Affiliate marketing is one of the best ways to leverage word of mouth to grow your brands, but is often incredibly challenging for CPG brands to properly execute. I invited on Krik Angacian, a two-time CPG founder (Protes and CandyCan) with one exit under his belt. He most recent founder of CPG Affiliate Partners LLC where he helps brands traverse the convoluted affiliate marketing space.
We break down why founders often fail and the 5-step process on creating a successful affiliate strategy
Startup to Scale is a podcast by Foodbevy, an online community to connect emerging food, beverage, and CPG founders to great resources and partners to grow their business. Visit us at Foodbevy.com to learn about becoming a member or an industry partner today.
Jordan Buckner: [00:00:00] Affiliate marketing is one of the best ways to leverage word of mouth to grow your brand, but it's often incredibly challenging for CPG brands to properly execute on it. So I invited on Krik Angacian in a two time C P G founder. With one exit under his belt. He most recently founded C P G affiliate Partners, where he helps brands traverse the convoluted affiliate marketing space to really give some insight into how to make this work for your brand Krik.
Krik Angacian: Thanks. Appreciate the time and I'm excited to talk to you about all this.
Jordan Buckner: Excellent. So I'd love to start off talking about what you learned as a CPG founder in terms of what are some of the best ways to grow your brand and game awareness, because that's really hard and really expensive.
Krik Angacian: Yeah, so I've been in CPG for nearly 15 years now. I started off as an investment banker. I supply and sell food companies. I started my first food company about 10 years ago. And that company got really big [00:01:00] Through influencer marketing and that was very big back then. It still is, but it kind got so much saturation now and consumers don't really find that as valuable.
Cause they, every influencer is hawking so many different products. So it's like, how do you really find value? And then also tracking ROI on that is so difficult. My most recent company is a candy company and that company. Got, we launched at the worst time during iOS changes and cut figures, customer acquisition costs went through the roof.
So we realized pretty quickly that c p m cost per impression was broken. How do I go further down the funnel? C p a cost per acquisition, also called c p s cost per sale, and we got into affiliate. And that channel is very convoluted. But after over a year of running that traffic, I became an expert in it.
And I've honed my own agency for over a year. So I've been doing affiliate traffic in this kind of comprehensive manner for over two years now.
Jordan Buckner: That's awesome. And you know, just , as you talked about that, one thing that I realized as a founder as well is when you try to do every different marketing channel for your [00:02:00] business, you're not gonna do any of them well.
And it really takes like a dedicated time, at least like three months to dive in, to learn a system and process in the setup systems to keep it going or else it's just not gonna be successful. And it's similar with affiliate, I think. There's, that's right. A reason a lot of people get this stuff wrong.
Krik Angacian: Yeah, no, and I think that I'm an anomaly in that, like I realized it pretty early that Facebook and Google were not working. I didn't raise a ton of money. I wasn't willing to put any more of my own cash in, so I went all in and all the agencies were like $15,000 a month to go for an affiliate marketing agency.
So I went all in and learned everything and anything I could about affiliate marketing was either that or go under, and I first four months was a real mess. I got hit with a lot of fraud. I didn't know how to do IP scoring post controls. I didn't know who the right affiliate partners were. I didn't know who was taking advantage of me.
I didn't know what a good offer looked like. So it took me a long time, but after four or five, six months of it, I started getting really good at it. Started really understanding the industry and the offers. And then [00:03:00] I had some friends in the C P G space ask me, Krik you teach me how to do this?
And I found out how to see Eureka moment. I can make an agency and help other brands. And that's kind of where I am today.
I love that.
Jordan Buckner: I did a little bit of that with Amazon too. Like I dive into Amazon cause that's this whole complicated ecosystem. And then once you learn the things, it's fairly easy to replicate.
But just doing it the first time , is wild.
Krik Angacian: Yeah. And it takes a ton of bandwidth as well, right? The amount of time, effort. Right. And then it's, unless you have your own brand and product to do it, like you're not gonna learn it. So it's very difficult and just like time intensive.
Jordan Buckner: So gimme a breakdown of how you define affiliate marketing and how it's similar but different than influencer marketing.
Krik Angacian: Of course. So my first company, I chips and popcorn brand. We invented the protein chip. We thought of affiliate as influencer marketing. Give a discount code to an influencer and they, anytime a sale comes through it, you get that attribution through Shopify's discount codes, and then you give a cut of the sale, right?
That is technically affiliate marketing, but it's such a small piece of it. Affiliate marketing really means, Anywhere that a sale occurs, or not even [00:04:00] a sale, you can also do as a click or even an impression, and this attribution gets sent back to a partner. Technically, Facebook can be considered an affiliate marketer.
