This is chapter 2, The Benefits of Affiliate Marketing, of Successful Affiliate Marketing for Merchants.
There are a number of benefits for your company when operating an affiliate program, including increased sales, driving traffic to your site, generating qualified leads, as well as extending the reach of your brand.
So, there are numerous reasons to have an affiliate program. Ultimately, since you’re working in pay for performance, you’re going to have lower costs for your acquisitions.
That said, affiliate marketing is not for everybody. There are some questions you should ask yourself to determine whether affiliate marketing makes sense for you and your business.
Is your product or service currently selling well for you? If your site recently launched, I’d encourage you to get it off the ground and work out the kinks before considering an affiliate program.
Also, look at your margins and determine if you’re going to be able to offer compensation that is competitive with other affiliate programs in your vertical. Some companies try to launch an affiliate program with a bare bones offer and then wonder why it never got off the ground.
Additionally, decide if you’re willing to invest in proper staffing. Either an in-house affiliate manager or outsourced to an agency. But don’t try to run an affiliate program on auto-pilot. It just doesn’t work.
Back to benefits of the affiliate program. It offers an efficient, scalable marketing network. You can build it out as you wish, whether it be a dozen affiliates or hundreds. But don’t obsess over the number of affiliates in your affiliate program.
Instead, concentrate on optimizing the performance of the affiliates already in your affiliate program.
An affiliate program also enables you to collect some measurable and predictable data on individual affiliates or the affiliate program as a whole. This will aid you in forecasting the future performance of the affiliate program.
Affiliate programs are somewhat risk free. Some people will try to sell the model as entirely risk free, but of course, there are some fixed costs involved. While affiliate marketing is more fiscally effective than a lot of other methods, it’s not without risk.
Having an affiliate program will also turn the focus of management more to the long term – establishing and maintaining relationships, rather than a quick fix like a media buy.
Finally, treat your affiliates as business partners, not rented mules, as some affiliate programs have done.
Keys to a beneficial affiliate program are activating, educating, and rewarding your affiliates.
Focus on making your affiliates and your business successful.
Go back to the Successful Affiliate Marketing for Merchants Video Book.