Amazon Associates, Amazon’s wildly successful affiliate program with over 900,000 affiliates, is responsible for almost 50% of Amazon’s online sales. Looking at their success, you must wonder, “can affiliate marketing help grow my online business?”
The short answer is YES. There are many marketing strategies that online small businesses can use to succeed and among them is affiliate marketing. This strategy has low upfront costs, minimal risks, and huge potential to increase sales.
However, most online entrepreneurs are confused about how to run an affiliate program and remain clueless about how it can help them reach their business goals. In this article, we’ll dive deep to understand affiliate marketing, learn how it helps businesses succeed, and check out some examples of successful affiliate marketing programs.
Affiliate marketing is a performance-based marketing strategy where a business rewards affiliates for every visitor or customer brought by their marketing efforts. As a business owner, you pay out commissions to affiliates for every successful sale they bring to your business.
This arrangement gives your brand a wider audience reach than you could achieve with your own marketing initiatives. Affiliates are responsible for promoting your products or services on their own platforms. You still retain control over your brand by ensuring they follow brand guidelines and by choosing the right affiliates to work with.
There are four core players in affiliate marketing.
Additionally, affiliate marketing can involve advertising agencies who create and run ads to promote your affiliate program and increase the sign-ups of affiliates.
There are two ways to run an affiliate program. You can partner with a complementary business targeting the same audience or do it on your own.
If you look at your industry and consider your target audience, there’s a massive chance that another business compliments your products or services, and both of you will benefit from a strategic business partnership.
For example, if you are a local business that sells fitness clothes or healthy meal packs, you can partner with an online fitness coach who helps your target audience eat right and maintain a healthy lifestyle. Both businesses can cross-promote the other’s products and services to your target audience.
Strategic business partnerships help you expand your reach to a broader audience. In most cases, there’s no financial incentive involved because the promotion of the partnership alone is enough incentive.
Running your own affiliate program is not as complicated as you think. In contrast with business partnerships, it involves reaching out to individuals and recruiting them to become affiliates who will promote your products and services in exchange for a fixed commission. For example, you can recruit social media influencers whose followers are your target market and give them a 25% commission for every sale from their unique affiliate links.
When looking for affiliates, you can use affiliate networks with an existing pool of affiliates for every niche ready to promote your affiliate links. You would also use an affiliate software that creates unique affiliate links, tracks clicks and sales, and manages the payout for every successful lead.
If you think only big businesses like Amazon can succeed in running their affiliate programs, then you’re wrong. Affiliate marketing programs have been proven to create explosive growth for small businesses. Here are some of the benefits of affiliate marketing programs.
1. Increase brand awareness
Every business wants to reach as many of its target audience as possible. Since they’re earning a commission, affiliates have a vested interest in your business—which in turn compels them to promote your products to their audience and increase traffic to your website. It’s like having thousands of salespeople on your team working to get your products known.
2. Reach a targeted audience
Sometimes it’s hard to find your target audience despite online tools. Working with affiliates who resonate with your business means reaching your target market faster. Think of them as a shortcut to getting the right people who will benefit from your products and services.
3. Improve conversion rates
Since affiliates help you reach the right market, your conversion rates will improve. Not only are these customers ready to buy, but you will also gain additional insights into their purchasing behaviors. Affiliate tracking tools provide a vast amount of data that gives rich insights to help you improve your website and further drive conversions.
4. Provide social proof
Today’s consumers validate their purchases by looking for independent reviews about a product or service’s reputation. Affiliate product reviews create social proof that establishes a brand’s credibility to potential buyers.
5. Generate huge savings and high ROIs
Affiliate marketing helps businesses save on marketing costs from ineffective programs. Since it’s performance-based, you only pay affiliates when they generate a successful sale. This enables you to save costs on other marketing initiatives with less direct impact on sales.
You can also easily quantify profitability due to affiliate marketing since every expense is directly correlated to a sale. You’re not paying simply for clicks—you’re only paying for a closed sale.
While it’s easy to launch an affiliate program, some brands fail to create a successful and sustainable one. To create an effective affiliate program, it’s essential to observe the following factors.
1. Have a clear goal.
Success starts with setting goals. Determine what you want to achieve with your affiliate program and have a clear way to measure it. Identify the audience you want to target and the kind of affiliates you want to recruit.
By creating clear and realistic goals, you set the standards that must be followed to ensure a successful affiliate program.
2. Be competitive.
You’re not the only one running an affiliate program. Your competition is most likely doing it too and recruiting the same affiliates. Think about what will make your program more competitive and attractive. Analyze your competition’s affiliate programs thoroughly and find challenges you can address with yours.
It can be a competitive commission, timely payouts, added benefits such as affiliate training and exclusive events, or access to resources like marketing materials that they can use to promote your products.
3. Mind your profits.
When creating a commission structure, consider other factors like customer acquisition costs, customer retention rates, and customer lifetime value. Understandably, you want to pay competitive commissions, but you should also care for your own needs. Don’t go overboard and offer commissions that will deplete your profits in the long run.
Consider the impact of factors like additional bonuses, affiliate payouts, and the cost of the actual product or service marketed. Remember also that affiliate marketing has other charges, such as advertising (or recruitment costs) and fees to affiliate platforms which you should consider when determining your commission structure.