And people do affiliate marketing on Facebook. So I run ads on everything except for Facebook and Google because quite honestly, everyone and their mother already does that. So I run ads on apps, games, email list influencers mom blogging website. Healthy eating websites, native ads, everything I run and I only run CPA because for me that is the most effective.
I'm very risk averse, so that's the least risky. You're only paying if there's a sale, and I think that's incredibly powerful that not enough brands are taken advantage of.
Jordan Buckner: So why do most founders then fail at affiliate market? I know you said it took you like four months to really figure it out and even a little bit longer, but like, what are some of those big hurdles that you ran into?
Krik Angacian: Yeah, so Facebook's relatively easy. Google's relatively easy. You push a button and it's kind of done for you. Affiliates don't like that. You have to understand how to make tracking links. You have to understand how to make post backs. [00:05:00] Then if you get that basic level, Affiliates got kind of a dirty word to it because there's a lot of fraud in affiliate.
In the past, 10 years ago, it was really bad Past three, four years, it's really cleaned up, but you still need to do fraud prevention. So that includes like IP scoring, postback control, throttling traffic. You have to know these things. And on beyond that, you have to know the affiliates. You have to build these relationships, and that takes a lot of time.
Effort. And also if you don't do it right, you can have chargeback issues. You can have fraud issues that kind of mess up your Shopify account. So it's not something I recommend brands go right into and finding a guy like me isn't, there's not a lot of guys like me. The most real affiliate marketers, what they do is they run something called C P L Cost per Lead.
And there's more money working with insurance companies, legal firms solar, et cetera. But for me, I'm been a CPG guy my whole life in my whole professional life. It's what I know, it's what I understand. It's a network I've built. So I'd much rather help brands that are kind of better for [00:06:00] you in this world.
Jordan Buckner: So let's break down then the steps to actually build a successful affiliate strategy. I know this is something that I always harp on, but is really around like setting clear goals is the very first thing because I think that's where a lot of founders get messed up. They're like, cool, I'm gonna turn this on, give some people some kickbacks, and of course they're gonna abide from me right away or promote me.
But what do you really kind of mean by like setting? What are some of those goals that founders should set in for their expectation.
Krik Angacian: Yeah, I mean there's, everyone wants to increase their sales, right? But there's so much more than that, so, I say, are you trying to drive subscriptions? So a lot of people will run what I call a sample, the rebuild model, which is like the Dollar Shave Club model.
It's like you get in for five bucks just to try it out, and if you like it, you have a full size pack a month later that became famous and popular to that model. And I only recommend that for brands that are really subscription kind of products. There's brand awareness stuff. So where you can run a trial pack.
For just try for two, three bucks and you're getting a customer with high intent. So that's a really good campaign. [00:07:00] I run a lot of that kind of stuff. Or you're trying to build an email list, things of that nature. So understand what your goals are, and that kind of ties into offer creation. You want to create an attractive offer for the affiliates, whether that's a.
20% off on this full pack thing or is it a trial pack? Whatever it is, it's gotta be attractive because although you're bidding against way less brands and companies than say Facebook, cuz everyone their mother is running ads on Facebook. And there's way less people running ads on these other kind of affiliate partners.
You're still kind of competing with them and you still wanna create an attractive offer. That's gonna convert and it's gonna sell. And their CPC cost per click or EPC for them earnings per click is gonna be at.
Jordan Buckner: So let's look into that offer creation a little bit more, because as you know, the problem with food is most like products, right?
They're sell for four or five bucks or even less in a single pack. So brands always end up bundling, but even then, , laboratory value is somewhere between 20 and 50 bucks. And so even 20% of 50 bucks is only $10. And so [00:08:00] it's not always like the most attractive thing for affiliates if they're selling something that's like $1,500, like a couch or something, or a small couch, and they get 150 bucks for a similar amount of work.
So what are some of those issues around like C P G offer creation that you see is like really effective and how you set those offers up?
Krik Angacian: Yeah, so there's a lot of different ways you can do this., what you're kind of talking about. That's a rev share model. So like they wanna see a very expensive product and they can get a percentage of the cut.
I run what I call more of a CPA flat fee model, where there's a , higher conversion rate, you're paying a lower CPA, but you're getting a ton of eyeballs, a ton of purchases, and you're getting a customer with intent who's purchasing quite a bit. And that's the end of the day, what you , want to get.
And the biggest thing is retention. It has always been retention. Getting the first purchase on shelf right, is about packaging, but then it's about repeat orders and velocities. It's the same thing in affiliate. You kind of want to create an attractive offer, but then you want to, cultivate that customer to come back, whether that's with email flows, sms, or even what I consider like middle of the funnel, [00:09:00] bottom of the funnel.
