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This week, JD dives into the world of affiliate marketing with the co-founder and marketing director of one of Shopify’s top affiliate apps, LeadDyno. Having worked with online retailers since 2013, Brett and his team know the ins and outs of affiliate marketing and how to make it a huge success for your business. Brett and JD discuss the various types of affiliate marketing, ranging from individuals to social communities.

Brett: In the online world it really boils down to two things. It’s making your product better and then you got to figure out ways to market it.

Speaker: The biggest names in e-commerce share tricks of the trade, from tools and software to strategies and growth hacks. Learn from the best, and take your business to the next level.

JD: What are the actual tactical things that you’re doing to attract people?

Speaker: Now your host, JD Crouse.

JD: Hello and welcome back to E-commerce in the Trenches. This is JD Crouse and today I’m excited to bring to you the affiliate marketing guru Brett Owens from LeadDyno.com. Welcome, Brett.

Brett: Thank you JD.

JD: Awesome. Where are you connecting with me from right now?

Brett: Sacramento, California. It’s our global headquarters.

JD: Nice. Very cool.

Brett: And only headquarters.

JD: Well that’s a good place to be based out of.

Brett: It is. We like it. It’s where we started the company from and it’s been a good spot for us.

JD: Good. E-commerce store owners are always looking for the Holy Grail of traffic, and sometimes that can be translated into free traffic that you don’t have to pay to get on your site, and I think that affiliate marketing is so interesting and compelling and frankly we haven’t really focused that much on it and so I’m excited to learn from you today. I’m excited to hear some success stories of some clients, some merchants that you work with, and for you to just peel back the curtain on this whole affiliate marketing world. So let’s just jump right in. Tell us a little bit about how you got started.

Brett: We started with LeadDyno as a project from my previous and still actually ongoing company. It’s an online software company. We had tried doing affiliate marketing reseller programs for that particular company in 2009, 2010, so I had installed some of the classic old school products in the space. I gave out affiliate links to people who I had signed up as resellers to other bloggers and such who I wanted to talk about our product or who we had a relationship with. I was excited about it. We couldn’t get it all to work from a technology standpoint. I just found myself at the end of the month writing checks for $14 and putting stamps on them, and it just all took too much time for me to manage so we ended up stopping the program after maybe six months to a year of trying it.
But it was always something hanging over us because we always wanted that, as you mentioned, as a core marketing strategy. There’s only a couple of maybe free marketing strategies that actually work. One of the would be SEO, search engine optimization, which I’m sure you talk about often with your guests. SEO takes a while to build out, and so it’s not really a quick fix if you’re looking for traffic today, where a great way to get it is with an affiliate reseller program.
That hung over us for a couple of years where we would have requests from folks asking us for affiliate links and it kind of kills you when you can’t give somebody that link because they want to talk about you more on their site and they’re looking for just a commission based on when they’ve got a successful referral, so from our standpoint as an entrepreneur it’s perfect because we’ve got the perfect marketing spend setup in that case when we have an affiliate relationship. I know what my cost is going to be when somebody refers somebody to us, and I just pay them if they’re successful and if they’re not successful then they’re helping us out with some free advertising and free PR.
So it’s exactly what we wanted to drop, so we came back to it 2012. We decided hey, we’re just going to build our own affiliate marketing tracking system. My cofounder at the time, a developer working with us, said, “Hey, do you want me to build this like it’s a product and we could spin it out?” I said, “Sure. I know others who need something like this and need it to be effective and updated to the modern world in terms of today’s landscape where folks are sharing on social media, Facebook, and then later Instagram came along.” Anyway, we spun it out as its own company and it took off and it’s much bigger than the original company today so just another one of those cases where filled our own need and then it just took on a life of its own.

JD: Very cool. So basically when you spun it off as a standalone product, was that in 2013?

Brett: That was 2013. Exactly. Yeah, so we got our first customers using it in April of 2013.

JD: Okay, and you’re on Shopify. Were you one of the first apps? I remember you telling me.

Brett: Yeah, exactly. We were early into Shopify. I believe it was 2014 that we did an integration with Shopify and an integration with BigCommerce and we saw how big the e-commerce world, and it was much smaller then than it was now, but saw the growth that was there. So we were early into the Shopify landscape and we’ve always been one of the earliest two products and apps there for doing affiliate, and then later what is almost more known today is influencer marketing where you’re connecting with the top folks in your industry so that they can talk about you and get a percentage or commission of the sales they refer.

JD: Of the merchants that you have on LeadDyno right now using it actively, what’s the split between Shopify and BigCommerce?

