Affiliate marketing is a great way for businesses to take advantage of leveraging other people’s networks to reach a larger audience. It is a form of performance-based marketing that allows companies to pay a commission for referring customers to their products or services. In this article, we will discuss the various benefits of affiliate marketing for businesses.
Why should businesses use affiliate marketing strategies?
Affiliate marketing is one of the most effective and cost-efficient strategies that businesses can use in order to boost their online sales and revenue. Affiliate marketing involves leveraging the reach and influence of well-known, authoritative figures and or websites in order to drive traffic and sales to your own website and products. By leveraging the power of influencers, businesses are able to reach a wider audience, increase brand awareness, and drive conversions.
Affiliate marketing is an excellent way to increase sales and revenue for a number of reasons. It is not just about voucher sites, which is a common misconception of affiliate marketing, there is a wide range of publishers you can access to promote your brand, such as cashback sites, content creators, influencers, closed group platforms and tech providers. See below the top benefits of using affiliate marketing as part of your overall digital marketing strategy.
What are the benefits of using an affiliate program as a marketing channel?
1. Low upfront cost and therefore low risk
Affiliate programs require no upfront cost and can be quickly launched without the need for additional staff or resources, so businesses don’t have to invest a hefty sum to get started. Payments are only made once a sale is completed which means getting started with this digital marketing method is relatively risk-free.
As you can depend on the affiliates for content creation you don’t need to rely on paying someone internally for this. Although at first, you may want to have an eye over the content, as trust is built up over the duration of the relationship, you can leave the affiliate to market your product or service for you and all you need to do is approve content before going live.
By leveraging the reach of influencers, businesses are able to gain access to a large audience with minimal financial investment. Low investment equals low risk!
2. Performance-based cost
Affiliate programs are performance-based, which means businesses only pay affiliates commissions when they generate a sale. This means there is no wasted cost whilst you’re testing different affiliates out, if they don’t work out and bring in no sales, you don’t have to pay them, unlike a channel like PPC which requires an upfront investment to get your ads running and viewed, regardless of whether they lead to a sale in the end or not.
Therefore, affiliate marketing is a good option for businesses that are on a tight marketing budget.
3. Large reach potential
Affiliates can help a business reach a much wider audience than traditional marketing channels. With the right affiliates, a business can target certain demographics and regions, as well as create personalised content for a specific audience.
If a business is wanting to break into a new target audience, using the right affiliates can help you to reach those that are outside of your current following.
4. Specific targeting
Some affiliate programs offer exclusivity, so you are able to reach a specific group of people with a special discount in a closed group platform, without other people knowing about the offer. An example of this would be joining the NHS’ Blue Light Card discount scheme or a student platform such as Unidays or Student Beans.
This means not everyone will be aware of your discount code so will continue to pay full price, but you could drive more sales from the specific group that the affiliate platform is targeting.
5. Improves brand awareness & acquires new customers
Affiliates can help raise brand awareness and boost the visibility of your website to acquire new customers. By partnering with affiliates, businesses can rely on the trust that consumers have in the influencer’s opinion to drive sales as consumers are more likely to purchase products recommended by someone they trust, rather than products that are simply advertised.
This can help a business to establish visibility in its niche by using affiliates to showcase the quality of its products and services to new prospective customers.
6. Builds long-term relationships with affiliates
Using affiliate programs can help businesses to build long-term relationships with their affiliates. Businesses can keep in touch with affiliates using regular communication methods, as well as by sharing regularly updated creatives and newsletters to inform them of any new offers, product launches, or changes to the program.
This can help ensure that the affiliate program is successful in the long term and generates more sales for the business.
7. Improves perception & builds trust with customers
Affiliate marketing is a great way to create a positive perception of your business and build trust with consumers. As affiliates will provide their own opinion of your brand to their readers, businesses can boost their profile as users will often believe an outsider’s review of your products or services, over your own marketing.
This will help consumers to gain trust in your brand and products, as a third-party source is recommending you.
8. Drive incremental revenue
Executed correctly, affiliate marketing is a great way to increase sales on your website and generate the incremental revenue you’re looking for. Publishers that sit at the bottom of the funnel, such as cashback and voucher sites, can support reaching this goal. Offering additional incentives to customers through affiliate sites will give them extra motivation to go ahead and make that purchase.
You have to be careful to onboard a strong publisher mix though to ensure that you’re not over-relying on one type of publisher. You want to avoid this, because if that publisher stops working with you, the regular income you’re used to seeing come through, will vanish.
9. Easy to measure success
Affiliate marketing campaigns are easy to track through networks, and therefore you can easily see how much traffic each program brings in and ultimately how many sales each program leads to. This makes it easier to measure the return on investment of the program and make decisions about the future of your affiliate strategy.
For more information on how to track affiliate marketing success, see our blog which outlines which KPIs you should be tracking measure affiliate performance and how you can track them.
Overall, affiliate marketing is an excellent strategy for businesses to utilise in order to boost brand awareness, sales and revenue. By leveraging the reach and influence of well-known, authoritative figures, businesses are able to reach a larger audience and drive conversions. This can help businesses to increase their sales and revenue, while also building trust with their consumers.
If you need help getting started with affiliate marketing for your business, get in touch with our experts today for a chat.