Retargeting on Facebook, I affiliate, especially for the type I do, is really, really good for top of the funnel lowering NCA new customer acquisition calls, which is quite honestly the most expensive thing on Google or Facebook. So, If you're able to supercharge your campaign with a trial offer for really cheap CPA or CAC on affiliate and then retarget on Facebook or Google in middle of the bottom of the funnel, you can have a very attractive program very quickly.
Jordan Buckner: No, I think that's important. And so when you're thinking about that offer as like a flat fee for food brands, I know it's gonna kind of vary, but like what's the dollar range that typically falls into?
Krik Angacian: So there's a range right? Two to $5 offers. I see if there's no rebuild, right?
The sample of the rebuild, if there's no rebuild, I usually see 15, maybe $20. If it's not like a super mass market product if it's a very mass market product, then you can get away 15 five to 10, you're looking at 25 ish. Anything above, like anything 10 to 20, you're looking at [00:10:00] like 30, $40. And that's just pure conversion rate stuff.
You go on Facebook, you're gonna be seeing. At least 25, 30% higher than that. And you're just getting customers for way cheaper. That's why these offices are really attractive to me. Like I run a four for four on an energy drink company. $4 for four cans. They just raised a bunch of money.
They're trying to get as many people to try their product as possible, and then they're only running that at 15 bucks. So , they're acquiring customers. Super. And then they're retargeting them and they're sending emails to them, and that's a really, really good customer. You know, the old saying, cans and hands, like you go on the street corner of New York City and they're handing out Vita Coco or C4 Energy or something like that.
That's kind of gone away cuz there's no customer intent. Like what's the likelihood of me going on the website or repurchasing that plot. It's super low. But if you're running a sampling program, But supercharged with purchase with and a purchase intent. Someone's clicking on the ad or the banner site, whatever it is, they're going to your website, they're reading about it, [00:11:00] then they're going through checkout, credit card, email, all that good stuff.
The likelihood of them repurchasing is so much higher. That's why the cans in hand goes away. And that's why like these purchase trial kind of offers cuz they do really well. And as long as you have decent retention track, it's like email, sms, and like follow up flows. You can really do well with.
Jordan Buckner: I think that's a really key thing with my brand TeaSquares.
I ran a free trial offer on our energy bars as you get like one of each of our three flavors. And it's interesting because when we first made it completely free, like free shipping and free product, we ended up on like a dozen of those free sampling sites overnight. We had like 1500 orders that weren't fraudulent, but they're from like these really sketchy sites and people.
But even simply as you mentioned, like making the. Two bucks, four bucks, just pay shipping. Like if someone has to pay even $5, it really filters out all the people who are just looking for free stuff. Right? Absolutely. Like if you, if someone who's just looking for free stuff, if they see something for five bucks, they're like, Nope, have no interest in this.
I just want it for [00:12:00] free. But as you mentioned, like the people who are like, ah, this is interesting. Like something I could try. Yes. Pay five bucks, bucks for, that's like what I would pay at the store even less than at the store. Cause they, you get rid of all the. Shipping and purchase barriers for online stuff.
Yeah. It really drives those people to consider.
Krik Angacian: I like that. Yeah. Cuz yeah, you're creating a little extra friction, but that extra friction's actually good because it gets away all the unwanted garbage and something else I will say. I don't like discount websites. Discount websites are just a race to the bottom.
People are googling your brand plus discount code. And for me, in my agency and just in general, I never recommend that it's just a race to the bottom. You're cutting your own margin. What I do recommend is a trial sampling program where you can run, and I always recommend my own client brands running on Facebook and run it with me and compare the caps.
It's always cheaper on affiliate, it just,
Jordan Buckner: And then the thing that you mentioned earlier, which is incredibly important, is that this type of activity is a top of funnel activity, right? And so we've [00:13:00] talked about this on the podcast before, but there's a couple different marketing attribution models. I like to think of it as a five-step process from starting at the top of awareness, consideration, decision, loyalty, and advocacy.
And the idea is that there's the most people interested who are hearing about you at the very. But the few people, viewer people at the very bottom who become like advocates or even loyalists to your brand. And as you mentioned, as a brand, you really need to optimize starting at the bottom of the funnel and working your way up so that everyone that is trying the product through one of these sampling programs, they have like the best optimized experience possible so that they're converting on the landing page.
They like once they get it, they have a great onboarding experience, a great unboxing experience. You're following up with them with automated emails and you have retention and loyalty and subscription driven offers that are going to them to really bring them a part of the brand ecosystem.
