Are Affiliate Programs Worth It for Early-Stage SaaS?

Short answer: usually not as your main channel. Affiliates are scalable and low risk if you hand them a playbook, but good ones are hard to find, they churn, and the work is shallow. An affiliate buys you impressions. It does not buy you conversions.

On paper, affiliates are ideal. Give them something bundled, a playbook, and it works: tell your audience about this tool; this many will click, this many convert, this is what you get paid. Very low risk, and they usually already have an audience.

So why isn't it the answer?

1. Good affiliates are hard to find and hard to onboard. It takes a whole new sales strategy: instead of marketing to users, you market to affiliates.
2. They churn. Instead of retaining users, you're retaining affiliates, and they drop off quickly.
3. The work is shallow. They don't follow the user or the journey. They find the lead, get the person to click and send them your way, so they stay loosely attached to your company.

If you can't afford all three (a second sales motion, a retention programme for partners, and a funnel that works without them), it isn't your channel yet.

We saw it ourselves

We had a collaboration between two businesses that was performing well. Then one side started doing affiliate work and showing a lot of other links, and our collaboration took a hit. Our offer wasn't an extension of their product anymore. We were just a fancier affiliate.

Without us changing anything, conversion dropped like crazy: from 32% of the founders who clicked through signing up, to 7%. It's one integration of ours, not a benchmark, but the direction is the point. The whole case is in why our conversion rate dropped from 32% to 7%.

Graded

• Upfront cost: nothing.
• Scalability: high on paper, held back by churn and how few good ones exist.
• Fulfillment: easy, if you give them the playbook.
• Risk: low.
• Difficulty: hard: finding and onboarding them.

Verdict: great at being seen, bad at being chosen.

Frequently asked questions

Should a new SaaS start an affiliate program?

Only if you can supply a playbook and you have time to recruit and retain affiliates. Most early teams don't.

What converts better than an affiliate link?

Being part of the partner's product: an integration, not a link among many.

Why do affiliates churn?

Because nothing ties them to you. They pass traffic and get paid on what converts, so when another offer pays better or the audience tires of yours, they move on, and you are back to recruiting.

On Ordana you list one feature of your product as a widget and other startups integrate it inside their products, instead of adding one more link next to theirs. List your SaaS as a widget.

Related reading:

• How to Get Paying Users for Your SaaS Without Ads — affiliates next to the other three models.
• Why Our Conversion Rate Dropped From 32% to 7% — what becoming one link among many cost us.
• Integration Partners Get Paid Nothing — And That's Why Integrations Rot — why the host needs a share.