Brett: It’s much larger Shopify. I would say it could be as big as a five to one count in terms of the number of merchants hosting on Shopify versus the number on BigCommerce.

JD: I was reading … I get these stock alerts and things, and for whatever reason I was not intelligent enough to buy Shopify stock when they went public.

Brett: Well it looked expensive, didn’t it?

JD: It did.

Brett: Because you saw the price to earnings ratio was I believe infinite because they didn’t show earnings, but the growth has been amazing year. They’ve been doubling every year as long as we’ve been working with them.

JD: Yeah. I don’t know if I read this right. It was on SeekingAlpha.com, but they’ve added like 177,000 merchants just in 2017. Does that sound right?

Brett: I think so. When we started, and I think this was back around 2014, at the time they had 100,000 and they were doubling every year so we looked at it where we said … When you do startups and stuff everyone talks about your addressable market and they like to do the fancy PowerPoint slides and all that, but our calculation looked pretty simple where Shopify alone I think was around 100,000 at the time and they were growing 100% a year, so there’s your market growing at 100% a year and 100,000 off that base. I don’t know if they’re quite doubling at this point but that wouldn’t be surprising if they added close to 200,000 this year or if they were on pace to do that in terms of the number of new stores.

JD: That gives you a pretty cool opportunity to help a lot of e-commerce owners, a lot of merchants like me, and just a few podcasts ago if you haven’t listened to it, whoever’s listening right now, you ought to go back and listen to My Cents of Style, John and Courtney Brown. They’ve been around quite a while. I met them back in 2014 at InfusionCon and they have built their business on the back of affiliate marketing and they’ve actually done a fantastic job. This is an interesting space to be in. Now, how do you differentiate? What makes you different? You said that making links easy to share with influencers, making it easy to share with their audience on social media and things. There are some old sites out there that are very successful like ShareASale that are a competitor so to speak in the space. What makes you guys different and much more easy to use?

Brett: We start from the merchant standpoint, what a merchant is typically looking for when they’re looking to launch an affiliate program. One, they want it to be easy because they’ve got a million things going on so they want that easy setup and install, so that’s where having an integration directly with the platform that you’re using really helps. In our case we have integrations with over 15 different platforms. Shopify would be one. BigCommerce we mentioned. Magento, WooCommerce.
These are all basically one-click plugins where you add our app to your store and you’ve got everything up and running, so that’s been a big differentiator for us because if you go with a more of a classic system, it’s an old school setup. You’re shelling over $1,000 first of all to get started. You’re doing some custom install. You probably need to hire developers on their side, on your side, so it’s a bit of a mess to get it all hooked up. So the nice thing about LeadDyno, when you find it available in your local app store in terms of the platform that you’re using, it’s a one-click install. You’ve got an affiliate website going. You’ve got dashboards for your affiliates going, so you got everything that you need going right there.
Then when we look from the affiliate’s perspective, we want to encourage them to share as much as possible. How do we do that? We make life as easy as we can for those affiliates. So what we’re doing on the affiliate side, if a merchant signs up with us they then get their affiliate manager account. Each one of their affiliates then is going to get access to an affiliate dashboard so whether they’ve got 3 affiliates or 3,000, they’ve got a way that they can manage these folks where each one of their affiliates gets access to basically a pretty easy to use little webpage that they can access from their computer or from an iPad or from a mobile app on their smartphones where they can share their affiliate link and get that out there onto Facebook, onto Twitter, onto Instagram. They can track their own progress to see how they’re doing in terms of the commissions that they have earned and they can stay in touch with the affiliate manager, receive newsletters, things like that so in terms of the engagement and making things as convenient as possible for the affiliates, and then we’re also going back to the merchant.
Helping the merchants engage those affiliates and helping them send affiliate newsletters to them. You’re getting some automated emails that are keeping them in the loop so we’re trying to get as most leverage as we can from both sides there, and again gearing everything to how people are working and interacting with technology in the year 2017. It’s changed a lot even in the few years since we started, so that’s a big advantage where we’re able to take a look at Instagram’s new API. We just updated our interface with Facebook because they’re changing things all the time, so staying on top of the current platforms that most people are doing all their talking, doing all their sharing, doing all their referrals on.

JD: Very cool, and obviously a mobile first kind of a strategy. Depending upon the week, 75 to 78, sometimes 80% of our traffic is coming from mobile devices on our site.

