What is Affiliate Marketing?
Affiliate marketing is a performance based form of marketing, where a merchant (owner of a product) gives an affiliate (a salesperson/marketer) a commission (certain percentage of the cost of the product) after a certain action (click/sales) has been performed by a referred customer.
For example, I (the merchant) have a bundle of E-books on Affiliate Marketing that I want to sell for $10, I can start an affiliate marketing program where I pay affiliates a commission of, let’s say, $4 for every referred customer who purchase my e- book.
Why Affiliate Marketing?
For any business owner, having hundreds of people promoting your product/service for a small percentage of the profit you earn is a great marketing strategy. Many offline businesses use this strategy by recruiting salespersons or marketers and paying them only when a sale is made.
But as with most things in business, effective planning and knowledge is required for a successful implementation of an affiliate marketing program for your business.
Here are few guidelines to get you stated;
#1. Analyze and Research
Before you can successful make a sale in business you need to present the right product to the right consumers. Understanding who your customers are is the first step to creating a successful affiliate program. Also, you need to research about top affiliate marketing programs in your industry – what products/services are for sale, which affiliate program and software used, how affiliates join, how much commissioned is paid, how much revenue is generate by affiliates etc.
Now estimate how much it will cost you to set up and run an affiliate management program versus the number of affiliate expected, amount of expected revenues to be generated by an affiliate, total amount of commission to be paid out and so on. These should help you create a clear picture on how profitable starting an affiliate marketing program would be for your business
#2. Choose a Product Type
Choosing a product type is very crucial to the success of your affiliate program. Products can either be physical, downloadable or SaaS. Performing due diligence when choosing your product type would help attract top affiliates to your products.
#3. Create Marketing Materials
Create resources – Sales page, landing page, images, banners, text links etc that would enable affiliate build high converting promotions. These resources must be kept fresh and attractive for affiliates to use.
#4. Choose an Affiliate Management Program
You can either register with affiliate network or use in-house affiliate management software. The networks are usually an aggregator of several affiliate programs. It’s like a market place for merchants, where they can place the product and affiliates can go there to pick which product they wish to promote. Popular affiliate networks are Clickbank, Cj Commission, and ShareAsale etc. Review this list of top affiliate networks.
An In-House is an alternative, where you buy affiliate management software and set up your affiliate program “in-house”. Popular affiliate program management softwares are ClickMeter, Post Affiliate pro, iDev Affiliate etc.
Within these management programs, you can setup your commission rate and structure, sales landing page etc
#5. Recruiting Affiliates
One of the most challenging aspect of affiliate program management is recruiting, attracting and motivating affiliates. Affiliate Marketers are independent marketers who cannot be “managed” but when you manage your program well and incentivize them, they’ll in turn be motivated to give your products their efforts. If you go the in-house or self managed program route, you’ll need to spend considerable time recruiting strong affiliates into your program. Networks on the other hand have the advantage of having affiliates already a part of the network who are actively seeking out quality programs and products to promote.
#6. Follow Up With Your Affiliates
Once affiliates start joining your program, ongoing communication is key. You can reach out to affiliates directly via email or private message on various social platforms. Plan to send regular newsletters that include helpful marketing strategies, important news about your products and upcoming special promotions. Some affiliate program manager’s blog regularly to their affiliates. Others use Twitter, Facebook and other social channels to communicate. Choose a few primary ways to get information out to your affiliates and do it well. Affiliate marketers are very busy and the great ones receive invitations to join programs all the time. You want to keep their attention on your program and the best way to do that is by covering all the points above as comprehensively as you can.
Now that you know the basics of what it takes to start an affiliate program for your business, take time to review the pros and cons before making the decision. Starting a program is not that difficult but managing a program well could be challenging. But the rewards will soon follow if you give your program and your affiliates the best.
Featured Ebook Download