You’ve probably heard of affiliate marketing before, but you may not be sure what it is or if it’s something that would be beneficial for your business. In simple terms, affiliate marketing is a way for other individuals or businesses to earn commission by promoting your products or services. It is a performance-based marketing strategy in which you pay these “affiliates” for each customer that they bring in.
Examples of Affiliate Marketing
One of the most common examples of affiliate marketing is found on personal websites and blogs. These affiliates are usually specialists in an area related to the business or businesses they are promoting.
For example, a wellness blog may feature ads for certain products, like supplements or essential oils. Each time one of these ads is clicked, the affiliate earns a commission. It is a form of passive income that can become very lucrative for both the affiliate and the business they are promoting.
Is Affiliate Marketing Right for My Business?
Building a successful and consistent stream of revenue through an affiliate network can take some time. As a business owner, you are already stretched thin. You will need to determine if affiliate marketing is worth the extra effort or if a different approach would be more appropriate. Read our pros and cons of affiliate marketing to help you decide.
Pros of Affiliate Marketing
There are several reasons why affiliate marketing can be an attractive option for businesses, including:
- Low up front costs. You will only need to pay affiliates when they deliver agreed-upon results. You can also negotiate the percentage of commission you are willing to pay, which gives this marketing strategy a certain amount of flexibility.
- More customers. Under the right circumstances, affiliate marketing can help drive a good deal of business your way. What’s more, these customers are already interested in your product, having clicked on it at a source they presumably trust. This is what is known as a “warm lead,” and it is far more effective than someone coming across your site or product at random.
- Newer, wider audience. By partnering with affiliates who have large followings of their own, you can tap into their audience and significantly increase your own reach. You may reach customers you never expected, or tap into a completely new demographic needing your goods/services.
The Cons of Affiliate Marketing
Of course, nothing is perfect, and there are also some drawbacks to affiliate marketing that you should be aware of before getting started, including:
- It requires ongoing effort to be successful. Like any other marketing campaign, you’ll need to continuously cultivate relationships with affiliates and promote your program to potential partners.
- It can be challenging to stand out from the competition . With so many businesses using affiliate programs these days, it can be tough to make yours stand out from the rest.
- There’s always the possibility of fraud . Although it’s not common, there have been cases of affiliates falsely claiming to have brought in customers in order to collect commissions they didn’t actually earn. This is why it’s important to carefully vet any affiliate partners before entering into agreements with them.
- You give up some control . When you hand over the reins to affiliates and allow them to promote your products or services however they see fit, you lose some control over how your brand is represented online.
What Businesses Do Well With Affiliate Marketing?
Any business can benefit from affiliate marketing, provided they are reaching out to the right people at the right time. Ask yourself the following questions:
Can I consistently produce and provide what I am selling?
The last thing you want is for people to click a link to your site and find you are sold out of a product. You will lose the sale and potentially commission, if your agreement with affiliates is to pay per click.
Is my product related to the affiliate I am working with?
Ideally, your product or service should complement the content with which it is promoted. Someone who is immersed in reading about the history of combustion engines is unlikely to even notice an ad regarding, say, “half off mini golf” or UO Holiday 2022 (see what I did there? I’m gonna link to a retail clothing store on an SEO site and watch as ZERO people click on it.)
Do I have the time and resources to do affiliate marketing?
Successful affiliate marketing will require some serious networking. Once you’ve started connecting with affiliates, you will need to nurture your relationships with them and ensure all parties are satisfied with their business arrangement with your company. While you might be able to get your program started, it may be worth your while to hire someone entirely new to manage this aspect of your business, once it gains momentum.
So, How Do I Start an Affiliate Marketing Program?
Ask! Start by researching bloggers, influencers, experts, and anyone else with a dedicated audience that might be interested in what you have to offer. Then email, call, or DM to see if they might be interested in featuring your product in exchange for a commission.
If you offer a particular good or service, you can also offer to send free samples to your prospective affiliates to gain their trust and approval.
Building an affiliate marketing program is much like building a backlink strategy, except you can incentivize potential affiliates with a commission. This can give you a leg up, since almost no one wants to pass up the opportunity for supplemental income.