As a small business owner, you’re no doubt aware of the importance of marketing - it’s how you let consumers know about your business, attract new customers, and ultimately boost your revenue and sales.
In the marketing arena, there are tonnes of tools at your disposal, from email and SEO to social media and pay per click, and with so much involved in the day to day running of your business, it can be difficult to keep up with the latest marketing trends.
Don’t know where to start? Don’t sweat it, we’re here to help with our guide to one of the fastest-growing marketing tools of the moment - affiliate marketing. We’ll tell you what it is, why it’s so popular, and how you can start using it to benefit your business today.
Affiliate marketing is an arrangement made between a retailer who sells online and an ‘affiliate’ who advertises their products or services in exchange for payment.
The payment is typically a percentage of the sale price, but in some instances can be a ‘pay per click’ arrangement whereby for every lead they drive to a business’ website they’ll be rewarded.
Let’s take a look at affiliate marketing in action. For the purposes of this example, we’ll use a made-up business called ‘GiftsRus’.
Affiliate marketing is taking off big time in the business world right now and for good reason.
The takeaway? Affiliate marketing efforts have been shown to be remarkably effective in driving sales and ultimately helping businesses thrive.
The research so far suggests affiliate marketing is equally if not in some cases more effective than other marketing channels, including emails and paid searches - both of which cost businesses more, but why?
One of the major draws of affiliate marketing for businesses is it allows them to exponentially expand their reach, and we all know the more people who hear about your business, products, or services, the better.
Think about it, if you share an advert to your own social feeds and you have 10,000 followers, no matter how good the advert is that’s as many people as will see your ad.
Now let’s say you have two affiliates each with 30,000 followers on social and they both share your ad - you’ve increased your reach sevenfold without the time-consuming task of organically growing your follower base.
User-generated content is super important in today’s marketplace. It’s essentially content promoting your business but by people outside of your business.
Why is that so great? Because 92% of consumers turn to friends, family, colleagues, or influencers for product recommendations.
Shoppers have grown wary of businesses bigging up their offerings, after all, it’s just a tad biased, isn’t it? They’re much more likely to believe what a peer or ‘real’ person has to say, and user-generated content does just that.
Social proof is everything when it comes to business in this day and age. It’s the psychological concept that people are inherently programmed to change their behaviour based on what other people are doing.
The likes of word of mouth marketing, customer reviews, and people outside of your workforce advocating for you - yep, affiliate marketing - all constitute social proof, and it’s mega impactful for businesses.
Despite all the pros associated with affiliate marketing, it’s not always the right fit for every business.
First and foremost you need to have an online presence to engage in affiliate marketing so you can accurately track the performance of your affiliates.
Secondly, in order for affiliate marketing to make sense, you need to have large enough margins on your products or services that you can afford to pay a commission. If margins are tight, you’d essentially be eating into your own income by paying an affiliate.
There are a handful of ways to put affiliate marketing in action for your business.
Before we go, we want to share our top tips for affiliate marketing to set you up for success.
For more great resources designed for small business owners, be sure to check out our choc-a-bloc blog.