Mastering The Influencer Affiliate Flywheel — Yash Chavan | Why Brands Fail Influencer Marketing, Why Influencers Drive Hidden Demand, How An Influencer Affiliate Hybrid Works, What Makes Affiliate Models Powerful, How To Build Creator Partnerships (#473)

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00;00;00;01 - 00;00;18;03
Unknown
You're paying for views. Google is maybe better because you're paying for clicks, so there is at least some interest there. Yeah, is even better because you don't pay for views. You don't pay for clicks. Nothing matters except the sale. You only pay your your your cost of acquisition happens once you acquired the customer. Right to that. Okay, I acquired $100.

00;00;18;03 - 00;00;28;00
Unknown
Customer I pay you 20% $20 affiliate commission. It's one of the most dream channels that brands can have.

00;00;28;03 - 00;00;50;21
Unknown
Hello and welcome to another episode of the eCommerce Coffee Break podcast. In this episode, we are talking about influencer and affiliate marketing. Now, most brands don't have an influencer problem. They have a strategy problem. They're sending out free products, paying for posts, and hoping something sticks. But the results just aren't there. So the real question is, how do you get from just another unknown brand to one creator's actually talk about to break this down.

00;00;50;22 - 00;01;15;23
Unknown
I'm joined by Yash Chavan. He's the founder and CEO of SARAL. Yash has built and scaled influencer programs from scratch, worked with thousands of creators, and now helps e-commerce brands turn influencer and affiliate marketing into a predictable growth engine. So let's get started. Just great to have you on the show. Thank you for having me. Excited to speak to you and your audience about influencer affiliate marketing and also a special news to share.

00;01;15;24 - 00;01;38;10
Unknown
So yeah, I'm very excited to talk. Cool. Let's start with influencer marketing. Sarel is very well known for this. Why do many brands still get influencer marketing wrong? Oh, So many. I think there are so many answers to this question. On the root level, I believe that most brands still don't understand the impact that influence has on sales.

00;01;38;10 - 00;02;11;29
Unknown
And I say influence, not influencers. I think often brands are stuck in this in like an old school, maybe performance marketing oriented ways of tracking performance for influencer marketing. So things like last click attribution boosting with paid ads, for instance, like all of this basically tracks influence in a very myopic last click. You know, they would like attract who click the link and then bought the product, or they would track, whose discount code was used on Shopify at checkout to then attribute sale to the creator.

00;02;12;01 - 00;02;38;10
Unknown
But honestly, it's so hard to track and measure when five or 10 or 15 influencers boast about your brand. And then you see some incremental sales that weekend on your Shopify. Who exactly drove how much sales? It it's a little bit complicated, that whole attribution problem. And often a lot of creators who actually do the introduction to the brand, who do the nurturing and education about the products, end up not getting any credit.

00;02;38;18 - 00;02;58;16
Unknown
And then the creator who drop a code at the right time, they get all the credit for the sale. So often I think like because of a measurement problem, brands end up under attributing sales to influencers and then eventually either they make bad decisions and hence are unable to scale it, or they completely just stop doing influencer marketing because they think it's not working.

00;02;58;18 - 00;03;18;08
Unknown
But it is actually more like a visibility problem than it is like a strategy problem. Almost too often we've, we've observed, with the brands you work with. So I think like at a high level, that's what there's so many tactical errors. You could, you could make, make. But on a highest level, I think this is like one of the most fundamental issues that even you want to solve.

00;03;18;10 - 00;03;39;07
Unknown
Sorrell's I think there's was a very good overview and I can totally relate to this. I'm obviously I wouldn't call myself an influencer. I'm running a media company. But, obviously I also get a lot of requests and yeah, which brings us to the next part of the affiliate marketing. And this goes off quite often hand-in-hand. But I want to start high level there.

00;03;39;08 - 00;04;08;04
Unknown
What kind of mindset shift do brands need to make? Influencer marketing and affiliate marketing work? Yeah, I think one of the main you cannot treat your influencers as if they were ads. Often brands get to the first milestone. Let's say, you know, product market fit 3 to $5 million in GMV. Typically they get to that first sort of base camp using paid media like they are running ads.

