What is affiliate marketing and why does it matter to an emerging entrepreneur? Let’s travel together through a road map of definitions and “why it matters” conversations so you can have a full understanding of how to use this marketing channel to grow your sales and success.
Imagine this: You’re an entrepreneur with a limited marketing budget and you have big goals. You dream of reaching the right audiences while increasing sales and revenue but you’re not sure how you’ll get there. With affiliate marketing, you are able to set and meet key performance indicators (KPIs) while only paying out for performance. This means that you will only pay those affiliates that are driving the actions you desire. Let’s break it down a bit more. Here are the key players in affiliate marketing:
Affiliate Marketing: Key definitions
This is you and you want to reach new customers, make more sales, increase revenue, get more leads, etc.
Also known as publishers. These are, in essence, websites and influencers that help you reach your goals. These affiliates can include Coupon and Loyalty (Ex. Looking for a coupon on RetailMeNot before you make a purchase), content (Ex. Buzzfeed “best of” lists), Influencers (Ex. That latest clothing try-on haul you saw on Instagram) and Review (Ex. credit card reviews on NerdWallet).
You’re trying to reach these guys. They make a purchase, fill out a form or complete your brand’s desired action after interacting with an affiliate. The affiliate gets paid by your brand once the action is successfully completed.
The Affiliate Networks and Platforms
How do these partnerships work? They have to be tracked, reported on, and then paid. Networks have unique tracking links for each brand so they can keep tabs on who was responsible for a sale. A network or a tracking SaaS solution is the foundation of an affiliate program.
Think strategy, expertise and execution. Agencies fully manage the affiliate program for you and use their years of relationship-building and technology to ensure your goals are being met and exceeded.
How Entrepreneurs Benefit from Affiliate Marketing
So now that we know how affiliate marketing works and who’s involved, how can entrepreneurs use it to their advantage? Here are three key benefits of the channel:
1. Any vertical can benefit
At my agency we have managed programs for verticals spanning retail to water filters to legal and financial services. With thousands of affiliates, there is always an engaged audience to be found for what you’re selling. Yes, even for water filters.
2. Major advances in technology
This isn’t the Wild West of the early 2000’s. Affiliate Marketing is all grown up and constantly evolving. New technologies have been created to provide brands with unprecedented competitive insights, safeguards from fraudulent traffic and increased compliance measures to maintain brand integrity across hundreds of affiliates. Eighty percent (80%) of brands in the US have affiliate marketing programs because it’s a proven channel.
3. It’s Pandemic-Proof
No one could have predicted how 2020 would have gone and naturally brands are weary of investing in new channels or shuffling their marketing budgets. But it’s important to note that the positive attributes of affiliate marketing have never been more appealing — pay-per-performance, transparency, relationships at scale. The brands that have doubled down on their investment in the channel or have entered it for the first time (or the first time in a long time), are able to take advantage of technologies and partnerships that have previously not been as capable of maximizing these value propositions of the channel.
How To Get Started
You have your brand established, you need more sales and you now know about the high ROI-driving channel known as affiliate marketing. What now? The priorities, whether you are managing your program yourself or through an agency relationship, are:
- Identify an affiliate network. There are a plethora out there, so take some time to review them and ensure the network is a fit for your focus, budget and brand offering.
- Begin publisher recruitment. This is an area of daily management and direct recruitment, but the effort pays off in securing quality relationships which will complement your brand and bring you both prospects and actual sales.
- Monitor, manage and scale. With your network selection in place and affiliate partners hard at work, the ongoing “next step” is continued management and relationship-building to scale your program and continue to grow both sales and KPI targets.
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