How To Set up Affiliate Marketing for Your SaaS Business (Guide)

Learning how to set up affiliate marketing for your SaaS business could be the growth lever you’ve been looking for.

Many SaaS founders pour their hearts (and savings) into building amazing products but struggle to get them in front of the right customers.

The good news is that there’s a proven way to get others to promote your SaaS product while you only pay for actual results. It’s called affiliate marketing, and it helps SaaS companies generate up to 20% of their yearly revenue.

In this guide, I’ll show you exactly how to set up an affiliate program for your SaaS business – the same strategy that 75% of successful SaaS companies will use by 2027.

Let’s get started!

What is SaaS Affiliate Marketing

SaaS affiliate marketing is a performance-based marketing strategy where individuals or companies (affiliates) promote your software and earn a commission for each successful sale or subscription they generate.

Each affiliate gets a unique tracking link or code, which they share with their audience through various channels, such as blog posts, videos, social media, or email newsletters.

When someone clicks that link and subscribes to your software, the affiliate earns a predetermined commission.

The program works through an affiliate management platform, such as AffiliateWP, which handles all the tracking, reporting, and commission payments automatically.

When affiliates sign up for your program, they get access to a dashboard to grab their tracking links, monitor their performance, see their earnings, and access promotional materials like banners, product screenshots, or demo videos.

Now that you know about SaaS affiliate marketing, the real question is whether you should set up an affiliate program for your SaaS business.

Why SaaS Businesses Should Leverage Affiliate Marketing

Customer acquisition in SaaS is getting brutal. Between rising ad costs and crowded content channels, it’s getting harder to stand out among competitors.

This is why affiliate marketing is compelling for SaaS businesses, as you’re only paying for actual results. While your competitors burn through their budgets on hit-or-miss ad campaigns, affiliate marketing delivers an impressive return on investment.

While traditional marketing channels often deliver diminishing returns, affiliate programs can grow alongside your business.

With commission rates typically ranging from 20% to 70%, you can attract high-quality partners who are genuinely motivated to promote your product.

And since 69% of affiliate marketers primarily use SEO to drive traffic, you’re building a sustainable, long-term acquisition channel that brings in pre-qualified leads.

For SaaS businesses, the recurring revenue model creates a unique win-win situation. Your affiliates earn ongoing commissions as long as the customer stays subscribed, giving them a vested interest in bringing you high-quality, long-term customers.

This alignment of incentives is probably why we’re seeing the global affiliate marketing industry projected to reach $27.78 billion by 2027, with SaaS companies leading much of this growth.

How To Set up Affiliate Program for Your SaaS Business

Below is the step-by-step process for starting an affiliate program with WordPress for your SaaS business.

Step 1: Choose the Right Affiliate Management Platform

The first crucial step in launching your SaaS affiliate program is selecting a robust management platform.

For your WordPress website, choose AffiliateWP. It’s the best affiliate management tool, providing robust features and everything you need to grow your program efficiently.

AffiliateWP: best WordPress affiliate management plugin

Remember, your chosen platform will be the backbone of your entire affiliate operation, so it’s critical to select the right one.

AffiliateWP is the best choice as it offers advanced features essential for SaaS operations: real-time tracking, fraud protection, and the ability to handle complex commission structures.

To get started head over to AffiliateWP’s pricing page and select the plan that suits you, run the setup wizard and you’re good to go.

Step 2: Define Your Affiliate Goals and Commission Structure

Start by examining your unit economics carefully. Calculate your customer lifetime value (LTV), customer acquisition costs (CAC), and profit margins to determine what percentage you can sustainably offer affiliates.

For SaaS businesses, this typically translates to commission rates between 20% to 50% of the monthly recurring revenue (MRR), though some companies offer up to 70% for annual plans.

Remember, you’re not just paying for a one-time sale – you’re acquiring a customer who could stay with you for years.

Consider implementing a tiered commission structure that rewards performance and loyalty.

For instance, you might start affiliates at 25% commission for their first $5,000 in referred MRR, then increase to 30% for $5,001-$10,000, and 35% for anything above that.

This encourages affiliates to promote your software and stick with your program long-term actively.

You can also offer special bonuses for annual plan referrals or when affiliates hit certain milestones.

