What is Affiliate Marketing?
Affiliate marketing is a strategy that rewards people with a commission for driving people to your products and or services. The effectiveness of affiliate marketing depends on the strength of your offer and your affiliate marketers.
How can I use affiliate marketing to help grow my business?
Think of affiliate marketing as a form of revenue sharing. By providing a portion of the profit from the sale generated. You’re incentivizing people to do the leg work and help you find your ideal customers. This can not only help you avoid lulls in your business where you’re battling feast vs. famine. Busy then not busy and then busy again. It can help you to forecast sales and provide stability with your business.
How do affiliates get paid?
The more established businesses have a platform that they run their affiliate programs through. Providing you with a link that is customized to you as an individual. Making it easier to keep track of what visitors came from you vs someone else.
Payment can be based on 3 main factors and these are decided by the business.
- Pay per person that converts into a sale. This is a more popular model
- Pay per click- the affiliate marketer gets a percentage for every person that clicks on the link that they share with their audience.
- Pay per lead is a bit more complicated. Here you’re gathering information about the contact and passing it along to the business.
How much do businesses pay the affiliate marketers?
The percentage will vary and depend on the price point of the products & services. In addition to the quality of the lead depending on the affiliate program. Ex: If the business sells higher-priced items like cars, luxury clothing, etc. the percentage may be lower but the payout could be higher.
There are businesses where commissions may be up to 30% on each payment. That number may seem high but again it depends on the price points.
Is affiliate marketing worth it?
Let’s take a look at some stats first and then look at applying them to an individual’s business.
- Affiliate marketing accounts for 15% of all digital media revenue. Take that a step further. Along with email marketing, it accounts for over 16% of all eCommerce orders in the US & Canada.
- 15% to 30% of sales are generated by affiliate programs.
- 81% of brands rely on affiliate programs
- 86% of publishers expect their affiliate marketing revenue to stay consistent or increase in the future.
These numbers speak to its significance as a strategy and its effectiveness and reliability when it comes to generating revenue.
With that in mind, the answer to this question whether or not it’s worth it. That depends on a few factors.
One factor would be where you are in your business. If you’re just starting and trying to make ends meet. You may feel like you can’t afford to share any of the revenue that you bring into your business.
A question that I ask my clients is what matters more to you the volume or the profit. Affiliate marketing can increase the opportunities to close sales and generate revenue. This can bring stability to your business and provide you with longevity. If you’re profit-focused and feel like you can’t afford to pay for the help finding potential customers. You can always circle back to this strategy when it’s more appropriate for your business.
Another key factor in assessing the value of affiliate marketing would be the marketers and the quality of the leads that they provide. The importance of partnering with affiliate marketers that have access to an audience that meets your target audience is crucial to the success of the program.
Finally how you choose to structure the affiliate program makes a difference. Are you paying per click or lead? That may leave room for less qualified leads and opportunities to close the sale. The perks being you get more volume and may even identify new opportunities to create a product or service. How much are you paying out for those leads and sales is going to be a deciding factor for how many affiliate marketers that you may attract.
How many affiliate marketers do I need to be successful?
The more quality affiliate marketers that you can have on your program the more leads and sales you potentially can create. The key being quality affiliate marketers.
- 94% of publishers use multiple affiliate marketing networks
- Nearly 65% of affiliate marketers generate traffic by blogging.
Taking those statistics into account. It makes sense to seek out multiple partners with multiple audiences that you can tap into for leads and sales.
In Summary
Affiliate Marketing is an effective marketing strategy used by many businesses to build up their business and sales. It is a strategy to consider adding to your marketing mix and budget. Affiliate marketing can generate steady revenue and provide insights that can help a business build out its product suite.
Majority Media provides a service that can help you set up an affiliate program for your business. Setting up the program and help you manage it for your business. You can find out more about the service here.
If you are more of a hands-on marketer. Feel free to subscribe to The Entrepreneurs Newsletter where we share the do-it-yourself tips and insights to help you get the job done.
You can also learn more about lead generation by downloading this free ebook.
