Business development deals are notoriously time-consuming and difficult to scale. Teams tend to focus on one big, highly customized negotiation at a time, limiting their ability to ramp up digital deals with midsize and smaller partners — especially when payout is performance-based.
While this approach may appear cost-effective, companies taking such a manual approach to biz dev leave money on the table. By using an affiliate marketing model, businesses can create scalable strategies and capture more biz dev and partnership opportunities without reinventing the wheel each time.
The transition from traditional biz dev to affiliate-inspired models is simple. In both, you’re creating performance-based, mutually beneficial partnerships, but the latter provides better tracking, payment reporting, and attribution.
Consider this example: A biz dev or partner specialist at an online stationery company does a contract-based deal with a popular baby store to place a custom coupon in its catalog. When the coupon campaign ends, the stationery company creates a manual report based on how many customers redeemed the promotion. Weeks later, the baby store sends an invoice to the online stationery company, which then pays by check a month later. At the year’s end, the online baby store must send the stationery company a 1099 tax form for its earnings.
This is a common setup that actually aligns closely with affiliate marketing; the partner (baby store) earns money based on how many people it drives to a particular product or promotion.
A main difference is that traditional biz dev relies on a manual process in which representatives hand-manage every aspect of a deal. As a result, biz dev teams typically can only focus on those “big fish”-type partners. They simply don’t have the technology, time, resources, or bandwidth to manage more than that. They might know an affiliate program could handle many of these functions, but they don’t want to pay large performance fees to a network — especially for deals they originated.
Affiliate technology enables companies to automate contracting, performance tracking, and data capture. It also streamlines their communications processes, allowing them to cultivate more brand-aligned relationships.
Although many companies already incorporate affiliate-model elements into their partnerships, they haven’t necessarily integrated them into their biz dev and partner strategies yet. But as businesses seek greater flexibility in their partnership terms, they’ll increasingly adopt affiliate tactics.
Using an affiliate marketing automation platform frees up the biz dev team to focus on creating valuable new partnerships rather than having to manage and track what they currently have. This approach also serves as a motivator for biz dev partners, as they can see how they are doing in real time.
Of course, not all elements can be automated. The process will still require people to manage the partnership program, recruit and coach new partners, and offer resources to improve affiliates’ performance.
The greatest benefit to structuring your partnership program with an affiliate framework is that it allows the biz dev team to focus on the biggest partners and the customization they require. At the same time, smaller and midsize partners can be engaged through scalable, automated onboarding and relationship management systems. It’s the Pareto Principle in practice, with 80 percent of results coming from 20 percent of input.
In biz dev terms, this means 80 percent of sales are generated by 20 percent of clients. The affiliate framework allows you to cater to that top 20 percent while maintaining momentum with the other 80.
If you’re like most leaders, you’re constantly looking for ways to add performance-based partners without having to recreate the wheel each time. Which parts of your biz dev strategy might benefit from more automation and scale?
Robert Glazer is the founder and managing director of Acceleration Partners, which was ranked No. 4 on Fortune’s 10 Best Workplaces in Advertising & Marketing and No. 5 on Great Places To Work's Best Workplaces for Women. Acceleration Partners is a performance marketing firm focused on online customer acquisition for growing consumer and e-commerce companies. Robert was named to the Boston Business Journal’s 40 Under 40 List and was awarded the 2016 SmartCEO Future 50 Award. Robert believes in the power of giving back and has served on the board of directors of Big Brothers Big Sisters Massachusetts Bay and on the global leadership committee of EO (Entrepreneurs’ Organization). He also founded the Fifth Night charitable event. You can read his Friday Inspirations at fridayfwd.com.