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What is affiliate marketing and why do you need it?
Shortly I have been to a great restaurant that my friend recommended to me. I spent a great time in a magnificent place. I thought to myself, how great it is when you can rely on someone’s advice and absolutely enjoy the experience.
And, naturally, it occurred to me whether it could be possible to introduce such a recommendation and trust basis in business structure, and I came across affiliate marketing. I just grew really curious about this topic and wanted to know how it works and how businesses use it.
The reason why affiliate marketing has been gaining such significance in recent years lies in the fact that the way how consumers actually find out the information about products and services has changed a lot. The expectation level towards advertisement and sales is rising dramatically and we, as consumers, have learned to understand quite fast whether someone is just flogging us something or there is really something decent and valuable recommended to us.
Affiliate programs: making it simple
In its original form affiliate marketing is internet based sales. Its application in the sphere of offline marketing is restricted but not extinct. Of course, the online world has been in huge demand and dominated marketing for quite some time now: lots of online platforms are used where people place orders and share their experiences.
Affiliate marketing implies two main roles:
Merchant (also: advertiser or seller), in this case, it will most probably be you, who wants to sell their product and services on various websites.
Affiliate (also: publisher or website owner) provides the merchant a free advertising space, — for instance, through web links in relevant articles, which means also providing the scope of their website active and potential visitors. Affiliate, therefore, acts as a sort of interface between a seller and potential clients.
Unlike usual banner ads, remuneration in affiliate marketing is performance-based, in other words, depends on the profit generated.
In the course of time various billing models have been developed. The most frequently used are the following:
Pay per Sale
With Pay per Sale you reward your agents for sales they have made. They are paid as soon as a lead is turned into a sale. So, the commission is paid when a website visitor has landed onto the website through the affiliate weblink, opened seller’s ad page and purchased something or made an order.
Pay per Click
Here we have the system where every click on the advertisement is counted.
Pay per Click out
A person who visits seller’s website should make at least one more click.
Pay per Lead
This model implies that your agents get money for every lead they create. These may be sign-ups on forms, free trials, software downloads or a request for info materials.
Affiliate marketing facts and figures
According to a survey by Awin every second affiliate website-visit is made from mobile devices.
AMNavigator have run a survey among CMOs and found out that roughly 3/4 of the respondents reported having affiliate marketing as their most missing discipline in marketing.
4 mistakes Affiliate Marketers had better avoid
You do not help a website visitor
Often one of the affiliate parties tend to be rather obtrusive with their ubiquitous messages „buy this, buy that“. So, you can imagine that there is a high probability that such behavior puts people off.
You don‘t test enough
Nothing annoys as much as when you open the link with elated expectations because you are looking for some exciting products or services, you’ve been told that there is something exciting for you and then boom, you are redirected to some trash selling page. The link doesn’t work. Test the links yourself; ask your affiliates to report any problems. It spares so much anger and annoyance.
Not enough tracking
You or your affiliate should use some specific and clear links to every post to be able to recognize where the traffic comes from. When you make a sale, you want to know where the sale came from. This enables you to know which pages are converting well so you can grow and scale in this direction. It’s just that by tracking carefully you can contribute more to functioning blogposts and articles while leaving out those that generate less traffic.
You set up unattractive programs and provisions
In respect of affiliate marketing we talk about long-term collaboration and not about a quick win. To promote it you should make sure that the conditions agreed are fair for all the parties.
Categorization of affiliate programs in terms of marketing
Affiliate Marketing in the entire marketing funnel
All the activities that you undertake in the affiliate marketing framework are found between the top of the marketing funnel and its middle area.
The emphasis is put on the activities that first of all draw the attention of the potential customers to you and your solutions encouraging them to find out more about your company.
Short term effect vs. long-term effect
Affiliate Marketing is the channel that requires a certain time for touch and goes so that you can establish a connection with a trustworthy partner.
As soon as you get in touch with the right person and start working together with the long term effect if guaranteed: your affiliate is interested to make your business more profitable securing themselves fruitful cooperation.
Categorization in channel-portfolio
When you draw up your portfolio with measures and actions, you will notice that affiliate marketing has the function of seeds that are carefully planted in the heads of your potential clients.
This channel can be beautifully complemented with both short-term and middle-term channels.
4 often underrated tips and hacks for your successful affiliate marketing
Treat your partners with equal attention and significance
Okay, now, at last, you are building a business partnership with your affiliates. A partnership means that you mustn’t treat your affiliates from the point of view of a superior. You should do your best to display equality and openness in your relationships. The main key here is open communication where you always stay open for a dialogue, where you are always responsive when they have questions or suggestions, keeping them up to date, especially when you introduce some changes in your program.
Keep an eye on your competitors
Try to never lose a grip on the market. Be attentive to trends as well as new players. Make sure to regularly check what your competitors do in terms of affiliate conditions, or Cookies period. You should keep the hand on the pulse otherwise, if you do not look at different sides, your affiliates may start doing so, which means bad news for you.
Having various partners means undreamt-off possibilities
Exactly at the beginning of your affiliate initiatives, it is so important to be communicative and open during the period of search and acquisition of affiliate partners and not to zero in one narrow niche. Seek those opportunities which will help you also to get rid of your biases. Keep your business strategy bias-free and open minded.
Build the range of affiliates but always give a chance to new ones
Sometimes newcomers may emerge in the affiliate market that does not yet have a wide range of coverage and subscribers, for instance. If you recognize some awesome synergy potential, give them a chance and learn things together on your way to success.
Affiliate marketing key performance indicators
Growth rate as compared to the previous year
Take a look at the results of the current month in the previous year; possibly you will notice some peaks or downturns. What counts for growth statistics? Your growth indicators are orders placed, net sales, clicks, active affiliates and affiliates participating in sales.
New authorized affiliates
Inside the affiliate program recruiting is a non-stop process. Some affiliates retire or just quit from affiliate activities. Others are poached by competitors so the original account may be deemed as inactive. So, you always have to be in a hunting mode reaching out for new people.
Average order value
Does the average order value differ in the affiliate marketing channel from what you gain in other channels? Investigate what products affiliates advertise and try to figure out whether they choose affordable products because a buyer is interested in buying them.
Percentage of new customers
If you’re running your own website, how can you keep track of user information on your end? You can easily open up your analysis board and calculate the number of new customers, which you gained through the affiliate channel. You can use Tracking-Pixel to collect data on your web traffic.
Now you see how awesome the affiliate marketing channel in fact is. The core of the whole thing is to build partnerships with the right people, with the proper affiliates, who will make you more visible to a bigger number of potential customers. It also enables you to benefit from a FB or Instagram popular blogger with a thousand of subscribers recommending your products, for instance, or some other publishers who are advocating for the quality of your special offers, your staff efficiency and your customer support.
Affiliate marketing is positioned in the entry cycle of the marketing funnel. A comprehensive portfolio is incredibly important exactly for a short-term effect on your customers.
And now: don’t waste your time! Go take a look at the platforms to seek exciting partnership programs and connect to influential people who might be interested in helping you promote your product or service.
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