00;04;08;04 - 00;04;28;29
Unknown
They're really good at running ads. They have paid media teams or they have a person or an agency. So they're almost their mindset is fixed in this cost per click, very analytical way of looking at marketing. But influencer influence affiliate marketing is so creative, the impact shows up in so many different ways. It has so many long tail effect.

00;04;29;06 - 00;04;48;04
Unknown
How do you, for example, I'll give you a story. Actually, it's probably better. So here's here's the thing. We were working with a brand. It was a skincare brand, and they started working with us for the influencer program, and they started working with the Google Ads agent agency roughly at the same time. And so we started getting influencers to post about them.

00;04;48;11 - 00;05;18;16
Unknown
That program scaled really well. At one point they had maybe five influencers posting about them every single day. That is roughly 40 to 50 posts on a weekly basis. So they were crushing it with their program. Lots of awareness in the market, but still no direct, very minimal affiliate sales coming from that. On the other hand, according to them, their Google Ads agency was absolutely crushing it because the cost per clicks were low and there were a lot there was a lot of traffic, a lot of interest.

00;05;18;16 - 00;05;53;22
Unknown
Like it was unreal. The, acquisition efficiency, with Google ads. So what they decided was they stopped doing the influencer program and they continued the Google ads because to an analytical mind, in that mindset, it makes sense to look at both in isolation and then take that decision. What ended up happening, however, was all of the awareness that the influencers were driving stopped, which means the demand and the search just stopped, which means the world, the people who were warmed up by all these influencers, five people every single day, posting whatever product which warms the person up to Google and then click on Google and then buy all of that stock.

00;05;53;24 - 00;06;10;17
Unknown
Google ads started spiking in like three and a half, four months. They were back. They turned on their influencer program. So like that is the mindset. And that's like this brand was able to fix it. But that's the mindset that often a lot of brands approached us from is they would look at the numbers, look at the influencers as if they were ads.

00;06;10;20 - 00;06;30;29
Unknown
But do you have to almost start to look at them almost more towards like a top of funnel approach than like building and actually creating demand approach than like a capturing demand approach, which is typically how brands get to the first milestone. So I think that's like the primary mindset shift that brands need to make. I like this overall view because it's a marketing flywheel.

00;06;30;29 - 00;06;55;23
Unknown
Everything influences everything else. And yeah, seeing everything in separate pockets, so to say, hurts your brand, hurts your marketing. And I think that was a perfect example for that. Now, a lot of influencers get paid by sending out products or a flat fee. And obviously affiliate marketing works slightly different. Let's transition over into how influencer marketing and affiliate marketing work together.

00;06;55;25 - 00;07;22;19
Unknown
Yeah, a lot of brands you've seen and we've worked with over 500 brands, etc. and what we've seen is pretty much every brand wants that influencer to now be affiliate. Additionally, yet marketing was associated with, you know, email lists, coupon websites, shows, dogs like those sorts of, people now because all the attention is with influencers. Many brands want their influencers to act as affiliates.

00;07;22;22 - 00;07;42;00
Unknown
So that's like one major shift that we've seen so much like, think of it as a merger of influencers and affiliates in one, like the influencer is also the affiliate. And that that presents a lot of opportunity, because that means that you can basically reach tens of thousands of people effectively for free and only pay on acquisition.

00;07;42;02 - 00;07;58;15
Unknown
It's the most it's the dream channel because meta is in some sense the worst, because you're paying on a CPM basis, you're paying for views. Google is maybe better because you're paying for clicks, so there is at least some interest there. It is even better because you don't pay for views. You don't pay for clicks. Nothing matters except the sale.

00;07;58;18 - 00;08;35;11
Unknown
Only pay you your your cost of acquisition happens once you acquire the customer right to the back. Hey, I acquired $100 customer I pay you 20% $20 affiliate commission. It's one of the most dream channels that brands can have. So we are seeing a lot of brands actually turn that influencer programs into affiliate programs or at least have some component of affiliate, in the in how they compensate their influencers, because that also drives performance in the traditional influencer model where you just paid somebody a flat fee and it didn't matter, like how their content performed or how many views it got or how many sales it drove for you.

