Affiliate marketing is something a ton of companies talk about, but not all companies are ready for. How can you tell if your business is ready to take the plunge?
What is Affiliate Marketing?
Affiliate marketing, in its simplest form, is an arrangement where an online retailer pays commission to an external website/professional for traffic or sales generated from its referrals.
What makes affiliate marketing particularly appealing is the way commissions are set up. In most cases, companies pay on a CPL (cost per lead) or CPA (cost per acquisition) basis. Meaning, affiliates don’t cos you anything unless they give you a real lead or real customer.
Affiliate Marketing is Great For:
- Boosting traffic to your site
- Increasing sales
- Generating new customers
In short, when done correctly, affiliate marketing can be a cost-effective and extremely valuable channel for driving new sales and customers. However, as easy as it sounds, it can be quite difficult to get right the first time and relies just as much on the company as it does on the affiliate. Not sure if your business is ready?
Here are a few ways to see if you are
Affiliate Marketing Requires:
A clear goal: it’s easy to say that you want to drive more traffic, but it’s important to make sure your eCommerce store is ready for it and that you’re driving it to the right page. Affiliates are pros at driving traffic and referring new customers to you; it’s still up to you to drive them to the right goal/page. Do you want sign ups, sales of an individual product, leads, etc.?
A strong eCommerce Product: every business wants to skyrocket from the get go, affiliate marketing is better suited for companies that have some existing business and are ready to expand their sales. The easiest sales are with strong, easily consumable e-commerce products.
Keep in mind, affiliates have limited space on their sites and want to earn maximum money per transaction. Therefore, the stronger your page and product are at converting - the more money they make, and the happier they are.
You know your target: each affiliate has their own distribution channels and publishers they work with. More importantly, each affiliate knows their audience and will be promoting to them. Be sure to choose an affiliate that aligns with your company’s target market. The stronger the alignment between who they target and your ideal customer, the more likely you’ll both succeed!
A budget to play around with: because affiliate marketing is an entirely new marketing channel for a lot of companies, it's important that you’re prepared to play around a bit. In some cases, affiliate marketing is strictly pay-for-performance however, in other situations it can require a little bit of time to develop and design assets for your affiliates to use correctly. Allocate some budget to making professional or customized banners/ads for them to use, and you’ll quickly realize which messages are working.
A good offer: affiliates are professionals and typically have a going-rate or expectations. Be sure to create an offer that fits both the needs of your company and satisfies their commission expectations. Don’t be afraid to test out the waters or ask potential affiliates what they’re looking for/why they didn’t accept your offer.
No single affiliate reward or program is the same, so feel free to experiment with developing multiple offers depending on your type of partner and their expected returns
Your site is optimized for conversions: Unless you operate strictly offline, be sure to optimize your website for closing sales. Since you don’t have a preexisting relationship with affiliates, it’s important to do your part of building your relationship.
You’re ready to track: affiliate marketing is a numbers game. They’ll want to see their conversion rate, and you’ll want to see how well they’re doing. Using custom referral links, tracked URLs or UTMs can make a world of difference when it comes to proving your ROI and optimizing your affiliate marketing spend.
You have a content marketing strategy: If you don’t have a blog, any form of consumable media, or a social media presence - you should always start there. Building up a strong content marketing strategy beforehand creates lots of credibility for your product. While content marketing is great for promoting your brand, it also helps to seal the deal with potential affiliates. Affiliates care about making money themselves and therefore choose companies that have already started to build online presences.
Not to mention, if you already have content available, you could even find ways to leverage your affiliates blogs, cross-promotional partnerships, or work to support each other’s content strategy.
You’re excited about it: There’s no substitute for a team that’s prepared to do well. Affiliate marketing is a great way to increase sales, but it does require some management and determination. Your success is directly dependent to the amount of time you’re willing to put in to set up, manage, and improve your strategy. Affiliate marketing isn’t a set it and forget it solution; it’s a solution built on relationships and commitment.
While you may only pay for CPA or CPL basis, you will need to invest your time into improving your assets, engaging your affiliates, and optimizing your website to convert your new traffic. Developing these strategies and improving your content takes time, and the more time you put in, the greater returns you’ll make overall.
In Conclusion Still on the fence about affiliate marketing? Take the time to break out what your goals are, if your site and messaging are ready, and if you have the time to set up a solid foundation. The greatest thing about affiliate marketing is once you set up your program, and create your assets - you’ll open a floodgate of valuable feedback and data to digest. Moreover, the more you focus on dissecting that data and rewarding your affiliates, the better your program will become over time.
Although affiliate marketing isn’t for everyone, and it isn’t an overnight success - it can be a huge boost for your company’s bottom line. Affiliate marketing is not only a new channel for many businesses, but it’s an extremely cost-effective and feedback intensive process that many businesses can benefit from.
Need a little time or have any questions? Shoot us a message - we’d love to help you decide what type of program fits your company’s unique needs.