Brett: Yeah, and that was a big push for us this year. When we kicked off the year we looked at mobile and looked at our affiliate dashboard, so we made that responsive, mobile friendly so it could be accessed from the phone, and then also one of our more popular features this year has been an affiliate dashboard app where affiliates can go into the Play Store or the iOS Store and get the app on their phones. They put in their email address and then we match them up with the affiliate program or programs that they’re a member of.
So yeah, if not mobile first it’s definitely 1A and 1B where they are right there together, so I totally agree with you there that mobile interaction, it’s really huge these days and kind of a seamless thing for people jumping from their computers to their phones. They want it all in both places, so from an affiliate’s perspective if you’re a merchant and you can have affiliates out there who are waiting in line at the store, or they’re waiting for their food at a restaurant and they can hop on their phones and they can do a quick Facebook share. I mean why not have them use that time productively for both them and for you?

JD: I know in the Internet marketer space that running affiliate contests centered around launches and/or big promotions, big pushes, is a big deal and I’ve never participated in anything like that. Do you guys have any type of contests or way to encourage competition amongst a merchant’s affiliates?

Brett: Oh sure. Yeah, that’s very common amongst our users as well. They’ll run contests amongst their affiliates and there’s a certain timeframe so like you said it may be for a launch period. It may be for a week. It may be for a month. We’ve seen customers who have run ongoing contests to get those affiliate competitive juices going so folks are excited about it, and then what are the prizes? Usually it could be something physical. It could be an iPad. It could be something that they’re buying for them. It could just be a bonus commission.
We ourselves have had success with having our own affiliates help us out as well. We’ve run some contests and we’ve just done some bonus commissions where folks are interested in doing some extra promotion, some extra social media posts. Reviews are a nice way to engage your affiliates because a lot of them use your products and I actually just wrote a newsletter about this a couple of weeks ago where as online business owners, we’re all conscious about the online reviews. What’s a bad thing about the online reviews? Well a bad thing is it’s usually only bad apples who are really inspired to write reviews.

JD: I know.

Brett: You may have seen it before where you’ll see a review pop up from just a, I don’t know, random angry person who maybe they came across your site or maybe they just barely did and then they just move on, so what you want to do is then engage the good people in your business life to inspire them to also leave the review, so a sort of affiliate forced event is a good source of folks who will enthusiastically then go to bat for us, and I’ve shared that with many of our customers as well. It’s a nice technique also to think of your affiliate sales force as a good resource for doing stuff like that.

JD: E-commerce in the Trenches is all about attracting, converting, and retaining great customers. Do you have a success story from a merchant that you could share with us?

Brett: Sure. We’ve actually just caught up with him yesterday, so Russell, one of our customers, and he was actually on a Shopify podcast talking about his rep program. Russell’s got an interesting story. He was in college and if I recall correctly, he started lifting weights because he was kind of a skinny guy and realized he needed to bulk up a little bit if he was ever going to get a girlfriend in college. So he starts hitting the gym. He gets into the weight stuff, and the folks that he’s going around the weight room with, his buddies who are maybe hard pressed to buy beer on weekends, these guys are spending $250, $300 a month on protein supplements, and Russell’s like, “What are you guys doing? You guys are crazy.” I assume they’re going to GNC or whatever stores they’re going to.
He says, “Hey, there’s got to be a cheaper way to get this stuff online,” so being a kind of a born entrepreneur, instead of buying the stuff online he decides to make his own stuff, so he makes his own protein formula, names it Campus Protein and figures there’s more Russells around the country who are on campuses looking for affordable but high quality protein products to help with their weightlifting efforts. So what does he do? He gets this sales force going where he has reps on campus who will hang out at the gym. They’ll give out some free samples. They’ll show guys what it’s all about, and ladies, and show them the protein stuff, and he’s expanded that program where if the rep then sells a customer, not only do they get a percentage of that sale, I think it’s 8% that he’s currently offering, but they also get that customer for life so they would then earn that percentage on every subsequent sale.
So I asked him yesterday, JD, after we went over what we wanted to talk about on the show just to get an update from him, and he told me he’s now got 1,500 college reps representing Campus Protein, and that’s across 300 college campuses so that is literally his go to market strategy, so he’s got the college landscape blanketed with reps who are selling. They’re earning some good side money on campus. It’s probably better than a minimum wage campus job, and Russell’s built a great business from that rep model.

JD: That is amazing, and he’s running the whole affiliate program on LeadDyno.

Brett: He is, yes. Yep.

