Peter Peter - Founder, UserActive

Leveraging Affiliate Marketing for SaaS Growth with Joran Hofman

Joran-Hofman_Founder_interview_Affiliate_Marketing

Wondering how you can grow your SaaS via affiliates? You’re in the right place! In this interview, Founder of Reditus, Joran Hofman shares his tips and advice on SaaS affiliate marketing. Reditus, is a platform revolutionising affiliate marketing for B2B SaaS companies.

Joran shares insights on:

  • What to do before delving into affiliate marketing
  • How to build a thriving affiliate network and attract a growing community of potential customers
  • Striking a profitable balance between commission rates and profitability 
  • Leverage product-led growth to incentivise affiliates and for a more seamless customer acquisition process

Whether you’re a budding SaaS founder or an established company looking to expand your marketing channels, this interview is worth a watch. It provides practical tips and insights that can accelerate your growth in the competitive SaaS landscape.

Grow Your SaaS With Affiliate Marketing

Founder Interview Introduction

[00:00:00.570] – Joran

Are we live?

[00:00:02.850] – Peter

Yes, here we are.

[00:00:03.910] – Peter

So I’m here today with Joran Hofman from Reditus. Joran, thanks for joining me. Would you like to introduce yourself? Tell us a bit about who you are and what you do?

[00:00:11.970] – Joran

Yeah, founder of Reditus. It’s definitely on the shirt here. Who am I? Dutch guy. What am I now? 36 years old, living in the Netherlands, in Utrecht. Founded Reditus, two and a half years ago, went full time February 2022. You’re probably going to ask what Reditus is in a bit, so I will just stick it to here now.

[00:00:35.710] – Peter

Okay, yeah, great stuff. So you’ve been working in SaaS for a few years, you build up a bunch of experience and then you launched your own platform, right? So why don’t you tell us a little bit about Reditus and how you started that.

[00:00:49.710] – Joran

I mean, I indeed worked in a startup before this, which was called Leadfeeder. They now merged with Acabot called Dealfront, was head of CS (customer success) when I left. During that time, I got a lot of times the question. Okay, this is a great tool, which tool should I use more? Got so sick of that question that I decided to make it a bit more scalable. Build a website which was called saleslovesmarketing.co at this high, it had around like 25,000 organic visitors per month. And my idea was, okay, I’m going to create revenue from this website, I’m going to apply to all these programmes I listed on the website, I’m going to make money by referring paid clients to them. So basically, doing affiliate marketing.

Didn’t really work out as I wanted. So with many of the tools, I had to log in separately to all the different portals. And there was one tool, which is now the competitor of Reditus, where I had 15,000 clicks in a year and I did not make one sale. So I thought, this can be better. So that’s kind of like how we got started with Reditus. So we basically help B2B SaaS companies to generate revenue without high upfront cost by leveraging somebody else’s network.

[00:02:01.290] – Joran

That’s kind of in short, what we do.

[00:02:04.380] – Peter

Okay, so how do you bring the network to Reditus? What kind of networks are you accessing for the companies that list on there?

[00:02:13.420] – Joran

Yeah, we have a freemium model, which basically means any SaaS company can set up an affiliate programme with us for free. But what they’re doing is when they invite their affiliates, those affiliates get into the network. So that’s why we have a freemium model, that’s why it’s sustainable for us to be able to grow the network like that. So that basically means every affiliate who signs up to a programme can also see all the other programmes on the marketplace. And that’s basically how we now got to already like 5000 B2B SaaS affiliates.

But if we’re going to have this call, I think next year, I’m guessing we’re going to be around like 25,000-50,000 SaaS affiliates because we’re now getting a bit more bigger clients in who move over their affiliates to our network and then from there they can also join other programmes. We’re now at the beginning where we’re starting to push the snowball, which is really nice, has taken us a long way to get here, but now we’re finally getting to really push it.

[00:03:13.630] – Peter

Great, sounds awesome. Okay, so one of the things we wanted to talk about in this chat is how can SaaS companies grow their revenue with affiliates? How do they access that channel and grow revenue?

[00:03:28.630] – Joran

Yeah, I think what I’ve learned, as in, I mean, I knew affiliate marketing, of course, from the other side, as in if you want to get started with affiliate marketing, make sure you have affiliate marketing fit as I started to call it. So you need to have figured out, I mean, you first have to have paid clients because if you can’t sell yourself, how can you expect an affiliate to do it for you? Because in the end, they basically generate traffic towards your site and that has to convert, which means you need to get your conversions in order.