00;08;35;14 - 00;09;00;24
Unknown
Now, what brands are starting to do is like, hey, if I'm going to pay you, if you are, rate is $1,000 online, how about we pay you $700 and uncapped 10% affiliate fees? Reduces the upfront risk for the brand because they're paying 700 instead of 1000, and introduces uncapped upside for the affiliate because the more sales they make, which means the better content they make, the more money they would make.

00;09;00;24 - 00;09;20;16
Unknown
So they actually end up making way more than $1,000. And in many cases, which the brand is also happy to pay. So I think it's such a beautiful win win situation, for both the parties that more and more brands are moving towards this. And I think there's a huge opportunity there specifically for smaller brands without a big budget to work with influencers.

00;09;20;19 - 00;09;52;29
Unknown
Now, how does a strong long term creator relationship look in a perfect world scenario? Yeah, often especially. So let's talk to smaller brands if because if you're a big brand with a big budget like you can make mistakes and be fine with it and you because you have this padding of a of a large company, a large brand, a large budget, if you're a new brand listening to this and you want to figure out a nice profitable acquisition channel, I would make a list of 100 creators who post about your space, or 100 creators that your target persona listens to.

00;09;53;00 - 00;10;12;26
Unknown
So, for instance, if you're selling to, let's say, digital nomads, then you should start talking to like, hey, who's talking about traveling, who's talking about different countries and like the visa situation and then blah, blah, blah, like find these different segments of people that your ICP listens to. Once you make a list, reach out to them, offer to send them a free product.

00;10;13;01 - 00;10;33;20
Unknown
Okay, they're a new brand, but up and coming. Happy to send you this free travel backpack, right? That's like very friendly for tech or whatever your product is. Like, hey, I'm going to send you my travel backpack. If you like it, you can post about it. If not, that's completely fine, right? So you can make an offer. A lot of influencers, if you reach the right people, are going to accept this because they have nothing to lose.

00;10;33;20 - 00;10;50;08
Unknown
Like the worst case, they get a free product. Best guess they have a partnership with someone, so the influencer doesn't really have anything to lose. You see a lot of success with this as a small brand. Send your products out to influencers. Some of them are naturally, if you did a good job at selecting the people, they're going to like it.

00;10;50;14 - 00;11;07;21
Unknown
They're going to ideally post about it. The people who post you should turn into affiliates, and that's where I start answering the long term component of your question, which is how do you make these long term? So like here, most brands stop at just sending the free product. So they would do this product seeding gifting. And then they would just stop at that.

00;11;07;21 - 00;11;27;19
Unknown
And then they just have they just keep gifting keep gifting keep gifting. But it goes nowhere. Like you're not building a program. Here's how you build a program. You build a program by the people who gift the people who you gift off of those. Some of them are going to post turn the posters into affiliates. Tell them, hey, you've already posted about us for effectively free.

00;11;27;26 - 00;11;48;23
Unknown
Why don't I give you 20% of a cut of the sales that you drive? If you like the product, you're anyway making content you can just naturally incorporate this. My backpack in any form of content you want. Link to your affiliate link and boom! Like whenever you drive a sale, you make money. I make money. That's a very no brainer offer to make to somebody, especially somebody who likes your product.

00;11;48;25 - 00;12;09;22
Unknown
Boom. Now you have an affiliate program and you now start nurturing these relationships. Eventually you could do more advanced things like this. Your affiliate program, give them bonuses upon reaching like, hey, once you cross $3,000 in sales, you get extra like, like a $500 bonus or something like that. Or once you cross $10,000 in sales, now you're a special affiliate.

00;12;09;22 - 00;12;31;07
Unknown
So instead of 20%, you get 30%. You can keep building these programs. But fundamentally, if you're a new brand, start reaching out to 5000 people in your niche. Give them a free product. The people who post turn them into affiliates, and then basically build incentive models that keep them posting. So yeah, very good overview. And Serrano is very well known for influencer marketing.

00;12;31;07 - 00;12;50;07
Unknown
And obviously there's a lot of moving parts. And doing this was a Excel spreadsheet probably is not a good idea, but having a platform to help with influencer and affiliate marketing is definitely helpful. Tell me about there's a new product that you're bringing out and that helps with basically both of them. What is it? How does it work?

