecessary.
- Goodwill with affiliate partners is essential for a mutually beneficial relationship.
- Persistent advertising of the affiliate offer is key to acquiring and scaling affiliates.
"Like referrals, affiliates aren't an advertising method you can do. They're people who advertise your stuff to benefit you both."
This quote emphasizes that affiliates are partners in the advertising process, not just a method, and the relationship should be mutually beneficial.
Conclusion and Lead Getting Strategies
- Engaged leads can be acquired through warm outreach, content posting, cold outreach, and paid ads.
- Lead getters can be categorized as referrals, employees, agencies, and affiliates.
- Each type of lead getter has unique strengths and strategies for acquisition.
- Success in lead generation requires persistence and avoiding the allure of get-rich-quick schemes.
- The key is to pick a strategy, stick with it, and scale up over time.
"Get results with those affiliates and use their feedback to work the kinks out of your offer terms, launches and integration strategy. Then scale like crazy by turning their results into your first patch of affiliate lead magnets."
This quote suggests using the initial feedback from affiliates to refine the program and then aggressively scale it by leveraging their success stories to attract more affiliates.
Affiliate Offer and Call to Action
- Alex Hormozi encourages listeners to become affiliates by sharing his book chapters.
- Sharing valuable resources can build relational capital and benefit both the sharer and the recipient.
- Hormozi's approach to his audiobook is unconventional, as he offers it for free rather than charging.
"And so I hope that I can be that channel for you."
Alex Hormozi expresses his desire to provide value to listeners, hoping that by sharing his book for free, listeners will reciprocate by promoting it to others, thus creating a mutually beneficial relationship through the exchange of value and relational capital.