So basically, websites visit to sign up, sign up to paid, which is your expertise, of course. So that flow has to be perfect because affiliates are just going to drive traffic towards your site, right? And if they’re a bit more towards like partners, then they would help you to convert them. But in the end, that funnel has to be good. Ideally, you have social proof. You have case studies. You have logos on your website, so from there it’s easier for affiliates to start referring you. You have the materials they need to actually do so and then from there you can convert them into placeline.

Growing Revenue with Affiliate Marketing

[00:04:33.650] – Joran

So for me, that’s the basis, as in we had a couple of clients who joined us where they thought affiliate marketing is going to be the magic bullet which is going to kick off their company. It doesn’t work like that. Ideally, you already have like a huge user base, which you can invite as well to become affiliates. And then you can have a marketplace with us which basically helps you to grow outside of your own user base as well. So you can have a combination with own network and then the network we provide basically.

[00:05:01.220] – Peter

And the network that comes from Reditus, is that based upon all of the affiliates that have joined from all of the other SaaS companies and the community that’s there? So it’s built up this community. Companies need to come and bring their own affiliate network and then they build and expand upon it once they’re on the platform. Is that how it typically works?

[00:05:25.370] – Joran

Yeah, that’s how we grew so far. One thing we’re doing right now is what we learned, as in like 5000 SaaS affiliates. Sounds nice, but in the end if you’re really neat with your B2B SaaS, it doesn’t mean that we’re going to have your affiliates in our network. So, for example, what we do right now for a couple of our clients, we actually run services. Meaning we’re going to find potential affiliates for your business. I’m always happy to show everybody how to do it because it’s not rocket science, it just takes a lot of time.

Just to give an example, people probably know Semrush or Ahrefs. You can see the backlinks of your competitors when you look at the backlink analytics. You can also see if they’re using an affiliate link to refer towards your competitor. And if they do, they basically know the concept of affiliate marketing. They know your competitor, so they’re active in your industry. So you probably want to reach out to them to see if they also want to start referring you. That’s a really easy way to get started. And then another way, which we often do, is to look at keywords you want to be ranked for and what are the high performing blogs on those keywords.

[00:06:31.160] – Joran

And then you start reaching out to those sites basically if they want to mention you in their blogs. Because when you look at, for example, affiliate marketing or affiliate tools, if I type in Best Affiliate Tools programmes or Best Affiliate Tools, you will find blogs which are going to say the 10 Best Affiliate Tools, the 15 Best Affiliate Tools. So how can you get in? Either by paying a one time fee to get a placement or offering them like a commission, where you’re going to reward them on the paying clients you delivered or they delivered to you.

[00:07:02.950] – Peter

I see, I got it. So if somebody is new to this whole channel and they’re coming in and then they’re launching their first affiliate marketing campaign.

Affiliate Marketing Activities

[00:07:16.090] – Peter

So they already have a little network that they can bring along, what can they expect from affiliates? What are the actual activities and the methods that affiliates use to generate traffic, generate leads, sign ups and new users?

[00:07:29.630] – Joran

Yeah, it depends really, on, I guess, what kind of affiliates you bring on and what do you want them to do. It’s the same with doing marketing for your own site, right? If you have organic, it takes a bit longer, but for example, if you do paid, it goes a lot quicker. So there are some affiliates who are really good in running paid ads, but not every SaaS company would allow it.

Like, we have a couple of clients who do. So they basically say affiliates can run paid ads for us, which means we don’t have to hire a digital marketer, we don’t have to spend budget on Google, and we purely pay a flat fee, like a commission percentage for an X amount of months. So it’s really predictable for us how much do we spend on a paid client. Like, it’s predictable customer acquisition cost. One thing I would say here as well, don’t allow them to run paid ads on your brand name. They even allow that. I would never do that personally as a SaaS founder. Another way, I guess you can turn it around again, who has access to your ideal customer profile in bulk and how do they have access to it?

[00:08:35.770] – Joran

So do they have a newsletter, for example? This is a perfect example, you have access to the network I’m looking for, right, SaaS founders, so if I would want to bring you in as an affiliate, I could ask like, hey, do you have a newsletter where you will send emails towards all the user base, for example, which is going to be really relevant to me. So always, I guess, see what can they do and how does your end user consume content and then try to get an affiliate to basically mention you like that.