JD: Nice. Can you share numbers, even generically? Like how much revenue he’s running through that program, or …

Brett: I didn’t talk specific numbers in terms of revenue with Russell so I don’t want to put words in there or share anything that he wouldn’t want me to share. I do have numbers from another affiliate manager who, I’m not able to name their store or program, but to give you a perspective of how this particular merchant is doing on their affiliate sales. Month to date, and we’re talking here towards the end of September, not quite at the end of the month yet, he has already paid out … This is a jewelry product. Jewelry is one of our larger industries in our affiliate network. He’s already paid out $28,700 in commissions. That’s month to date. He also has another $10,000 in commissions that he’s owing his affiliates, so he’s on pace, he could pay close to $40,000 in commissions in September, which sounds like a big liability until you think that these are commission, so these are a percentage of the sale.
In his case he’s in that 20 to 25% range on the commission side, so you can see what level of sales his affiliates are doing for his particular product. So some big volumes being done by affiliate marketers, across a wide range of industries from jewelry to health and fitness products to clothing, you name it. I was talking to somebody in the family industry this morning and they’ve got children books. We’ve got them ramped up. I mean you name it, there’s affiliates in that industry with a blog, with a social media following. Some are boots on the ground like Russell’s guys looking to help get you in front of people that they’re interacting with on a day to day basis.

JD: That’s fantastic. When we were talking yesterday, affiliates, for those of you that are a merchant, and I’m not speaking from experience because I haven’t poured a lot of effort, but Brett has got my mind spinning now. We were wanting to put a campus program together and we just didn’t give it enough attention to really do it well, but our product, Bolder Band, would actually really work well in that scenario, but affiliate marketing is just another channel. Just like paid advertising, social advertising on Facebook and Instagram, Twitter if you want to throw money down the drain in my opinion. But also SEO. In addition to that email marketing, and so it’s just another channel that we can drive traffic to our site.
What are you seeing as far as best practices as far as … I know that margins play such a big piece in the core business, but do you have some best practices that would be applicable? Let’s just take the apparel category. Percentages or contests, or who are the people that are really killing it and what are they doing?

Brett: Actually JD I’m glad you asked that. Let me pull up … I actually wrote an article for our own customers. I did a breakdown by industry, so I did the top ten affiliate programs across each of our 21 categories, so looking at the top programs as listed in our network in terms of what they are offering on commission. For clothing or apparel, 10 to 15% is what is standard in that industry. What I always tell people, it’s always good to be competitive. We do that, so our own product for software as a service category where we fall, as is our sister company I mentioned earlier, we offer a 30% recurring commission. That is on the high end. 20 to 30% is common for SaaS, but of course that’s intentional. I want to have that competitive advantage.
We’re also able to do it, so that’s the other thing that I tell merchants who are trying to decide what they want to offer in terms of commissions because I tell them hey, take a look at what you’re spending on your paid stuff. You’re probably doing something paid. You’re buying AdWords from Google, you’re doing ads on Facebook, or maybe you’re doing some sponsored ads or sponsored posts on blogs. So however you’re spending money and however you’re thinking of that, what you’re willing to pay to acquire a customer, I believe in just applying that in full to your affiliate program because in my case if an affiliate can acquire a customer for me for the same price that I’m happy to pay Google or Facebook to do it, I’m happy to do it.
I mean, I’d rather give the money to an affiliate than to some faceless corporation. No offense to Zuck, but to some faceless corporation, right? I’d rather pay that to an affiliate who I have a personal relationship with who will continue to promote us throughout the rest of their online lives. That’s the way I would look at it is take that number, whatever your … And cost per conversion is often what you’ll see in Google and on Facebook, so whatever you’re willing to pay for conversion, why not give that to an affiliate if they’re going to do all that work just to bring in somebody new to the fold who you probably would never have otherwise met? That’s where I encourage our customers to think about things and to gear their affiliate commissions setups.

JD: Cool. Give me the link to that article because I want to put that in the show notes on this episode.

Brett: Oh, you bet. I will send it to you here in the chat window actually.

JD: Awesome. That’s great. What is the your biggest business flop, Brett, that you’ve been involved with?

Brett: Well, it’s hard to narrow them down.

JD: I know. I’ve had a few big ones too.

Brett: Well, I had a campus one early on where I had a … This is back in 2004 where I tried doing an eBay type website for college campuses and my master strategy to market the website was going to be pens, and you didn’t hear that incorrectly. It was pens, like you write with.

JD: Like with a click? Like that?

