Affiliate marketing is an excellent way for businesses to reach new customers and make money by promoting products and services they believe in.
Unfortunately, get-rich schemes and the promise of passive income have given affiliate marketing a bad name.
This article will cut through the noise, discuss how affiliate marketing works, how individuals can start affiliate marketing, and how businesses can use the approach to reach prospects that may not have known about their solutions otherwise.
What is affiliate marketing?
Affiliate marketing is a type of performance-based marketing in which a business pays third parties to either generate leads or sell their solutions.
Why should a business leverage affiliate marketing?
Affiliate marketing is low-cost, but not no-cost, investment for businesses to reach new customers.
Affiliates promote the affiliate products to their existing networks, possibly via websites, social media, email lists, etc.
The affiliate earns money only if they make a sale. Otherwise, the affiliate’s efforts are at no cost to the business.
There are risks to the business leveraging affiliate marketing, primarily:
- The affiliate may use wrong or illegal methods to sell the company’s solutions.
- The affiliate marketer may sell to customers who are not a good fit for the solution, costing the business more money and lowering revenue from these customers. Or, worse yet, it costs the company money to support these customers.
Getting started with affiliate marketing
Planning the program
You have created a marketing plan for your other channels.
A successful affiliate marketing program requires the same level of strategic planning as any other marketing channel.
Set rules that mitigate your risk and protect your upside
Ensure that the affiliate marketer is clear about the dos and don’ts of your program.
Are they allowed to promote your products via google ads?
Social media promotion?
What affiliate marketing strategies are acceptable and what are not.
Remember – you don’t want to pay affiliates for generating sales you would have generated via other marketing channels.
Codify this into a legal agreement and ensure every affiliate marketer signs this agreement.
Have a screening process
What should your affiliate marketers “look like”?
Should they have a website?
Be a social media influencer?
Have an extensive email marketing list?
Define a screening process to ensure this channel compliments your other efforts.
While most affiliate programs pay for sales, some pay for leads.
Which model (s) do you want to leverage?
For affiliate compensation:
- What percentage of the sale will you pay?
- What is the maximum amount you will pay per sale?
- When will you make affiliate payments (net 30, 60, etc.)?
- Will you pay recurring revenue (if you sell SaaS solutions) or one-time payments?
Cookies ensure the affiliate marketer gets credit if the prospect buys your solution down the road.
Set a precise cookie length so affiliate marketers know how long they have to generate a lead before they are no longer eligible for credit.
For example, will the lead count as affiliate sales if the prospect buys within 30 days? 90 days?
Use Affiliate tracking software
You could create your in-house solution.
You could create separate landing pages for each affiliate, manage the agreements, track sales, and so on by yourself.
Or you could look at solutions like Impact or Partnerstack, which have solutions built for companies and affiliates to find one another, manage the relationship, track sales, and handle payments.
These solutions are great affiliate networks that:
- Simplify the generation of a unique affiliate link per partner
- Monitor individual performance and monitor the overall ROI of your programs.
- Provide a central place to communicate to all affiliate marketers you are working with.
Monitor your affiliate marketing partners
The majority of affiliate merchants will not sell anything.
The successful affiliate partners are where you need to focus the majority of your energy.
Work with these successful marketers to learn how you can help them be more successful.
Would an investment in dedicated affiliate managers be a worthwhile investment?
Should you use a portion of your marketing budget to generate more supporting materials, hold events, or create tiered incentive programs for your top performers?
Why should you become an affiliate marketer?
Affiliate marketing can be an excellent way for anyone who has built an audience to generate additional income.
You find a product you love, see if it has an affiliate program, get your affiliate link, and start sharing with your audience what you love about the product, how you use it, and generate sales.
Some of the positive aspects of joining an affiliate program include:
- Selling other people’s products
- No inventory to manage
- No customer service/support calls
But remember, you are telling your audience about this product/service. Your reputation is on the line, so be selective.
Getting started as an affiliate marketer
Find a product or service you love
Is there a solution you regularly use that you think everyone should know about?
Go to their website or call their sales team to find out if they have an affiliate marketing strategy and program.
If they do, sign up!
You can also find affiliate programs through other means:
- Search for <<product name>> affiliate program on your favorite search engines.
- Register on an affiliate network like ShareASale, CJ Affiliate, Rakuten, Impact, or Partnerstack.
Consider your audience
What type of audience do you have?
Do you own a website?
An online store?
Are you a Youtube or other type of social media influencer?
Have a massive email list?
What does this audience want to learn about, and how can the product you promote help them?
Then help your audience
You may create a Youtube video, blog post, a new email, or a tweet depending on the above.
You should show your audience how they can solve a problem they have using the product you are promoting in your marketing efforts.
Include your affiliate link in a few places, where it makes sense, and make sure the call-to-action is prominent.
And disclose to your audience that you are an affiliate and may get paid if they buy this product.
Final thoughts – for now
We’ll share an indepth article on best practices in the future.