Otherwise, it's not gonna work if you're just expecting a one-time purchase.
Krik Angacian: Yeah, no, absolutely. And I have brands that come to me [00:14:00] and they're not ready. They don't have their email flow set up and I say, don't work with me yet. It doesn't make sense. Get that all lined up first because if you don't have retention, then running any sort of traffic outside of your own organic is not worth it.
Because you're gonna lose money handover fist. So it's all about retention, it's all about that follow up. And like I said, running with me or affiliate program, you're doing mostly top of the funnel stuff, which is the most expensive. Compared to Facebook or Google and Facebook or Google are really good at retargeting cuz of cookies and whatnot.
But they're really bad about getting new customers in and yeah, they can target. And it's getting better now because so many people have more opted in to getting retargeted, but still not great. It's still more expensive than it's ever been. And adding affiliate channel to your marketing matrix definitely makes.
Jordan Buckner: I like that. So we talked about studying clear goals and offer creation. How do you actually find the right affiliates
Krik Angacian: to work with? Yeah, I mean that's a tough one, and it really is because. Once you have a good offer, once you have a good product, you kind of set your goal. It is about going to market and [00:15:00] finance.
So there are platforms like share Sale, that have like a marketplace or impact. But you're not going to get very far just because they have a ton of people reaching out to 'em. So there's agency options out there. Most of 'em are 10 plus $10,000. And it just takes a lot of bandwidth. It really does.
But it's gonna be about just a lot of reaching out constantly. And it's not the easiest thing. And again, I've been doing this for two years, so I've kind of built up my network and I have economies of scale, so I've got about 20 brands that I work with right now. So like, people come to me more than me reaching out, which is interesting.
And I kind of bet them out one by one. So I have my own internal processes, but it is a big bandwidth suck. And I, I do understand there is limited. Capacities and capabilities when you're a smaller brand but there is value to it over the long haul.
Jordan Buckner: Yeah. I think the one value of getting a little bit of help with it is when you don't know the affiliates, you're working with them all for the first time, so you have no idea what to expect.
But if you like with you work across different brands and you can reuse affiliates [00:16:00] to say, Hey, this person has a really engaged audience that actually drives sales versus in this category, versus these other ones that we tried out and they don't.
Krik Angacian: Yeah, that plus there is still some fraud and affiliates, so there is like a risk.
So you gotta be able like to eat that and have a limited cap of what you're trying to spend, which is I think always smart to do. Even when I have my own clients, I always tell 'em like, listen, what's your cap for the month? Let me know. I'll try my best not to go over it. And which is sometimes difficult, like a mom blogger put something up.
And it goes over budget. Like it's hard for me to get it off the blog. You know, it's not exactly like Facebook. When you're running app traffic like I do, then I can just take the ad of the apps. Like I run a lot of ads like NBA two K or the Kardashian app. I run a lot of traffic on those places.
But when you start going to mom bloggers or an email list, like an email gets sent out, it gets sent out. So it's hard to stay within budget, but your fraud is much lower. Which is good. But also just finding like affiliates that kind of match your product line. I run a couple energy products.
I have a supplement line that I work with, which are two supplement lines, and I've got a great fitness app that when you're [00:17:00] on promo you'll get like 4 million of eyeballs on you and got a couple hundred orders over those couple days, which is really, really good traffic. But like Jerky Sticks is one of my companies and I don't put them on mom blogs cause that's not really like a natural fit.
But I put them on a Kardashian app. I have a home improvement app I , run that traffic on. So it's gotta be the right fit for your product market, you know?
Jordan Buckner: I love that. And so once you actually find them, how do you actually provide that ongoing value to them? I know that you, we already talked about kind of paying them the right fees, but like how do you build the relationship with them to maintain that overtime?
Krik Angacian: Yeah, so it's about just building that over time, but also like having an attractive offer, whether that's, I call it a hook. You have to have some kind of a hook. So whether it's a exclusive offer, I'm only giving you this bundle, or is it a, like a nice discount, like, hey, 20% off. Like, mom bloggers are the best for this.
Like, mom bloggers won't put anything on this thing. He's like, I have exclusive discount, 20% off purchase to purchase it while it lasts kind of thing. So that's why I like trial offers cause it's like very attractive. I like a good [00:18:00] hook offer like a 20% off, 25% off kind of limited deal kind of thing.
Or like a exclusive bundle. So the affiliates don't want just something that's on your website already. Like most of these trial offer things like they're, you can't find it on the website. It's a separate lander that goes to the shop pilots, the whole process. But it's exclusive and that exclusivity kind of makes the affiliates and the partners feel special.
