Lately, people everywhere are making big claims about affiliate marketing. Today we'll be looking at how you can leverage its power to grow your small business or brand.
So here's the thing, if you've heard something about affiliate marketing, it was probably related to e-commerce businesses. Or how people are making so much money out of it on amazon, selling informational products like courses, drop-shipping, or others.
What you probably didn't know is that the origins of affiliate marketing are not in the online space, but instead in the thousands of retail shops that used it to add a stream of new customers out of their existing ones. If that's confusing, I get you, and we will take a deep dive to explore the why's and the how's in this article.
What exactly is affiliate marketing?
Affiliate marketing is the promotion of third-party products on your platform or business. Most of the time, when someone buys through your "affiliate link," you'll get a commission in the only space. Offline, you can think about references from customers and friends. They may not be getting a commission, but it's essentially following the same idea.
As an affiliate, you're a salesperson for the company. You help to make a sale, and then the company rewards you. Simple really.
The considerable buzz going around affiliate marketing is because the technology finally caught up to the idea in the 21st century. Companies can now give each affiliate a customized tracking link, in practice collecting data and results in real-time.
Here's an example of how this works: Imagine that a reader visits your post about the best winter jackets. They click on one of your affiliate links, leading them to a product on Amazon.
But they realized they had to pick up their daughter from school. So they leave their house, pick up their daughter, have dinner, and then finally go back to Amazon, where they find the product again.
Since they're already shopping on Amazon, they decide to purchase some ski gear too. Here's the good news. They clicked on your affiliate link earlier, and a cookie was stored on their device. Because Amazon has a 24-hour cookie duration, you get compensated for both the winter jacket and ski gear—even though you didn't promote the latter.
However, when most people believe affiliate marketing to be an e-commerce or online store exclusive perk, the story is much different. Thousands of retailers and brick-and-mortar shops realize that they can also use that same technology and apply it to their programs.
Even though an affiliate program won't make you incredible amounts of money, it's an additional income stream that can bring more sales over the long run. Its benefits extend to the marketing that the affiliates on the program provide on an ongoing basis, which adds pretty heavily to its value. But more on that later.
How to Create Affiliate Marketing Programs
So if there's something we can't ignore while creating a successful affiliate program for our businesses, it's that the technology is there to help us. That means you cannot leave the digital side of your business behind. It will have to work in tandem with your physical shop and processes to make your program a success.
Let's start from scratch. There are two quick ways in which you can create an affiliate program. The first one is by adding cross-sales to your business. Make connections with other companies that offer complemental products that your customers might find interesting or valuable, and then provide them in your physical and/or online locations.
By doing this, you're essentially turning into an affiliate for other businesses, and of course, getting a cut of every sale you make for them. Local networking with other business owners is a great way to get started with this strategy. And remember, this could be a two-way street or a win-win.
Suppose other businesses agree to sell your products in their locations. In that case, you could find yourself opening to a whole new audience and benefiting from more eyes on your brand.
Now let's go for option 2, turning your customers into affiliates. Think about the amazon example we gave above. Customers acquire an affiliate link, promo code, or number that they can use to share with other potential customers who will then buy from your store. But we'll talk about the exact mechanism later.
Right now, focus on creating value for your affiliates. Like a referral program, we should strive to create enough perceived value for our affiliates to encourage others to try and buy our products. What often makes or breaks this approach is the reward for your customers spreading the word.
Many stores use discounts on purchases as a reward incentive, and while this might be okay, it is not if your discount is a mere 10% off. You want your affiliates to salivate for that incentive, so making it juicy enough it's your job. If you're up to it, offering cash-back options could also go a long way towards making that reward attractive.
After all, remember, they are not only working for you as essentially sales reps but also doing marketing for your brand as ambassadors. So don't underestimate the value of a customer who can potentially bring many more. But let's go back to the mechanisms you can use to encourage and facilitate those programs.
Many stores use customer-unique IDs to share with others when making a purchase.
However, there are many other ways. Unique shareable links (just as Amazon does) go a long way to making it easier for customers to share something of value.
However, these options can also work in the offline space. Suppose a new customer is referred by an affiliate and purchases something in an offline location. In that case, they can share the ID of whoever referred them and get a "new customer discount" for using that.
That way, you can easily track the customer who referred the new one. You want to constantly reward your affiliates' work and encourage the new ones.
Implementation and tips
It's clear that whatever path you choose, there will be some technical skills needed to make it a success. That is the assembly of systems in your business to keep track of whatever happens in your customer ecosystem.
While big brands have no problem hiring developers and creating these systems from the ground up, there's a big chance you don't want to spend the thousands that it would take you to that precisely that. Nevertheless, don't get discouraged. In the era of SAAS businesses, there are plenty of platforms that already offer most of what you need to create and implement an affiliate program at a fraction of the price.
Some examples are Shopify, Wix, and other website builders that support inventory, sales, and communications management. These platforms will run you about 100 dollars a month and enable most of what you'll need in the back end to make an affiliate program a success. It's still likely that you'll need to hire or outsource some of these efforts, but that shouldn't break the bank if you spend your funds wisely.
You're looking for someone with tech expertise to assemble the moving pieces necessary for you to run the ship without them over the long term. Hiring a sales or marketing consultant could be the best option in this case. They'll likely know where to find the expertise needed (at affordable prices) for you to take the project forward.
If you don't want to pay someone, a mentor could be your best choice for an advisor to guide you in the right direction. Using the MicroMentor platform to find a volunteer mentor is now easier than ever.
Simply quickly signup in less than 10 minutes, browse for a specialist in whatever field of business you may need help with and send them a message requesting help.