More businesses are driven towards affiliate marketing nowadays. It helps them market their product without investing all their time and budget into products and storefronts. With affiliate marketing, businesses can effectively promote products to their target market. Let’s understand in-depth how affiliate marketing can benefit small businesses.
What Is Affiliate Marketing?
Affiliate marketing involves a partnership between an affiliate and a business or person to create brand awareness and promote sales of their products in exchange for a commission for every sale they drive.
The affiliate marketing structure includes:
- Affiliate merchant
- Affiliate network
- Affiliates or affiliate marketers
Is Affiliate Marketing Worth It?
Affiliate marketing requires patience, as you may not see the results straight away. But once you have an affiliate network setup that works to promote your products to the target audience, you will see it’s worth all the efforts. For instance, OBGYNs may not have the time and resources to sell products like menstrual products, baby care products, prenatal vitamins, and other nursery decors. Instead, they can incorporate must-have click shopping on their business websites. So, affiliates can help you promote these products with minimal effort and funds. Here’s how affiliate marketing can be beneficial for your small business:
- With affiliate marketing, you can enhance the social proof of your brand’s reputation.
- You can diversify your sales channels to generate more leads and traffic
- Choose from thousands of affiliate marketers, like Amazon
- There are no hidden costs, and you have the freedom to fix the commission rates
- You have the flexibility to make your affiliate program small or big at minimal or no cost.
- Boost your brand awareness
Would My Business Benefit From Affiliate Marketing?
Affiliate marketing can help your small businesses thrive by forming a network of affiliates who promote your products. Affiliate marketing can benefit your business as it offers:
Low Start-up Costs in Affiliate Marketing
The start-up costs of an affiliate program are insignificant, which is beneficial for small businesses already running on restricted resources and funds. Your business can promote its products through affiliates, who only get paid according to the sales made. For example, dentists with dental hygiene products like electric toothbrushes, whitening strips, and children's dental products can use affiliate marketing to sell their products to their target audience with minimal expenses. A short blog on their website with recommended products and affiliate links made for an easy and beneficial example.
Other than the initial workload of vetting affiliates and setting up your affiliate program, there’s little effort needed from your side to promote and market your products. Work with a trusted network of affiliates, who can promote your products to the target audience.
Higher Return on Investment
Determining accurate ROI can be challenging for most advertising and marketing campaigns. Affiliate marketing focuses on enhancing profitability through its performance-based model. This way, businesses only pay for closed sales, not for clicks, visitors, or impressions.
Directing your marketing efforts through an affiliate program helps you influence and gain direct access to a highly targeted, receptive audience that is more likely to purchase from your business. Affiliate marketing has a significantly higher ROI than other majority marketing and promotional strategies.
Better Conversion Rates in Affiliate Marketing
It’s essential to track how your business performs to make operational improvements in its working. By collecting and analyzing the data from affiliate marketing tracking, you can gain meaningful insights into what the customers are buying and where they come from. An in-depth analysis of this rich data collection helps you improve your conversion rates by making essential alterations to your website, identifying the affiliates that bring in the most revenue, and offering more appealing visual creatives.
Since your affiliates are motivated to sell products to earn commissions, they try new techniques and methods to attract more audiences and improve conversion rates. Your affiliates will brainstorm to come up with unique marketing content.
The best part about affiliate marketing is it shouldn’t cost you anything until the marketer closes the sales. The commission and performance relationship can vary according to your mutual agreement. While some affiliates earn commissions per view or per action, others per sale.
Small businesses don’t have to spend their limited resources on product promotions. You only have to pay the affiliates that show results. This way, profits also increase, and you don’t have to worry about your fixed marketing expenditure.
Another benefit of affiliate marketing is that it drives a highly focused audience to your products. Since you handpick your affiliates, you can ensure that the visitors to your site are individuals who will benefit from your product and likely purchase it. Affiliates that connect with your brand will probably have an audience within their area of influence who will find your products useful. Fitness influencers will have followers willing to invest in workout gear and protein supplements, while health-centric blogs can help promote healthcare products like essential vitamins to a larger audience.