Brett: Click click. Yeah a little plastic pen with a logo because the 2003 graduate I was, I was maybe the last generation where we had notebooks and pens, so during a boring lecture, and this is before really smartphones and stuff like that, you would just end up staring at your pen, so I thought it was brilliant that I would have the logo on a pen. I would just give the pens out to campus and then everyone would want to go home and go to my website, so I think I still have this box in my basement because my wife won’t let me throw them out but I have about 1,000 pens with a cheesy campus flea market logo on there.
I also spent about … And this was a big spend early on because I think I spent $2,500 on the software for the auction website and it only half worked, and then I spent another $2,000 with a lawyer incorporating the company because he said, “Hey, if it doesn’t work out between you and your wife, we really need to protect your assets here. We don’t want her getting a piece of this when you have a lot of money in your account,” so needless to say I basically never sold anything off of the site. I’m still with my wife. I’m not with the lawyer but he got his $2,000. The software company got their $2,500, so I spent $5,000 for about nothing which is maybe not the worst thing in the world but a good early failure lesson where maybe you should try to make a dollar or two before you go and spend $5,000.

JD: Yeah. Oh, Lord. I’ve done very similar things. Talk to me about the status of cookies and tracking. Let’s get a little geeky here for a moment, and what you guys are seeing in that realm.

Brett: Sure. To break this into layman’s terms, because to be honest with you I had to have this broken down into layman’s terms for me when Apple made an announcement last week. Basically Apple made an announcement that with their new Safari browser they were going to almost disallow what’s known as third party cookies. They were going to continue to allow first party cookies. Third party cookies would be timed out after 24 hours.
First, so what’s a cookie? When you go to a website, most websites these days you just leave what’s called a cookie on your computer which is basically a way of them identifying you and your habits, and it is a little creepy as it sounds. That’s why Apple is starting to distinguish between good cookies and bad cookies. There are ways that they do make your life more convenient. If you’ve ever cleared your cookies for privacy reasons and then you go back to your browser, you realize it’s a huge pain because you’re typing stuff back in and it’s like your browser forgot who you were. That’s because it did, because you cleared out those cookies. So they can be used for good. They can of course be used for not so good, so that’s what Apple and really the rest of the industry is going to increasingly distinguish.
What does that have to do with affiliate marketing? Where that comes in is that the main method where many affiliate marketing companies have used it to track referrals has been cookies, where if you’re an affiliate marketer and you use your link somewhere and somebody clicks through the link, whether it’s in your Instagram profile or through a Facebook post, and they end up on the website that you refer, that is all tracked through a cookie. That’s how we as LeadDyno would know that if that person purchased, you would be the affiliate to get credit thanks to the cookies.
We fortunately made a smart decision early. By we I mean our CTO and CEO, our smart developers. I was not even a part of the conversation. But they made a smart decision to build with first party cookies which means that when we use cookie tracking, we identify that it’s behind LeadDyno.com, so we kind of identify ourselves so the Internet police, they eventually know who we are. They know what we do. They know that we’re reputable, and then they are allowed to stay. Whereas the third party cookies are the ones that are a little more … Sorry, we got some sirens going by our office here in the background.

JD: It’s alright.

Brett: It’s not the cookie police. We’re legit. They just rolled right by so we’re in good shape there since we use the first party cookies. The third party guy is probably who they’re going to get are the folks who don’t really identify with themselves. They might just point to another domain. Long story short, Apple is going to start wiping those out almost on impact within 24 hours, so any affiliate tracking software that uses those, they’re going to be in trouble. It basically means their links are going to stop working. All their tracking is going to stop working.
Same with if you’ve ever geeked around with pixel tracking, so when you talked about old school products that have been in the industry for awhile, a lot of them used to use pixel tracking where if you ended up on a purchase page, there would be a pixel there and that would identify that the sale was made. Kind of a cheesy, early way to do it. That’s also going to stop working, so the solution then is going towards the first party cookies that I mentioned, and then also going towards direct integrations as I mentioned. So it means that the favored, again, trackers will be the ones with the integrations, so the ones that you’ll find in your Shopify app store, in your BigCommerce app store, so on, so forth.

JD: Very cool. As far as how you guys do business, you charge a flat fee. Is that correct?

Brett: We do. We charge a monthly fee. It starts at $29 a month for Shopify and BigCommerce users. Starts at $49 a month for other folks, and then it goes up based on total traffic levels to your website which is how we found the most fair way to do things, and then it’s just a flat, tiered system based on your traffic level, so we don’t do a percentage of the commission or anything like that. Then no big setup fees. We also found that to be a nice advantage as well where we don’t have the big setup. You can get started, see how things are working for you, start cheap, scale it from there.

JD: Very cool. Then do you have to bolt on a payments provider or somebody that actually handles the percentages and the payout and automate some of that?