Set clear program goals that align with your overall business objectives. Are you aiming to increase market penetration in specific sectors? Looking to boost annual plan subscriptions?

Your goals will influence not just commission rates but also the types of affiliates you recruit and how you structure performance incentives.

Step 3: Customize Your Affiliate Area and Registration Process

Creating a professional, user-friendly affiliate area is crucial for attracting and retaining high-quality affiliates who will effectively promote your software solution.

Your affiliate area should start with a compelling landing page that clearly communicates your program’s value proposition.

Include key information about your SaaS product, commission structure, and program benefits.

For software products, it’s particularly important to highlight any unique selling points like lifetime commissions on recurring revenue, exclusive promotional tools, or special incentives for enterprise deal referrals.

Create a comprehensive affiliate dashboard that serves as a one-stop resource center.

If you have AffiliateWP’s Professional plan, you can upgrade your affiliate dashboard with the Affiliate Portal addon and provide a more modern interface for your affiliates.

Step 4: Recruit and Approve High-Quality Affiliates

Start by identifying potential affiliates who already understand and operate in the SaaS space – this could include industry bloggers, tech influencers, and your customers who can authentically speak about your product’s value.

Look for affiliates with experience promoting software solutions and understand the complexities of SaaS sales cycles. Check out our complete guide on how to recruit top affiliates.

When reviewing affiliate applications, focus on quality over quantity.

You can use AffiliateWP’s AI Affiliate Review feature to help screen applications and identify the most promising candidates.

Once approved, welcome new affiliates with a personalized onboarding message that sets clear expectations and provides immediate access to your promotional resources.

Step5: Develop Strong Affiliate Incentives

Developing strong affiliate incentives is crucial for the success of your SaaS affiliate program.

Generic, one-size-fits-all approaches often fall flat, failing to inspire affiliates to go the extra mile.

Here’s how you can incentivize and motivate your affiliates with AffiliateWP:

Tiered Commission Rates: Motivate affiliates by creating commission tiers that increase as they generate more referrals. AffiliateWP allows you to set multiple tiers, rewarding affiliates with higher commission rates for reaching set referral milestones, such as 20% for initial sales, then 25% as they grow their referrals, and so on.
Multi-Tier Commissions: Expand your reach by rewarding affiliates who refer other affiliates, with AffiliateWP’s multi-tier commission setup. In a SaaS context, this structure promotes network growth as affiliates earn from their recruits’ referrals, creating a layered incentive to build their own network.
Vanity Coupon Codes: Personalized coupon codes stand out on social media and other platforms. AffiliateWP’s Vanity Coupon Codes addon lets affiliates customize their codes, boosting engagement by allowing affiliates to create codes that reflect their brand, such as “SAVEWITHJANE.”
Sign Up Bonuses: Attract affiliates right from the start by offering a sign-up bonus. The Sign Up Bonus addon in AffiliateWP lets you set an initial reward for new affiliates who reach specific sales targets, encouraging them to engage with the program early.
Lifetime Commissions: For SaaS, where customer retention is vital, you can use the Lifetime Commissions addon to link customers permanently to affiliates. This means affiliates continue earning commissions on every renewal or additional purchase made by the referred customer, providing them with a lasting incentive.
Affiliate Leaderboards: Capitalize on affiliates’ natural competitiveness with leaderboards that display top performers. By showcasing earnings and referrals, you create a social incentive that encourages affiliates to reach higher, which is particularly effective in a SaaS program focused on growth and consistent revenue.

Remember to regularly review and adjust your incentive structure based on performance data and affiliate feedback, ensuring it remains competitive

Get Started With Affiliate Marketing for Your SaaS Business

Remember, successful SaaS affiliate marketing is a two-way street.

Your affiliates’ success directly impacts your growth, so invest time in selecting the right partners, providing them with comprehensive resources, and creating incentive structures that align with your business goals.

The most successful SaaS companies already leverage affiliate marketing to drive up to 20% of their annual revenue.

So there’s never been a better time to start your program.

For more in-depth insights, explore our comprehensive resources:

But here’s the truth. All the strategies and insights won’t make a difference until you take action.

The sooner you launch your affiliate program, the sooner you can start building a network of partners who are invested in your success.

Start You SaaS Affiliate Program →