Having targeted traffic ensures your product reaches those who find it valuable. You don’t have to second-guess the visitors brought in by your affiliates, because if they visit your site through affiliates, they’re almost 100% interested in your product and likely purchase it. For this, you need to pick the right affiliates that can influence or target the right traffic to your website.
Boost Your Lower-performing Products
Sometimes, some products or services don’t sell as much as the other products you offer. Such products have a smaller market and are more difficult to sell. It isn’t because your product is inferior or lousy, but because your target audience is limited and more discerning. Also, sales will be limited if your products are costly. If this is the case, you can offer better and additional incentives, such as bonuses, to your affiliates to motivate them to sell more. Offering higher earning percentages also encourages your affiliate marketers to promote this set of low-performing products.
How Can An Affiliate Help Grow Your Small Business?
A good affiliate marketer will probably have access to many sources of traffic, which they can use to promote your products and boost your sales. The conversion rates of promoting your product through a trusted network of affiliates are higher than other marketing strategies. Finding leads online and converting them into customers requires trust and extensive brand awareness. That’s why word of mouth through affiliates can be a powerful tool to promote your products and expand your sales.
Affiliate marketers can directly influence their audiences, which has a significant and more result-oriented impact than other indirect marketing channels. Affiliates use their network to tap their niche audience and get them to purchase your products.
By allowing affiliates to market your products and services, you have access to a larger audience segment and gain trust and reputation within this new target segment. Affiliates can use various methods and channels to promote your products, such as:
- Blogging with the power of affiliate links, content marketing and search engine optimization
- Using paid online advertisements on platforms like YouTube, Pinterest, Instagram and Facebook
- Leveraging their personal and professional networks
- Using email marketing to create brand awareness and promote their blogs with affiliate links
- Search engine marketing to reach the target audiences
- Leveraging social media presence
Gain affiliate links from a trusted source, such as the Amazon affiliate program, to increase your search engine visibility, as it will help your products rank better on search engines and gain more traffic.
As you get access to more audiences, your conversion rates will improve, and this will help you foster a strong bond with the marketer, which will benefit both to expand the sales and grow business together.
Setting Up an Affiliate Marketing Program
Once you set up your program, affiliates need to know that your affiliate program exists and offers competitive incentives that motivate them to promote your product. For instance, Amazon is one of the most popular and leading affiliate programs, as it offers more benefits and advantages than its competitors.
Moreover, the tools and resources they provide their affiliates with are easy to use and do not require comprehensive technical knowledge to get the most of them for promoting the products. While the vast range of products and tools Amazon offers isn’t something a small business can compete with, it’s an excellent example to follow while setting up your affiliate program.
Here’s what you need to set up a successful affiliate program:
Know Your Goals
You need to understand what you want from your affiliate program, including the type of customers you want to approach, the amount of revenue you want your affiliates to generate, the type of affiliates you want to work with, and the conversion rates of affiliate links that lead to sales. For example, these companies offer affiliate programs:
– Strikingly: a quick and easy, multi-function website building tool
– Canva: a one-stop shop for all your design creation needs
– Amazon: the world's largest online retailer
– Storychief: a multi-channel content publishing tool
Fix the Commission Rates
Keep in mind the competitive commission rates of the market before finalizing your commission structure. Decide the mode of payment you’ll use to pay your affiliates, and the time of payment. The average customer lifetime value, customer acquisition costs, and retention rates will also affect your commission rates.
Choose Your Network
Decide whether you’ll use an existing affiliate network or create your program. If you can manage the time and effort needed to create an affiliate program, you can develop it yourself. Otherwise, you can benefit from the available affiliate networks that handle the entire affiliate operation on your behalf.
With affiliate marketing, you can market your product with a low effort and budget, while guaranteeing increased brand awareness, high return on investment, and exponential business growth. If you need help with any marketing functions, iProv is your one-stop solution. Contact us today to learn more about our services.