So it could be blogs, could be newsletters, could be paid ads, could be paid ads on Google, paid ads on social, even one on one. If your SaaS is higher ticket, then you can find more like consultants, agencies who bring in their client base towards your SaaS. So can be anything. Look at your ICP. Do they have access to it and how do they talk to them?

[00:09:35.110] – Peter

Yeah, right, okay, so there’s a nice range of activities that they can do. And then also you mentioned earlier about you need to be at the right stage where you have paying customers and a good network. What’s actually exactly the right time in the order of things for a SaaS company to do? I imagine they already should have their go to market strategy and some channels that they already rely on. And do you see affiliate marketing as a kind of additional channel once you have say, your digital marketing up and running and it’s already effective, or you have outbound sales up and running and effective, where does it sit within this mix of go to market tactics?

Timing & Effectiveness of Affiliate Marketing

[00:10:19.350] – Joran

Yeah, I think definitely you have to have some channels already running so it’s not more don’t need to have a sales team. We kind of have our focus now on product led growth companies, which are B2B SaaS. Like, that’s our niche. So what do they need to have? I guess people actually signing up and going to purchase themselves without talking to anybody. So again, having paid clients, but think about it. When you get affiliates in, what do you want them to do? How can you help them to make money? So that’s the question you need to ask yourself. So what do you want them to do? Is it mentioning in the newsletter is maybe running those paid ads? Is it maybe adding visual storage to the site?

So if you already have channels running, it means that you already have visuals, you already have content. If you run ads and you know what kind of keywords you want to be ranked for. So the more I guess you did, the more information you have about also your ideal customer profile and the more easy it is to find affiliate. So definitely if you did marketing yourself, you know, of course what kind of challenges they run into and again, you figured out your conversions and you optimise it as much as possible, that’s definitely key because otherwise you’re going to have affiliates who drive traffic.

[00:11:36.360] – Joran

If they don’t convert, affiliates will leave in the end. It’s cost per action, so they only get paid when they actually deliver you paid clients, so if it doesn’t convert, then nothing happens.

[00:11:47.970] – Peter

How difficult is it for affiliates to be effective and actually earn revenue? Because I expect the cost of acquisition is coming into play quite heavily here because if affiliates are earning some commissions, that has to be factored into the cost of acquisition. And I imagine you need to have enough margin to make that to provide an incentive to the affiliates and also that they can be effective and actually earn revenues, but then also bring in lifetime value users that actually are profitable for the SaaS company. So is that a very delicate balance of getting that right and is it easy or difficult for affiliates to become effective and consistent?

[00:12:31.070] – Joran

It’s definitely a delicate balance. Like, it’s a question I get asked a lot, like, I even made an LTV CAC ratio calculator on how profitable can your affiliate programme be, which basically looks at lifetime value versus customer acquisition costs.

But the second question you ask is like, how effective can an affiliate be? As in if you then completely turn it around and look at how much money can an affiliate make? Which is the most important question, maybe or when would they start running for you, I guess? That’s maybe even more important because in the end they’re going to tap into a network you don’t have right now. So you might have not gotten those clients when you didn’t start an affiliate programme.

So you should also look it from the other side, as in how much money is an affiliate able to make? So if your SaaS is only $10 and you give away 20% for twelve months, it’s not a lot of money, right? It’s $24 for every paid client they bring on, which is not going to probably have them start referring you. So effectiveness. I guess the sooner an affiliate can make money and the more money they make, the more effective they’re going to be for you and the more they’re going to run for you.

[00:13:43.430] – Joran

So what we experience with the higher ticket sales, it’s really nice to set that commission, but it’s going to take affiliates longer to actually make money because the sales cycles are often a bit longer. Where, for example, if you really product led growth, like a real self serve company which only have a 7 day or 14 day trial, it’s going to be quicker money and affiliates are going to be more incentivized. So depending on the pricing structure. It’s also depending on how much do you need to keep your affiliates motivated until they make that first sale, second sale, etc.

[00:14:18.200] – Peter

Yeah, I see. Cool.

[00:14:19.680] – Peter

Okay.

Connecting with Joran and Reditus

[00:14:19.970] – Peter

Hey, Joran, thank you so much for talking us through that. That’s really good intro to affiliate marketing. How can people check out Reditus or get involved with giving the platform a try?

[00:14:31.410] – Joran

I mean, go to www.getreditus.com or find me on LinkedIn, Joran Hofman. My slug on LinkedIn is flip flop entrepreneur. You can search for those 2 terms and then more than happy to help anybody with any questions.

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