6 Reasons to start an affiliate marketing program for your small business
There are so many ways for small businesses to market their products and services. How can you decide which is the most profitable? Often the answer is that many different marketing strategies together are the best solution to maximize time and resources and increase profits. These strategies can include email, social media, SEO, PPC, and more.
You've probably heard about these strategies and their benefits by now, but there's another strategy that can help you avoid upfront costs and reduce risk while increasing sales: affiliate marketing. Have you ever considered this part of your marketing arsenal? If not, you could be leaving a lot of money on the table.
What is affiliate marketing?
When a company or person promotes another persons products, they are engaging in affiliate marketing. The goal of affiliate marketing is to generate revenue by promoting third-party products and services. If a customer buys through an affiliate link, the affiliate receives a commission. Affiliates are similar to the vendors of the company whose offerings they are promoting. The affiliate model is based on revenue sharing.
As a small business, you provide a financial incentive for others to promote and sell for you.
Affiliate marketing is a performance-based marketing method that has proven extremely successful in SaaS business models, subscription-based services, and the product review industry. For a variety of industries, this is a risk-free way to improve traffic. , increase brand awareness, and get more sales.
What are the benefits of affiliate marketing to small businesses?
Small businesses often have limited resources and budgets. Sometimes they don't even have a dedicated marketing team to promote their business. Affiliate marketing offers an inexpensive and efficient way to drive more traffic to your business and increase profits. While a great affiliate marketing network is a huge asset for small businesses, you still need to be selective about who you choose. Instead of including everyone in your program, it’s better to do a verification process.
Just as an e-commerce search marketing strategy affects your brand exposure, your affiliates also affect your brand image and reputation. Similar to the search engine strategies used in e-commerce, affiliate marketing helps increase your product exposure and increase sales.
1. Save money
Compared to the cost of advertising or other marketing initiatives, affiliate marketing is far more profitable. Because it's performance-based, affiliates only get paid when they make a sale. Businesses set up the commission structure in advance and avoid wasting money on ineffective advertising campaigns.
2. Enhance social proof
Today's consumers are better informed and have higher expectations than ever before. They rely heavily on social proof of brand reputation. According to a study, almost 95% of consumers read online reviews before making a purchase decision. Engage with an engaged audience who trust them, reviews of their partner products or services provide credible social proof to potential buyers.
3. Reach a broader targeted audience
Small businesses can tap into their affiliate audience, thereby expanding their brand reach. These new audiences may not have been easy to target and identify with other marketing and advertising methods. By choosing affiliates that align with your brand, you ensure that the traffic you receive through an affiliate link is directed to those who find your product or service useful.
4. Boost brand awareness
The goal of any online business is to be easily recognized by as many potential buyers as possible. As affiliates drive more traffic to your website, they increase your brand awareness and reach. Because affiliates earn a portion of your income, they have a vested interest in your success, are loyal advocates for your brand, and help build trust with potential customers.
5. Improve conversion rates
The ability to track your company's performance allows you to make operational improvements in the future. By collecting data from affiliate marketing tracking, businesses can gain important insights into where their customers are coming from and why they are buying. The rich data collection helps businesses improve their conversions by making changes to their website, providing more engaging visual creatives, and identifying which affiliates are generating the most revenue.
6. Gain a higher return on investment (ROI)
For most marketing and advertising campaigns, determining ROI can be a challenging and unpredictable waiting game. The performance-based affiliate marketing model is designed for profitability. Businesses don't pay potential buyers by impressions or clicks, only for completed sales. This is one of the main reasons why small businesses choose to use affiliates to promote and sell their products or services. By channeling its promotional efforts through an affiliate program, gains influence and direct access to a receptive and highly targeted audience. to buy from your company.
The digital world is moving toward an influencer model that allows businesses to reach massive audiences, form partnerships with affiliates, and grow sales profitably. As advertising costs increase, affiliate programs offer a powerful way to reach potential customers at a fraction of the cost.