Does Your Business Need an Affiliate Program?
If you are a merchant that is considering adding affiliate marketing to your mix of marketing efforts, you should first know affiliate marketing is a long-term commitment and there are many things about your organization that you should evaluate to know if you are ready or not.
There many factors to consider before getting started. First, look at what kind of business you have. Do you focus on business-to-business (B2B) or business-to-consumer (B2C)? Both work well for affiliates, although B2C tends to do better.
It’s likely that affiliate marketing can add another viable channel to your marketing efforts – especially if you’re doing direct response campaigns. Affiliate marketing allows your business to create another sales channel that is completely trackable down the click. This makes everything you do measureable and that will help with revenue projections and make it a reliable and predictable channel.
Affiliate marketing works well for a variety of business verticals including those that are selling computer and electronics, apparel, home and garden, pets, travel, automotive, Internet service providers, movies and music, software, and more. It also works well if your business is looking to generate leads like segments such as financial services, dating services, and insurance.
Because affiliate marketing incentivizes and compensates affiliates, they are highly motivated to get customers to take action (such as sign up for a newsletter, purchase a product, sign up for email, etc.). Having a stable of affiliates working on your behalf can be a big benefit to your sales.
Affiliate marketing also offers some incremental branding opportunities, but that’s not the main focus. So if you are looking for branding – consider other more appropriate marketing efforts such as advertising and social media (SeeUsing Social Media to Promote Your Brand.)
Because affiliates are not geographically bound, you will be able to have advertisers across the country. These affiliates can sell products to anyone on the Internet. Therefore, you should have a product that you sell nationally or globally. Local businesses don’t tend to do as well with affiliate marketing.
If your company already has the pieces in place to do ecommerce, starting a program will be much easier. Hopefully, your ecommerce business is generating at least $50,000 a month in sales. If not, it’s going to be hard to sustain a new program and advertising channel as affiliate marketing requires sustainable start up costs. (SeeAffiliate Program Start Up Costs.)
Understanding other methods ofonline marketing and advertising will help get your program rolling much faster. If you already have a handle on SEO, PPC, CPA and CPM (See Glossary of Terms.) it will dramatically minimize your learning curve.
You must have secure shopping cart already in place in order to attract good, reputable affiliates. They don’t want to take chances on merchants that have sketchy policies for buying and returning products. Affiliates need assurance that those they are referring to your website will be able to make secure purchases and have a high level of satisfaction in dealing with your business. They don’t want your problems with customers to reflect badly on them.
You’ll may also technical help getting the program set up - tracking, data feeds, creating the online affiliate ads, and reporting. Make sure the tech folks are involved in the set up, roll out and maintenance. (SeeGetting Executive Buy-In for an Affiliate Program.)
Affiliate programs are another viable revenue stream for your business, but they can also help boost other marketing initiatives such as advertising campaigns launching a new product. They can also help in gathering feedback for new products, improving features and bettering the overall user shopping experience. Make sure you have a full understanding of how the affiliate program will feed into your other marketing campaigns and efforts. (See Integrating Affiliate Marketing into Your Other Marketing Efforts.)
Finally,you will need to have a very good idea of what the overall costs will be and how much your company will get in return. Be prepared to create a detailed budget. (SeeAffiliate Program Start Up Costs.)
Once you’ve evaluated these factors, you can move forward and start your successful affiliate program