Brett: That’s also handled within LeadDyno. We track the commission percentages. We track who you owe what to. You’re able to set up the commission plan in our system. I mean, we can help you set that up. Typically you would choose the percentage, and again, that’s something we can guide you towards. So if you had the apparel product, we could say, “Hey, the average is 10 to 15%. Or the average good program or very good program is 10 to 15%,” so you could maybe think about choosing something in there, and then we’ve got a variety of nuances in terms of the commission plans that are possible, like multilevel plans or recurring commission plans or things of that nature.
But anyway, you set that up within LeadDyno. We do the calculations. We give you then a payment screen of who you owe what to, and the most popular way to pay is with PayPal where you could just hit a PayPal button to PayPal over to someone. All you need is a PayPal account. You don’t actually need an integration beyond that to do it. We’ve got that set up with the PayPal side. Or there’s even a way you could do it with PayPal Mass Pay. You could set up PayPal Mass Pay by contacting PayPal, and if you have a business account you just tell them you want Mass Pay enabled. What that lets you do then is it would let you pay a bunch of people at once, or even everyone all at one time.

JD: Okay, and obviously when somebody signs up as an affiliate they enter their PayPal email address and they’re just good to go, and all of the tax reporting and the 1099s and all of that kind of stuff is just handled?

Brett: 1099s you’re going to want to keep track of yourself and get W-9s from your affiliates. You can either get them from your affiliates before when they sign up or before you pay them. Typically, and I guess I need to do the usual disclaimer that I’m not a CPA and I don’t give tax advice, blah blah blah, but in general in the US if you pay someone, if you pay an individual or an LLC, if you pay them more than $600 in a calendar year then you’re going to owe them a 1099, so that would be what you’re going to want to track there.
Now there are ways you can collect that info upfront. We do allow for custom fields on the affiliate website signup page, so that is something that some of our customers do where you could collect all that info upfront from your affiliates as you sign up. You could put it into your terms of service that they opt into, so that you’ve got the W-9 so when you’re chasing down at the end of the year, and you would have the totals as well would be available for the calendar year, so if you’re depending on who’s doing your accounting. You have your CPA firm doing it. In our case that’s what we do, and then they’ll say, “Hey Brett, I need 1099 info for these people.” Then you’ve got that right there and available to provide your accountant.

JD: Very cool. One of the things that I was interested in and anxious to hear your thoughts or your answer is, when you use a LeadDyno link, an affiliate link, if I’m a merchant and I set all this up and I’ve got let’s say 100 different affiliates promoting my products and my store, do I get any SEO juice out of it? Do I get any benefit from those links pointing to my site?

Brett: You do, and that’s a good question and that’s an important one also. With a LeadDyno powered affiliate link, that’s a direct link to your site so it’s advantageous from two standpoints. One for the visitor who clicks on it, because they end up right on your site. They’re not bouncing around the Internet in some kind of sketchy back hall where they end up on your site but they bounce through another site or two. Good experience for the user. Also it’s just another inbound link to your website and that’s only a good thing.
For example this morning I was actually talking to a new advertiser that we’re buying some ads with. He went ahead, and I usually offer this, he went on his own, signed up for our affiliate program, and then came clean maybe an hour later and told me what he did and said, “I hope you’re not mad. I was going to put my affiliate link into some old posts that are still getting traffic. Hope you don’t think I’m double dipping.” And I said, “Mad? I’m thrilled. I was going to offer that to you anyway I just hadn’t thought of it yet or gotten around to it,” but basically what he’s doing then is he’s putting inbound links to us on his high ranking posts, so that’s a good thing for us from an inbound perspective, and then of course we’re thrilled with the traffic also. But yeah, they count as inbound links as far as Google is concerned.

JD: That’s very cool. That’s interesting because we built our business with paid advertising and then obviously email marketing, and I think the paradigm shift that I’m having after speaking with you and after speaking with John and Courtney from My Cents of Style is that … I didn’t want to pay 30, sometimes 35, sometimes 40% of a sale via paid traffic on top of a 20% commission in an affiliate relationship, and the reality is it’s just another pole that you have bait in the water, so to speak, and sometimes you’re going to get people that are bouncing around and finding an affiliate link but the World Wide Web is so big and it’s just one of those things.
It’s like attribution. Who gets credit? Google or Facebook or the email blast that you did? Well, everybody’s going to claim it but the reality is it’s the tide. It’s the rising tide that floats all boats. It’s the aggressiveness. It’s being out there in the marketplace and it’s just another touch point, right? Because most people require 7, 8, 10, 12 depending on who you read and what the price point of the product is, touches before they actually pull out their credit card and make a purchase.

