Have you come across a merchant that offers commissions for referred sales? The merchant relies on affiliates to grow their business via referrals. It encourages them to market their product by providing a monetary incentive.
That’s affiliate marketing.
You can make money by establishing an affiliate program or becoming an affiliate. For this post, we’ll focus on affiliate marketing from the perspective that you’re a company offering one.
Indeed, many companies today offer affiliate programs. This number will continue to grow with Rakuten Affiliate Network expecting the US affiliate industry to grow to 6.8 Billion by 2020.
The growth shouldn’t surprise you as affiliate marketing is attractive for merchants and affiliates. Affiliates get an out-of-the-box product to sell and receive a commission. Merchants get access to new markets and increase their sales for a fraction of the cost. The affiliate does the legwork for you, saving you time and money. It’s simple, and you’d be crazy not to have an affiliate program, right?
The reality though is that there is, in fact, a lot to consider when creating an affiliate program. In some instances, it may be wise not to have one at all.
In this post, we share 3 of the most important things you need to know about affiliate programs. You’ll benefit whether you’re new to affiliate marketing or have an existing program that isn’t working.
Let’s get to it.
1. The Benefits Are Not Without Their Drawbacks
Affiliate marketing is attractive for many reasons:
- You’re able to get new customers at a low cost. You don’t have to spend large sums of money on marketing and advertising campaigns.
- You free up time and resources to focus on other important activities.
- You can better control your costs; you know exactly what it costs to sign up each new affiliate.
- You improve search engines rankings. Affiliates will include links in their emails to subscribers and on their site, which improves SEO.
But the benefits are not without their drawbacks:
- You can’t control how they promote your product. They may distort your brand and market it in a way that’s not inline with your brand identity.
- An initial spike in sales doesn’t always last. New affiliate programs arise that grab the affiliates attention.
- Paying out commissions impacts your bottom line.
So, you need to ask yourself:
- Do the benefits outweigh the costs?
- Am I happy having someone else promote my products?
- Do I understand that while I can control costs, I can’t control how they market my products?
- Is the impact on my bottom line justified by the benefits?
Once you’ve asked these questions, you’ll know whether an affiliate program is the right choice.
Let’s assume you’ve decided to create an affiliate program. Here are further considerations.
2. Affiliate Marketing Is a Long-Term Game
Many assume that setting up an affiliate program is quick and easy, and that managing one is even easier. That’s not the case. You must be willing to stick it out over the long term.
As Neil Patel mentions, “…there are 4 simple, yet not easy steps you can take,” if you want to become a merchant. These are: devising a product idea, validating of the idea, creating the product, and finding the right affiliates.
Let’s discuss each of these.
You Need a Product Idea
It doesn’t have to be something out of this world. It doesn’t have even have to be something original; you could research to find products and see how you could improve them.
The important thing is that the product solves a customer problem. For example, I’m a writer who’s considering launching an eBook about how to build a writing business. Why? Because I launched a writing business a year ago. I know through research that there are a ton of books out there on the topic.
But, what I do know is that my experience is unique, and I can infuse that into the creation of an eBook that I can sell through affiliates. I also know that because I launched my writing business a year ago I can connect well with beginner writers.
You Need to Validate That Idea
An idea without a market is useless. You should research the market to see if there is a demand for your product.
In my case, I’ve been writing long enough, have formed many connections, and have had many people reach out to me asking for help. I could reach out to those aspiring writers and ask them if they’re willing to pay for such a product.
You Need to Create the Product
It’s now up to you to create the product that you’ll sell.
You Need Affiliates Who Will Promote Your Products
Focus on quality over quantity.
3. Not All Affiliates Are Equal
Would you prefer 100 or 500 affiliates? I bet that you’d opt for the latter. But, the question you should be asking is: How valuable are those affiliates to my business?
If those 500 affiliates are unlikely to promote your product, but the 100 are – it’s the 100 affiliates that you should target.
This example demonstrates the importance of finding the right affiliates to market your products.
But how exactly do you find the right affiliates? Here are two powerful ways:
Focus on Existing Customers Who Already Use Your Product
What’s easier than reaching out to existing users of your product? Not only is it easy, but you know they likely have intricate product knowledge.
The fact that they’re using it also means they’re fans of your product and have already referred people to it.
Why not reach out to them, reward them, and increase the number of referrals by offering an affiliate program. For example, you could run an email series notifying customers that you offer an affiliate program.
Find Influencers in Your Niche That Have a Large Following
An influencer that has a social media following of 100,000 followers if far more valuable than someone who has a small following.
Use tools such as BuzzSumo to find influencers. For example, if you’re a business that sells pet products, you can find influencers as follows:
Step 1: Log in to BuzzSumo and click on influencers
Step 2: Apply filters.
Below I’m filtering by influencers and bloggers.
Step 3: Type in your topic
Below I type “pet products” and hit search.
Step 4: Scroll down to view the influencers
Step 5: Save influencers
Save those influencers that interest you to a current list you have or create a new one.
Step 6: Connect with influencers
Connect with those influencers on social media and, if you want, reach out to them via email. If you’re having trouble finding their email address, use a took like findthat.
Type in their name, surname, and website domain and let findthat do the work for you.
Follow this approach, to build a quality list of targeted prospects.
Conclusion
Affiliate marketing is a powerful way to grow your business. By tapping into a network of affiliates, you can get them to do the legwork and sell your products. In return, they receive a commission. It’s a win-win.
In principle it’s simple, but there is actually a lot to consider:
- There are benefits and drawbacks. Ask yourself: Do the benefits outweigh the cost?
- It’s long-term strategy. It involves a simple, yet hard, process of producing an idea, validating the idea, creating a product, and finding affiliates.
- Not all affiliates are equal. You must find quality affiliates that will promote your product. The goal is quality over quantity. Use tools like BuzzSumo to help you.
Are you ready to create your first affiliate marketing program?