00;12;50;07 - 00;13;15;06
Unknown
Yeah, yeah. Good questions. Happy to announce this. And yours is one of the handful of podcasts that, that get this announcement. So really happy to share this with your audience. Launching a new product called Saathi Society means companion in Sanskrit, and that's why we're launching it. And it's called Saathi because we want to position a, because the word affiliate, tends to be very it's just sounds a little bit icky.

00;13;15;06 - 00;13;38;02
Unknown
It's associated with these like sometimes scammy affiliates and so on. You want to reframe them as companions because you are, like I said, a lot of influencer led brands are turning their influencers into affiliate, and affiliate tends to be a little bit of a niche. Keywords. Companions, in my opinion, is a better word because you want them to be there throughout the journey throughout, like for a long term, for the long term.

00;13;38;08 - 00;13;59;02
Unknown
Right? So that's that's what we're launching. It is an affiliate. So I'll tell you why we're launching it. We're launching it because actually we saw this problem. Write five influencers post about you. One person's link or discount code is used to buy. And then that person gets all the credit the other for. Don't get the credit. On the flip side, we saw a lot of code leakages, a lot of fraud.

00;13;59;04 - 00;14;14;23
Unknown
A lot of people who would buy their own products and get commissions for them, a bunch of things like this. Right. So like there's like two sides there. On one side, you are under attributing sales on the other side, you're like attributing sale through coupon codes that are not actually even real sales. That would have happened anyway.

00;14;14;23 - 00;14;40;03
Unknown
So we wanted to build and no affiliate platform addresses these issues. So we wanted to build a platform that helps brands through real incrementality see which sales are happening, who's driving them, and so on. And there is a bunch, I'm happy to talk about them, but there's a bunch of features like it doesn't rely on attribution. Tracking is cookie less so even if, there are no cookies or some yes, cookies disabled, it still works.

00;14;40;03 - 00;15;02;00
Unknown
So it's more robust. There's an AI fraud agent that tracks if a coupon has ever leaked, and flagged that order. It tracks if somebody is ordering using their own code, it tracks if someone's driving, fishy traffic patterns and so on. So a bunch of things like that, it's really complicated and advanced. Helps brands build a truly robust, measurable, defensible program.

00;15;02;00 - 00;15;38;18
Unknown
I think that's something very important that you address. There is like the fraud component of people trying to trick the brands. So, I think that's something that really if you can address this and soft as brands will be very happy to hear that now. Yeah. Yeah. Literally like we were doing like a good anecdote. We were doing some beta tests recently and one of the brands connected and we discovered they had $40,000 in sales and some like, I think 8 or 9 K in commissions for one influencer affiliate who has, I think like 3.5 K followers on Instagram.

00;15;38;18 - 00;15;58;11
Unknown
So not super big. And then we were like, hey, what's going on? So then we got them on Saathi and then boom, like there you go, Sati, the fraud engine got the flag. It flagged the coupon code like it found where it was. It was on three coupon sites. And then they figured out that all of the commissions, the nine Jain recorded commissions were all fraudulent, like they would have happened.

00;15;58;11 - 00;16;15;05
Unknown
Anyway, it was all from a coupon site. The influencer hasn't promoted them as much. They've made maybe 1 or 2 post as well. So, you know, like literally thousands of dollars in potential fraud that goes just unnoticed and brands lose money on this and then obviously like their Roas goes down because you're paying more and not getting as much.

00;16;15;12 - 00;16;38;27
Unknown
And so yeah, you're right. Like it's super powerful, especially on the fraud side. Yeah. I think our listeners will be happy to hear that. But you can solve this issue because I think a lot of brands have had this experience that they had, like rotten apples under it was influencers in their campaigns, and now they can finally address this and have a clean flow that is managed from a dashboard.

00;16;38;29 - 00;17;06;24
Unknown
Talk me through the onboarding process of a new user. How does it work? How many steps are involved? How long does it take? Yeah, literally like less than three minutes. And you're set up with your first program. It's like again, we've got an AI onboarding assistant that will actually read the new sign up. Or when you install our app on your shop, on your Shopify, it'll kind of go through your products, understand the typical like price ranges that you're operating at, the category that you're in.

00;17;07;01 - 00;17;26;28
Unknown
And it will suggest, like, hey, you should offer 15% commission, you should offer 10% discount, or you should offer 50% commission because your, maybe like you're a cheaper product. So you want to give a higher commission. So their dollar value is higher, blah blah. So onboarding is super, super efficient and AI enabled. So in like 2 or 3 minutes, you sign up, you install the app.