Brett: Yeah that’s right, JD. I would agree with that in my experience and one strategy that’s worked well for us is doing an initial ad campaign with a site that you want to work with and then you offer up the affiliate program to go along with it. You’ll find with a lot of site sponsorships, you always get your biggest splash initially. That advertiser always … Of course they want you to spend with them on an ongoing basis, but from your standpoint and my standpoint where we’re doing the buying, we get our most punch out of that initial one and then subsequent mentions where that’s where that combination of maybe an initial purchase with that affiliate relationship can keep you in that conversation for not only months but years to come, because my goal is always to get that person whether they’re a blogger or Instagram influencer. I kind of want them on our regular payroll where they’re getting a monthly check. Really a monthly PayPal payment from us. So that means that we’re investing in them.
Ideally what I want to do is transition that from the upfront spend that I do initially, and ideally you do it once honestly, and then you transition them over to that commission only thing. So sure, and to your initial point about is it going to be more costly for you on that initial spend? Yeah, it will be, if there is an affiliate link in that initial post, and I’m pretty lenient on it. I don’t tell them to do it. I don’t tell them not to in that post that I’m paying for. They usually don’t double dip there, but if they’ve got other posts that they want to put their affiliate link into or every subsequent time. You’ll be surprised how many times you’re mentioned if they are an active affiliate of yours and especially if they’re getting paid regularly, so that’s my goal is to use that investment to open up the relationship and then see if we can transition them over to that really pay per sale going from there.

JD: What I love about that is it’s just back to good manners and good business practices, which is you can schlep out 1,000 emails to sites that you would love to have an affiliate relationship with, and you might even have a generous commission structure, but it’s pretty easy to ignore that kind of noise if you’re the influencer. But if you approach them and say, “Look, I want to pay you to begin this relationship. I’m going to take you out on a date and I’m going to buy you a steak, and then oh by the way, we’re going to like each other because I’m cool and I hope you’re cool. Then I’d love for you to make money on an ongoing basis through our affiliate program.”

Brett: Yeah, that’s exactly right. It’s really a good analogy, and I have a friend who gave me a call a few weeks ago and he did exactly that. He was initially doing what you mentioned where he was reaching out. He’s got a product where they make little clear ice cubes, so he was doing the right thing reaching out to the bloggers and influencers, but nobody was taking him up on it and he called me to talk to me because he wanted to know about affiliate marketing and he was pitching a revenue share.
And I said, “Well, that’s your problem. Nobody cares about a revenue share initially, so I would reframe your initial pitch to asking them,” and I told him. “The two magic words are ‘media kit.'” If you ask them for a media kit, they’ll either be thrilled to send you one, or they don’t have one but they’re going to be so thrilled that you asked they’re going to scramble to work with you on whatever sort of advertising arrangement you want, and then you use that and then now you’ve got a conversation, but you’ve shown like you said, you’re willing to buy him dinner. You’re willing to invest in their website and pay him money upfront, and then you’re also showing that you’re serious. That you’re willing to spend money. That you’ve got a good product.
Because a revenue share on an unknown quantity, I mean who knows? But by doing that you’re separating yourselves from the … If you’re asking for the media kit, they’re getting 19 other pitches that are all saying revenue share and they don’t know how to differentiate those, but even you just saying you’re willing to invest and spend money shows that you’re above those other 19 that they’re hearing from that day or that week.

JD: Absolutely. I love it. What’s the one thing if you could boil down your business success and all that you’ve learned, if you had to leave us with one thing, a piece of advice, what would it be?

Brett: It’s probably a cliché, but staying with it I think is the key because time goes fast in our conversation here. We started, it was over four years ago now. You’ve got 365 days in a year last I checked. It does go pretty, but it goes pretty fast where if everyday you’re paying attention to the market, you’re working on the most important thing so you’re either making your product offering a little better, or you’re figuring out a way to market it which are the two things that make sure you’re successful in any sort of online venture. Those things really add up over time, so in our case we’re looking at we’re over 1,300, 1,400 days in since we’ve been to market, and everyday matters where if you just make that steady, important progress everyday you’ll be impressed where you get.
I should say I probably did learn that lesson the hard way because in previous ventures, and sometimes it’s just for lack of not knowing what’s important and just being a rookie at it, but I’ve spent many weeks, months, and even years doing stuff that wasn’t important and you can go months where you don’t really make any progress, so I think it’s all about just moving the ball forward. Again, in the online world it really boils down to two things. It’s making your product better, so the product is always one thing no matter what it is that you’re selling, so you’re always working on that.
Then you got to figure out ways to market it, and this is definitely one of the key ways that you could potentially leverage to give yourself the advantage. You only need a few ways to work, marketing wise. You probably want more than one, but you don’t even need four or five cogs going. If you can find two or three or four good ways to get customers then you’re really rolling, so just work on finding that first one and then making that better and then adding another marketing channel to it.