4. Vet your affiliates.
Your products and services are highly targeted and specialized as a small business. Unless you’re like Amazon, which sells many different products catering to a wide range of audiences, you need to choose the right affiliates. You can’t accept everyone to your program or risk reaching the wrong audiences.
Affiliates also affect your brand’s reputation. You want to ensure that affiliates represent your brand well and can speak with authority and credibility when promoting your products. In some instances, brands may even require affiliates to have first-hand experience with the products they are promoting since this gives authenticity to the affiliate’s promotion.
5. Create a strong brand identity.
To prevent affiliates from running promotions that don’t align with your brand guidelines, you need to create a strong brand identity that creates cohesiveness between what affiliates promote and what your brand stands for. This helps provide a smooth transition from what customers see on an affiliate’s post to what they experience on your website.
Before launching an affiliate program, make sure you’ve documented your brand guidelines comprehensively and provided clear ways for what is acceptable and what’s not allowed. To help affiliates understand your brand better, you can provide affiliate training, give them a copy of the brand guidelines, or provide them with promotional materials they can readily use.
There are two ways to launch an affiliate program: a live affiliate launch or evergreen affiliate programs. Both types have pros and cons, and you can consistently implement both for your business.
Nothing spurs people to action more than a sense of urgency. Creating live affiliate launches pushes your affiliates to promote your products and services quickly because there’s a deadline. This type of affiliate program involves a cart open and cart close date. This means you set a specific time when the products will be available. It’s like giving a deadline when affiliates can promote the products and services.
This works well for online courses and service-based businesses with a clear timeframe for when the product will be available. It can also work for physical products if you create seasonal items that won’t be available at any other time of the year.
Because there’s a deadline, affiliates are motivated to use all means to promote your offer. This creates buzz around your products that excite your target customer. When they see many people simultaneously promoting an offer, they’re also more likely to make the purchase.
However, a live affiliate launch involves a lot of moving and highly coordinated parts. To keep your affiliates on track, you need a cohesive marketing schedule that guides them when specific promotional tactics (like sending emails, posting on social media, etc.) take place. Usually, you also release a series of promotional materials that build up on each other and lead to the launch date. This can be stressful, so most business owners only plan one or two live affiliate launches per year.
When done right, live affiliate launches can significantly boost your revenues in a very short period.
In contrast, evergreen affiliate programs are available year-round and aren’t time sensitive. There’s no deadline when affiliates should promote your products because customers can purchase them at any time of the year. This program is less stressful than live affiliate launches because fewer tasks are involved, and you can automate the entire thing.
However, if you don’t regularly engage with your affiliates or recruit new ones, this can be a slower way to gain sales. Affiliates aren’t as motivated to promote your products and often only promote them once or twice after signing up. They will forget about your program if you don’t engage with them. Remember that there are dozens of affiliate programs your affiliates can join.
When running evergreen affiliate programs, continue to engage with your affiliates regularly and consistently. Provide them with new ways to promote your offers, such as exclusive sale events and freshly designed marketing materials.
If you’re still on the fence about whether an affiliate program can make your business succeed, then check out our pick of companies whose affiliate programs are making them millions.
Amazon arguably has the world’s largest, most famous, and most successful affiliate program. You might think that their program’s success is because they’re a huge company, but part of their growth was due in part to their affiliates. As a small business owner, you can learn and take inspiration from their success.
Their program stands out because they offer different ways for affiliates to link to their products. This flexibility allows affiliates to become more creative in promoting their Amazon affiliate links. When creating an affiliate program, consider giving your affiliates flexible options to represent your products and services.
Skillshare is a platform that offers online courses on practical skills like photography, web design, video editing, and even business management. They’ve gained prominence because many social media personalities promote the brand on their own channels. Course creators can learn a thing or two from Skillshare’s success.
What I like about Skillshare is that they provide affiliates with a monthly rotating offer. Affiliates remain motivated despite the evergreen affiliate program because of the new promotions year-round.
Amerisleep sells mattresses and other sleep accessories like pillows, beddings, and bed bases. They run an affiliate program that partners with content creators and review partners. When they launch a new product, they send samples to their affiliates to test and review. These product reviews have generated credibility and massive sales for the company.
I find Amerisleep’s affiliate program successful because its affiliates genuinely experienced the product. They carefully selected the most fitting affiliate partners and aren’t hesitant to send them samples so their promotions will sound genuine and credible.
Affiliate marketing works not just for physical or digital products but also services. Lend-Grow is an online service that helps big and small lenders find the correct information and resources to finance their needs. They can match a lender with financial institutions of all sizes.
They’ve partnered with reputable financial influencers to create high-quality content that introduces them to existing warm audiences. This has led to millions of funded loans from affiliate marketing alone.
I like that Lend-Grow can target warm prospects by connecting with reputable influencers in their field. This is one way that an affiliate program can help you reach ready buyers with minimal effort.
Affiliate marketing programs can lead to huge and sustainable success for any business. They work well not just for huge companies but are also instrumental for the growth of small companies. Digital and physical products and various services can benefit from the advantages of running affiliate programs.
When done correctly, affiliate marketing is a low-risk, high-reward marketing strategy that can generate significant income for both parties involved. Are you ready to explore affiliate marketing for your business?
Reach more people and create sustainable profitable launches with an affiliate program. Get in touch today to learn how you can leverage these strategic partnerships through my consultation or management programs!
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