00;17;27;01 - 00;17;47;13
Unknown
It's ready to go. And if you have your affiliate somewhere in a spreadsheet or in another tool, the migration is again, it's just like 3 or 4 clicks. You just upload a CSV that is again in the agent that reads your CSV, assigns it to the right affiliates and the data, and then boom! In the third click your you've migrated entirely and your program is ready to go.

00;17;47;18 - 00;18;04;22
Unknown
So yeah, okay. That basically also answered my next question would which have been is like, is there any kind of homework to do for the merchant for the brand? And AI agent basically takes the workload. How does the pricing structure work? How do you charge for this. Yeah. So it will be. So we actually have a launch special going on.

00;18;04;22 - 00;18;26;28
Unknown
The actual pricing is 299 per month for the lowest plan called Amber. Then we have the middle plan called blaze that is 499. And then the highest plan called wildfire and that is 999. But everything is a 20% off for the launch month. So if you sign up in April, like from the middle of April to the middle of May, you get a 20% off on every single plan.

00;18;26;28 - 00;18;44;28
Unknown
So that's how that's how our pricing structure works. With that said, every plan comes with most of the things that you need to scale. So if you're a new brand, you're just starting out. You don't need the advanced AI fraud handling like your records are not leaking. You first need to make the code that would leak in the future, right?

00;18;44;28 - 00;19;13;10
Unknown
You need to go grow and scale your program so every plan has pretty much everything you need with the higher tier plans. Having enablement for more team members, more collaboration, more access control, advanced fraud handling, more AI credits, things like that. But yeah, one of the one thing I don't think this is this you've covered this on your podcast or newsletter, but Instagram recently announced that they are going to allow linking to external sites inside of rails.

00;19;13;14 - 00;19;33;22
Unknown
What that means is before, when the only external link that was allowed on Instagram was on stories. So a lot of creators added their affiliate links on stories, which was great. It used to get clicks and conversions and sales for brands. But, but, but stories disappeared in 24 hours and there was only so much creativity you could do in a story.

00;19;33;22 - 00;20;00;28
Unknown
Because a chart, sometimes it's only a picture, so you can't sell the way you would sell in a reel. Now what's out? And stories don't go viral. Stories don't reach as many people. Maybe only 10% of their audience is the story, but a real could literally go viral, right? Instagram is now our external linking on reels, which means your influencer affiliates can make reels that have the potential to go viral and have a link to your store in the reel, which the customer can click and buy.

00;20;01;03 - 00;20;24;17
Unknown
That I think is going to be huge. And a lot of brands, even if you like, don't use social or safety like do some level of influencer marketing starting Q2, Q3 onwards, you build that community, especially going towards like the the Q4 BCM season, you're going to make a lot of sales. I think it's like, it's one of those early opportunities which if you just capitalize, you can end up making a lot more money.

00;20;24;17 - 00;20;40;26
Unknown
So I think that's like a good heads up use that I dropped before we before we end the recording. So yeah. Yeah, just thanks for sharing. That's definitely a gold nugget. And as it is in the internet marketing world, the ones who start first with new features are the ones who take the biggest wins away. Very good. Yeah.

00;20;40;26 - 00;20;58;08
Unknown
Where can people go and find out more about you? I'm on LinkedIn, search my name or if you want to check out the new product, it is my studio. I'm sure Klaus will, leave leave the link in the show notes, but it's my sad, I, I oh, if you want to go check it out again, all prices are 20% off.

00;20;58;08 - 00;21;16;10
Unknown
So if you're interested, if you want to take advantage of the influencer affiliate wave, go sign up. It's a free trial. So at that you don't have to pay and just get a free trial. Test it out and then I'm happy to help you or to just advise on your program. So DM me on LinkedIn. Sounds good. I will put the links in the show notes as always, and then you just want to click away.

00;21;16;12 - 00;21;30;13
Unknown
Thanks so much for giving us an overview of what's happening in the world of marketing and how you can get more out of affiliate marketing, and I hope a lot of people will click through and check it out. Thanks so much for your time today. Thank you. Was great. Taking a coffee break with two class