An affiliate program is a great way to allow your existing customers, who we’ll call “friends and family” to become part of your sales team. It works by offering incentives, cash or credit to people who encourage their friends and followers to purchase your wines. There are multiple ways to facilitate this, through website plugins or multiple third-party services but today I am going to focus on a method that doesn’t require much technical skill or using a paid service. Affiliates are becoming very common in the online marketplace; most major retailers have programs that allow customers to register and receive custom links that track sales and pay them a commission for purchases through that link.
There are some pitfalls and the FTC does regulate affiliate marketing but the liability for anything that violates their guidelines generally falls on the “marketer” and not the business owner. While it is possible to offer store credit as an incentive rather than a cash payment, producers have to be careful not to violate the TTB rules against giving away wine. You can offer store credit or gift card as long as there are products for sale on your website that are NOT alcohol, or you state in the terms and conditions that the credit may only be used for up to 75% of the purchase of wine. See below for some easy steps to creating an affiliate program.
Step 1: The first step is to create a path for people to apply for your program, this can be done with a Google form or a form on your website. The following fields should be included: Name, address, email, birth date, how they intend to share the wine (with dropdown for friends or followers), what form of compensation they are looking for with dropdown (online shop credit, cash payment, exclusive experience like private tasting), number of followers per platform for Facebook & Instagram, and a text box to explain why they’d like to partner with you.
Step 2: Recruit, vet and assign codes to affiliates. Recruiting “friends and family” affiliates is generally done through an existing customer list, and by sending an email detailing the offer with the link to the application form. You can also advertise the program on your social media channels or website. Vetting your affiliates should be easy, existing customers who would like to share with friends should almost always be approved and offered a discount on wine to share. Anyone outside of your existing customer list to participate should be approved based on quality of content, number of followers and how they fit the brand, and should also be offered an initial discount. Once approved, each affiliate receives a unique discount code to track their sales.
Step 4: Create a spreadsheet to manage affiliate sales that includes their coupon code, number of sales and amount of each sale associated with the code. Also track the number of posts and engagement rate of each post, an affiliate may not have high sales numbers but could be worth working with for brand awareness if the engagement is great.
Step 5: Manage affiliates by reviewing content, tracking engagement, and sales. In the contract, each affiliate should have a 30-day window to produce sales before their coupon code is closed. Affiliates who perform well should be invited to continue the program; affiliates with no sales should be politely released, because having too many coupon codes to track on an ongoing basis can be overwhelming. My recommendation would be to start fresh with new codes and a new spreadsheet every 30 days but you can keep it running month after month if you’re getting good sales results and it’s easy to track.
Step 6: At the end of each month, you run a report on each coupon code that includes total sales and issue payments or credits to your affiliates. Store credit should be issued through a gift card BUT if you do not have products other than wine for sale on your website you must include a disclaimer that the gift card can only be used for up to 75% of the final purchase price because the FTC doesn’t allow producers to give away wine. If you’ve agreed to cash compensation, that should be issued by check along with reporting in a timely manner.
Affiliate marketing is a new and innovative way to sell your products that is catching on across industries. If you would like more information or help getting started, please email me at [email protected].