Jordan Buckner: I love that. And then do you maintain like regular outreach to them to give them like ideas on like what to post about or how to talk about the products on an ongoing basis? Yeah,
Krik Angacian: yeah, absolutely. So when I onboard a client, I have an onboard checklist, and part of that is do gimme your brand guidelines, gimme a paragraph on your brand, what am I using?
What kind of. Like I put together native ads and banner ads for a lot of my things. My clients, I gotta make sure like they approve them and whatnot. And then I create Slack channels for all my brands. But beyond that, Skype is really big an affiliate. So I have a Skype for all my affiliates, which is really funny cause affiliate got big 10, 15 years ago, which was when Skype got big and nobody's migrated off it. So I'm on Slack for the CPG [00:19:00] guys and I'm on Skype for the affiliates. But you kind of gotta play in both.
Jordan Buckner: And then we mentioned this a little bit earlier, but how do you recommend going about tracking the performance of the affiliates?
Krik Angacian: You gotta have a tracking platform for whether you're using share sale. I use an internal one with U T M. So I do direct linking. And for me it's all about data. So I run on cpa. So if a offer doesn't perform right and you're not getting sales on it, that's actually not the worst thing in the world.
If an offer doesn't perform on Facebook, you're losing a ton of money. Cause that's cpm, you're paying for the impressions. But offer that doesn't perform on CPA is like, you're just not getting the sales, but you're not paying either. So it's very little risk. The problem there is you can't scale a program.
I can't show the KPIs and the data to another affiliate and bring it to them. So a good example is that energy drink company I work with first came to me, we did like a hundred, I think it's 111 orders. I actually know this number exactly. We're doing case studies. Right now we're rebuilding our website.
We had 111 orders first month and like, well that's great. Like you guys can do a lot more. Let's work on this second month. We tweaked something, [00:20:00] only did 35 orders. But again, like you're not paying me or anything. You're only paying for the orders. Those we're close. Something's off. We tweaked.
And we got it and we figured it out. This past month they did 1200 orders and like I was like, that's what it should be if you're doing it right, the offer makes sense and we get the right partners. It can be thousand, 2000 orders a month. I got one client in less than three months. We've driven nearly 6,000 subscribers for him.
Like his business is doing over a million dollars today. And that's in less than a year.
Jordan Buckner: That's amazing. And I love that you're going through like an optimizing with that because like you said, like the offers, they don't always make the sense the first outta of the gate. And if you see that decrease, you might be like, oh, let's just give up and focus on something else.
But if you stick with it, continue the tweak and find that right combination and that's how you find the success. Yeah. No,
Krik Angacian: And that's so interesting. My old brands, I remember I worked with performance marketing and I was only doing Facebook and we weren't doing. And they're like, you need to spend more money.
You're only spending $10,000 on your ad, $5,000 on ad, whatever it is. And I was like, this is crazy. I'm spending so much [00:21:00] money, I'm losing so much, and you're telling me to spend more because the date is not good optimized. And I'm like, this is broken. This is not work for me. And for small brands, it doesn't work.
That's why this affiliate model and CPA works really well cause. Yeah, , that Energy Dream company, it didn't work in the early days, but then we kind but they didn't lose money on it. And next month, yeah, they only 35 orders. But again, you're not losing money on the impressions. You're still getting thousands of impressions.
You're still getting thousands of clicks, but you're not paying for it. And that is why it's so valuable.
Jordan Buckner: Krik. I really appreciate you breaking this down and it makes a ton more sense to me. And so I think , this is awesome. And so, you know, I think for founders listening, if you wanna get into affiliate Krik, just , broke down exactly how to do it.
But no, it's gonna take four or five, seven months of your time really getting into it. But can be really profitable for you. If you don't have time for that, you're focused on other things, but really still wanna build this out, make sure you have an optimized marketing funnel at the bottom first and then Contact Krik.
Right? The good thing about him, which I really like [00:22:00] is he works with brands on a pay on sale basis, meaning there's no retainer. There's a small set up fee at the beginning, but other than that, you're only paying with sales that are coming in. So if it doesn't work, there's little lot of your pocket that's lost, and if it does, it can really take off.
So I'll include the link down in. Description as well, so you can get in touch and reach out to 'em to see if this is gonna be a good fit for your brand or not, and take it from there. Krik, thanks very much for being in on.
Krik Angacian: Yeah, I really appreciate it. I love the community and I'm a CPG guy first.
I've been a brand owner for many years, so I understand the trial and tribulations and what it takes to be successful in this space. Mm-hmm.
Jordan Buckner: And that makes a huge difference. Yeah.