Affiliate marketing isn’t new, but it is one of the most effective and yet neglected of all the marketing strategies old and new. The main reason being because it isn’t fully understood.
What Is Affiliate Marketing?
Affiliate marketing is a form of referral marketing that makes everyone a winner. The referrer gets some form of reward to recommending new customers, the new customer often also gets a special offer of some sort and the business gets a new sale.
In recent years, affiliate marketing has taken off online with many online business using referral marketing schemes to turn their users into affiliates. Typically, rewards are not given unless the referred customer completes a sale, so this there is minimal risk involved and very little cost per acquisition.
Why Should Your Business Be Practicing Affiliate Marketing?
There are numerous reasons why affiliate marketing is one of the most effective strategies for any business, but here are the main 3:
- It’s cost effective – the affiliate doesn’t reap the reward unless the person(s) they refer complete at least one sale (or meet other minimum requirements set by your company).
- People trust their peers more than they trust your brand – Word of mouth is one of the most effective and age old marketing strategies. If your friend or family member tells you something is worth buying, you take their word for it. If a brand tells you, you are more sceptical because they are the ones selling the product or service. That’s why affiliate marketing is so effective.
- You can tap into new markets – Enlisting the help of affiliates from the market segments you want to penetrate will enable you to reach new customers in those segments and even penetrate entirely new markets.
How Can Your Company Use Affiliate Marketing?
Because affiliate marketing offers people some form of reward, it can lead to users trying to take advantage of this. In order to ensure you get awareness for your brand without compromising your brand values and ethics, you need to consider the following:
- Who Are You Targeting?
In order to make affiliate marketing work for your company, you need to first consider who you want to attract? Is there a particular market segment that you want to penetrate or gain larger market share of?
- What Offer Would Attract The Right Target Customer?
In order to attract the new customers, you need to attract affiliates who are in similar or the same market segments to your target customers. This means considering what the target customer would want/what you are trying to sell to them. Your offer should be focused on this product/range/service, as this is what you are aiming to promote through affiliate marketing.
- Does The Offer Fit Your Brand?
Affiliate marketing can have a positive impact on brand image, but only if you ensure that what you are offering fits in with your brand’s values. For example, a luxury brand might not want to offer a high quality and highly priced item at a low price to affiliates, as this could attract the wrong audience. The offer you create needs to reflect how you want your brand to be perceived by the target market.