Affiliate Marketing For Small Businesses
Every business is different and nuanced, even if they look very similar at first glance. This means a marketing mix that works for one operation will not deliver the same results for another. Its perhaps why marketing is more of an art than a science! Certainly, there are dozens of different ways you can market your small business, and all are worthy of investigation. A fantastic digital marketing strategy that seems to float under the radar for small businesses is affiliate marketing. Executed well, this type of marketing is a great way to increase sales and brand awareness at the same time.
But what do you need to know, and how do you get started?
Read on as we delve into affiliate marketing and how it could help your small business.
What Is Affiliate Marketing?
It’s a type of performance-based marketing that allows a business to partner with other brands/individuals (known as “affiliates”) to promote their products or services. The affiliate partner then earns a commission for each of the sales or leads they generate for that business on their platforms.
For instance, the affiliate refers to a product on their blog or social media feed, and this includes either an ad or a link back to that product. The customer reads it, clicks through to it, and makes a purchase. The transaction is confirmed and recorded, and this then generates the commission. Essentially, your affiliate partner has acted as a salesperson for you!
Affiliate marketing began way back in the late 1990s when Amazon created the first affiliate program. The industry’s booming – globally worth $8.6 billion in 2017, it’s estimated it will hit $15.7 billion in 2024. And with some sources estimating ROI of £12 – £16 for every £1 spent, it’s not surprising it’s growing so fast.
Types Of Affiliate Programs
There are two main types of programs you need to be aware of: pay-per-sale and pay-per-lead. Pay-per-sale programs pay affiliates a commission for each sale made through their affiliate link. In comparison, pay-per-lead programs pay affiliates for each lead generated through their affiliate links, such as a form fill or email sign-up.
One of the big advantages of affiliate programs is that it is cheap to run. It requires no upfront fees to run it compared to many other forms of digital marketing. You only need to pay affiliates if an agreed action (eg a sale or a lead) has actually taken place.
If you partner with the right company or individual, you can reach a wide and relevant audience, while tapping into the trust they have for your chosen affiliate. You may yourself have bought insurance from a provider you’ve never heard of previously on a site like GoCompare. Cost will come into it of course, but would you have bought from that provider so quickly if they’d popped up unexpectedly in a Google search? So, affiliate marketing can boost your brand and your reputation.
What’s more, affiliate marketing can be used to find target audiences with extreme precision, allowing small businesses to reach specific demographics that are most likely to be interested in their products or services.
And as mentioned above – the return on investment is great!
How to Start Your Affiliate Marketing Journey
First of all, you’ll need to decide what services or products will be promoted. And then you set your budget. The key question is how much you can afford to pay your affiliates for the sales and the leads they generate. It’s a balancing act – too low a commission won’t incentivise your partner to sell, and while a high commission will generate a lot of interest, it could also send you to the poorhouse in short order.
Research at this stage is vital – average affiliate commission rates fall between 5% to 30% but much depends on the industry. And of course, the competition! It’s a good idea to check competitors’ affiliate programs to get a better idea of what the average commission rate is in your industry.
Now it’s time to start putting the affiliate links in the right hands. It’s important to remember that quality over quantity is key. You can elect to manage your affiliate marketing yourself. You’ll need to find the companies or individuals you’d like to promote your product or service. Rather than just blasting your affiliate program across the internet hoping to gain some traction, find relevant and high-quality businesses/individuals to partner with. It’s then a matter of approaching them, and selling your product in, while agreeing commissions and targets.
Alternatively, there are a legion of affiliate marketing websites, networks and programmes businesses can use. They have the knowhow, tools and of course, a network of affiliates waiting to work with you. They can also help with perhaps the most vital part of the process, tracking sales! There is plenty of choice out there – Awin is a good place to start your search.
We are a marketing agency in Kent. If you’re in need of professional and experienced marketers to help jumpstart your marketing efforts, we can help. Our creative marketing team helps businesses like yours achieve the marketing targets you are striving towards. Contact us today to arrange a call to discuss all your marketing needs.
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