Obviously the life blood of any business is a constant stream of new customers, so anything you can use to acquire more customers quickly and cost effectively, has got to be worth a closer look.
How about a source of new potential customers which has no real upfront costs, it’s easy to set up and best of all, you only pay for the lead after a sale?
This is a method that some of the biggest brands online use including Amazon, Ebay and 1000’s of others. Don’t worry if you have a small business, as the results can be scaled both for smaller businesses and global brands.
However, this won’t suit all businesses. If you’re a hairdresser for instance and you’re not looking for a huge boost in customers, affiliate marketing may be too much.
It works best for online companies, even small ones looking to grow, as the whole process is automated by whichever online affiliate network you choose. More on that in a moment.
Affiliate Marketing is basically commission based sales.
You allow people to sign up as your affiliate (commission only online salesperson) and promote your products or service online, via simple personalised text links.
When someone clicks on one of these links to your product and buys, you pay the referring affiliate a predetermined commission.
The commission rate depends on the business and products but it’s usually from around 10% up to 70 or 80%, depending on the industry and product cost.
Most businesses will pay out anywhere from 10% to 50% and this works great as you still profit from sales that you don’t have to source yourself.
Your affiliate has brought the new potential customer to your website and if they buy you’ll pay the affiliate commission, AFTER the sale.
This makes it unbelievably cost effective, as you don’t pay out anything up front, only from the profit on the sale.
Visitors sourced via affiliates are:
- Targeted to your niche, as they come from websites within your niche.
- Pre-qualified, so when they arrive on your website, you know they are obviously at least interested in what you’re selling.
- Pre-warmed, as your product will already be familiar to them.
- Extremely cost effective . . . you don’t pay for the traffic, you only pay when a sale is made.
You don’t get all these benefits from most other traffic sources. In particular, you usually have to pay for visitors upfront, without knowing if they are going to convert into customers.
But not with affiliate marketing.
Of all the visitors attraction methods, affiliate marketing offers a stack of profitable benefits:
Your visitors are targeted
The great thing about affiliates is they work and promote in your niche, so the visitors they send you are perfectly targeted to your business. The more targeted your visitors are, the higher your conversions from visitor to customer will be.
Your visitors are pre-qualified
When affiliate sourced visitors reach your website, they’re pre-qualified thanks to the info or review of your product on the affiliate’s site. They know what you’re selling and if they click through, they’re obviously interested.
Once again this can have a huge effect on your conversion rate, simply because untargeted traffic never converts well.
Your visitors are pre-warmed
An affiliate’s website will usually ‘pre-sell’ your product in their post and get the visitor excited and enthused about your product or service.
So they will either present a problem which is solved by your product, or compare your product, along with a handful of others in a product comparison/review.
This means that by the time the visitor arrives on your site, they are almost ready to buy and all you have to do is push them over the edge.
Your visitors are cost effective
As there’s no outlay until an affiliate makes a sale and then you pay the affiliate from the sale, there’s no initial outlay for your business.
You really can’t get any more cost effective than not paying out until you make an actual sale.
You get free subscribers
Don’t forget that if you have an opt-in form on your website, maybe offering a newsletter, special report or discount etc, affiliates can help to build your subscriber list for free.
The thing is, some of your visitors won’t buy, but they will become a subscriber via your email form.
This is how other brands build huge subscriber lists who they pay for once, and then sell to over and over again.
And because it was your affiliates who sent you the visitor, you haven’t paid to build your list of subscribers.
There’s also an often overlooked benefit to having affiliates promoting your brand . . .
When you buy Pay Per Click traffic via Google, Bing or Facebook etc, people who come to your site and aren’t immediately convinced may search Google to see if they can find out more about your product.
If you have affiliates promoting you, their websites will also show up in the search results when someone looks for what you’re selling. And this means your product will suddenly have multiple websites in the search results promoting your product.
In other words, you don’t pay for any of this traffic as your affiliates are taking care of it and you only pay your set amount commission, when the affiliate makes an actual sale.
It’s hard to think of a more efficient, cost effective way to get more customers and sales.
So how do you take advantage of affiliate marketing?
There are 2 ways to approach this and for the majority of small businesses, the first way is usually the best:
1: Use an online affiliate network
Basically, there are companies online who specialise in bringing together businesses and affiliates.
You simply add your product or service to their marketplace and their affiliates can then promote it if they choose to.
These networks have thousands, sometimes tens of thousands of affiliates in all kind of industries, so chances are some of them are looking for things to promote in YOUR industry.
If this is something that interests you, I suggest you begin researching affiliate marketing yourself, as it can build your business faster than anything else.
Obviously, each network has its own rules etc and some will charge you a small fee to list your business, while some are free. There are also networks focusing on certain niches and industries, while others have a huge and varied selection.
2: Use affiliate marketing software on your own website
This option is a little more complex and will have a steeper learning curve.
There are a number of different affiliate software providers, at different price points, depending on what you need for your business.
You add the software to your site and you can enrol your own affiliates and the software tracks everything, pays your affiliates etc.
Obviously you have to manage it yourself and you’ll start with zero affiliates, unlike the network option, but you’ll have total control.
Summary
Affiliate marketing is one of the most powerful ways to grow your business. Basically you can have an army of people promoting your business and you don’t pay them a penny until they make a sale for you.
The thing to keep in mind however is scale. If you are not ready for a ton of extra sales, it might be worth waiting to jump on the affiliate train.
It depends on your business but if for instance you do all your sales online and have the capacity to ramp up, affiliate marketing is definitely worth a closer look.
Can you think of anything more cost effective?
