Having an effective marketing strategy is crucial to the overall success of your business.
That said, 63% of companies still feel their biggest challenge is generating traffic and leads.
To combat this, 70% of companies are committed to increasing their lead generation budget to expose their brand and products to new sources of traffic. One method growing in popularity for lead generation is affiliate marketing.
What is affiliate marketing
Affiliate marketing involves a publisher (affiliate) signing up to an affiliate program offered by a retailer (advertiser) to promote and sell their products on a commission-based payment model. The publisher promotes the products or services using a unique link, which sends traffic to the company’s website. If the lead purchases the product, the publisher is paid a percentage of the sale. From a business perspective, it can be thought of as a way of expanding the marketing team by hiring people through third-party companies who are paid only following successful sales are made.
Growing in popularity
In a world where businesses are being bombarded from all directions with different marketing channels and strategies, it may feel overwhelming to try and embrace a new advertising method. Yet, there are many reasons why affiliate marketing is a popular method for brands to grow.
Hand pick your partners
As a retailer, you can pick who you choose to work with. Affiliates apply to come onboard your affiliate program, providing you with the opportunity to assess their suitability and hand pick those who can be the best ambassadors for your brand and products.
All traffic is not created equal. If you sell spa products, for example, you don’t want to waste your advertising budget attracting people who are looking for car products. By working with affiliates who understand your industry and are already active in it, you will receive targeted sales from a warmed up audience. This makes it easier to maintain the relationship with your new customer going forward.
Pay for performance and sales
With traditional pay-per-click advertising, you are charged per click or lead sent your way. These leads then need to be converted into a paying customer, and there is no guarantee at this stage that will happen. In its simplest form, with affiliate marketing you only pay out when a sale is made, while also offering flexibility to pay publishers for influencing sales. If the affiliate marketing partner has an ineffective campaign, it won’t affect your budget. Whereas a poor PPC campaign that sends you low quality leads will still need to be paid for, even if you make no sales. This ensures your marketing is cost effective.
Paying for performance rather than for clicks ensures affiliate marketing is a low risk form of marketing. You won’t be using your marketing budget to create leads that need nurturing. Instead, you will create direct customers who you can then build relationships with and upsell to, at the right time in the buyer’s cycle.
Limited start-up costs
Starting an affiliate program requires some investment of time and finance, but is minimal compared to buying advertising and employing a team of staff. Working with a reputable affiliate network platform like Awin also takes the stress and time out of setting up the program, as they will guide you through the setup, carry out the background work and provide the tools and resources you need.
Grow brand awareness
Consumers like to buy from retailers they are familiar with, and will often spend more with a merchant they trust than go for a cheaper deal with an unknown label. Affiliate marketing allows small and large companies to grow their brand awareness by increasing exposure to new audiences who may not have previously heard of them. By working with a select group of affiliates, you can not only get your products exposed to new and different audiences, but you can create an awareness that could have the potential to extend beyond a single-product promotion.
SEO continues to be a subject close to most online retailers’ hearts. Affiliate marketing can go a long way to aiding your SEO, through numerous backlinks to your site via your affiliate blogs, social pages and websites. This is particularly effective if working with higher-ranked partners whose audience then share and tweet details about your product or brand.
Detailed statistics and data
Working with a trusted affiliate network to manage your affiliate marketing allows you access to a detailed dashboard and sales reports. Through this you can monitor your data and tweak based on your statistics. You can use the dashboard to effectively strategize and make marketing decisions elsewhere in your business, by tracking how your affiliates are performing.
Time saving on marketing
Marketing is one of the most important aspects of your business, yet it can be a lengthy process. If you don’t have an extensive team to manage this for you, it can take you away from the process of business development and more. Putting marketing in the hands of affiliates frees up some of your time, allowing you to focus on other things.
Creates valuable partnerships
When you work with affiliates, you are broadening your connections. This allows you to reach out to industry leaders and build relationships with influencers. If you are prepared to give them some time to build trust, they will repay it tenfold by giving exposure to your products and brand.
A different income stream
Never rely on one form of marketing. If anything happens to affect that revenue stream, your business could collapse within days. By using affiliate marketing alongside other forms of marketing, you are providing an extra level of protection for your business against issues outside of your control. Affiliates employ a vast array of advertising techniques, such as email, Facebook advertising, pay-per-click, guest blogging, influencer marketing and product comparisons, to ensure all avenues are covered.
Scale your business
If you are just starting up, or you are a small business thinking about expanding, affiliate marketing allows to scale your business at your speed and with minimum cost. You can test out new products and marketplaces through your affiliates and build your business at a rate you can control. In fact, 99% of people start their businesses using affiliate marketing.
Consumers trust their brand ambassadors
As it is reported 92% of consumers trust the recommendations of people, companies or influencers they know, working directly with affiliate marketers who then promote your products to their established audience offers more opportunities for quicker and more direct sales.
Access foreign markets
If your brand and products can be marketed worldwide, affiliate marketing is a cost-effective and efficient way to tap into that global marketplace. With professional affiliates based internationally, they can use their local knowledge to market your products strategically. It is also a low-risk way to find out whether your brand will be successful in other countries. Affiliates can also team up with affiliate networks to provide exposure for products and services to a truly international market.
Costs established upfront
Unlike some forms of pay-per-click advertising, when you are never quite sure how much each lead will cost you depending on the environment, you set your costs upfront. For each product you decide a commission rate, ensuring you know exactly how much each sale will cost you before it is made.
You are in control of incentives
Establishing costs upfront allows you to be in control of your incentives. You can also offer rewards and incentives as you see fit, to motivate your affiliates to stay loyal to your brand and sell more.
Leveraging different skill sets
Being able to access such a large pool of affiliates increases the skillset available. This in turn raises the chances of further sales of your products, as each seller uses their own skills to attract a different audience.
Good return on investment
According to statistics provided by AM Navigator, US affiliate marketing spend is approximately $5 billion annually, and worldwide over 80% of brands use affiliate marketing. The industry continues to grow as businesses see results on their sales.
You do need to invest some time into managing your affiliate program but if you set it up through an experienced network it can almost run itself. You can be as involved as you wish to be on a daily basis, or you can wait for the reports to come in of your sales. Of course, your level of involvement can be reflected in the performance of the program, and we often see greater increases for accounts that are more involved and active in the channel.
A large pool of affiliate marketers
With more and more people looking to start or grow their own business, affiliate programs are in demand. This has given rise to a large pool of affiliates to work with, which allows you to be more selective of who you partner with. You can choose to work only with the more productive and motivated affiliates, which not only will save you time, but will hopefully lead to better qualified leads and higher sales.
Marketing is tough, yet crucial for success. Affiliate marketing offers a flexible approach that is cost effective, easy to manage and has a positive impact on your business and brand as a whole. If you are not sure if it will work for you or your products, look at some of the brands already using affiliate marketing. Check if there are others in your industry promoting their message through affiliate marketing and then view the huge array of brands that are seeing big success with this form of advertising.
Finally, remember you can start small and think big. Affiliate marketing provides the same opportunities for all companies, whether you are a start-up with a limited budget, or a well-established brand looking for new methods of exposing your brand to more people.