JD: That’s awesome. You know, I don’t know about you but you got to have some failures. I think that you’ve got to not spend enough time with some possible winners to be able to look back and go, “Dang it, I don’t know that I gave that one enough attention.” And you’ve also got to spend too much time with some losers to realize, “Oh my gosh, I should have let go of that thing a little sooner.” Until you can really appreciate a good product and a market that you want to spend some time in getting better and putting yourself out there from an integrity standpoint, because at the end of the day all we really have is our word anymore.
It’s like, do we do what we say we’re going to do? Do we follow through? Do we really try to do our best? And for you, what I see in spending this time with you is LeadDyno, you have your other SaaS company, your online software business, but LeadDyno is something that was built out of necessity. It solves a need in the marketplace. You continue to like you said, just work on it everyday. You’re proud of it. There’s always more you can do I’m sure, but you’re working on it. It’s your baby and it’s something that you just know that you’re going to stick with until something changes dramatically. Hopefully not, but the world changes, right?

Brett: It does. It does, yeah.

JD: And then you’ll pivot and you’ll be onto something else that will compound and build upon the foundation that you’ve built with LeadDyno. One thing that we haven’t really talked about, which is I think a really important piece of your business, is your affiliate network. Like, me as a merchant, if I want to get set up on LeadDyno, which I am going to by the way, what am I going to be exposed to other than the technology and the ease of use for the merchant and the affiliate? There’s something much more than that under the hood.

Brett: Yeah, and JD, good point and this is I guess a good example of a pivot where when we launched the product after the first year or two, we had no intention of building an affiliate network because we said well, there are networks out there. That’s not what we do. We’ll teach you how to recruit affiliates, and we did and I would share techniques with our users like I just shared earlier in terms of the media kit or what’s working for me lately, and that’s useful information but at the end of the day, who doesn’t want to join a network and get access to affiliates?
So that was our big 2016 and now into 2017 initiative where at the start of last year we launched our network and we got our merchants in there and then we started doing a lot of affiliate recruitment on our end and our efforts there have really paid off in a lot of the categories and we’ve got a cool little flow going where our new merchants join and they’re listed in our directory from there, and then they can contact me or contact someone from our team. We like to get them featured in our newsletters. We send out these newsletters that feature five affiliate programs and they go out to each category, and we’re actually sending out four of them a week right now, and probably bumping that up to five, so featuring 20 to 25 affiliate programs a week and they’ve got a direct link, so these go out to then our affiliates. They can click from there. They can join these programs, so it’s a real nice setup for both sides for our merchants because they can get some initial traction right away, which is exactly what everyone wants.
Our affiliates and influencers, they are pretty thrilled because we’ve got really unique merchants with unique products that are not being seen too much elsewhere. It’s not like that Amazon link that everyone has and they only pay a little chancy commission off of it. Here these are actual cool products that you can break to your followers for the first time, and you’re going to get a generous commission. Most of the commissions that our merchants offer, they’re above what you find in a typical network or from Amazon or from somewhere else. So it’s a nice setup for both sides, and that’s really a continued area of focus for us where we’re always looking for more ways that we can feature our merchants and then get them in front of more and more affiliates, and with that get more and more affiliates into our network, but it does snowball on itself as you get going and we do a lot of publishing online and then people find our posts and then they join our network because we’re featuring the affiliates there, and so on and so forth.

JD: How many affiliates do you have in your network right now?

Brett: We’re over 40,000 today in the network.

JD: Wow. That’s nothing to sneeze at. That’s awesome. Well hey Brett, it’s been awesome. I’ve learned a ton. I’m excited to dive in and apply some of this stuff in our business, and if someone wants to get in touch with you or connect with you and learn more about LeadDyno or what else you’re doing, where’s the best place for them to go?

Brett: Anywhere on our website they’ll be able to find me or they can talk to someone who is next to me or could find me, and a lot of people do that so that’s cool. So LeadDyno.com is going to be the most direct way to our site, and then we’ve got live chat on there and we’ve got our email and phone numbers, and then my direct, so Brett@LeadDyno. That’ll go into me directly and then Twitter is fine. It works. I’m just @brettowens there as well, but really anywhere on our site or Brett@LeadDyno you’ll be able to find me or someone can find me and we can circle back on any specific questions that you have in terms of affiliate marketing or whatever.

JD: Awesome. Well thanks for being on and I look forward to meeting you in person and talking again soon.

Brett: Sounds good. Same here. Thank you, JD.

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