One of the best ways to grow your online business is through affiliate marketing. As a marketing channel, affiliate marketing can be totally controlled by the advertiser. As the advertiser, you have the opportunity to determine how much you are willing to pay your affiliates for each conversion, you develop the terms and conditions suitable to you, and you create the landing page. You can even determine how many affiliates join your program.
Because the cost of running your own affiliate program is low and the result is high, it might be more feasible to start your own affiliate program rather than join an affiliate network. Because creating your own affiliate program means you are in control, growing your online business will be much easier.
In this article, we will look at the pros and cons of setting up an affiliate program and the factors you should consider.
How Does Affiliate Marketing Work?
Affiliate marketing is similar to outsourcing where you are paying a group of promoters, called affiliates, to bring in customers. However, affiliate marketing goes a bit further—you only pay affiliates when their referral takes action. Most likely, they will send visitors to your landing page, but it is only after your visitors have become customers through buying or using your services that you pay the affiliate.
The affiliate marketing process is simple:
- You set up an affiliate program, and affiliates join your program.
- You assign each affiliate a tracking URL.
- Your affiliates promote your business, website, or products to potential customers.
- You receive a visitor from their referral and turn that visitor into a customer.
- Your affiliate is paid.
Benefits of Affiliate Marketing
- It gives you a good ROI (return on investment).
- You only pay for results.
- It can be cost effective.
- It helps you promote and thereby grow your online business.
- Your only expenses are the initial cost and affiliate commission.
Growing Your Affiliate Program
As we mentioned at the beginning of this article, the risk involved in affiliate marketing is low while the return is quite high. You only pay your affiliates when their referral converts to a customer. You don’t pay them for simply driving customers to your website.
Unlike joining a network where you would have to set things up, pay launch fees, and follow a strictly set of rules, growing your own affiliate program gives you much more freedom and control. You use a third party affiliate program software to run things, and you have the opportunity to hand pick your own affiliates.
#1: You Need to Recruit Affiliates
The more affiliates you have in your program, the more sales you will make. One way of recruiting affiliates is by contacting them through their own websites—affiliates usually have websites where they promote products. You can simply do a Google search with your keywords and see which of the results have affiliate links on their website. This means they are promoting similar products. You can email them, and tell them about your product and ask if they would like to promote them as your affiliate.
Another way you can recruit affiliates is through forums dedicated to affiliate marketing. You can join these forums and locate affiliates in your niche that would be willing to market your products. Drop them a line to let them know about your product and program.
Another way you can do this is through paid advertising such as placing ads in Google Adwords for keywords related to your niche. Alternatively, you can use Facebook Ads to advertise your affiliate program.
#2: Provide Affiliates with the Right Tools
Once affiliates join your program, you need to provide them with the right tools. You need to give them all the information that will enable them to sell your products. Some of the tools used in affiliate marketing include product feeds, promotional codes, banner ads, text links, and any other creative tools that you can come up with.
While a majority of affiliates will make do with these simple tools, advanced affiliates might want tools that are more sophisticated. You need to do adequate research and be familiar with the advanced tools that you may likely need.
#3: Maintain Stable Communication
As you probably know, communication is very important in business. While you may be fully dedicated to your own affiliate marketing program, your affiliates have several other things competing for their time and attention. If you want your affiliates to promote your program and help you sell more of your products, you have to maintain stable communication with them. You can create a newsletter or email campaign to communicate changes in your program.
#4: Perform competitive research
If you understand your competitors, you stand a better chance of outperforming them. Making your products competitive will be a determining factor in your sales rate. In order to perform competitive research, you can use affiliate networks to spy on your competitors. What are they doing differently? What are their commission rates? What promotions are they running, and how does this affect their conversion rate? You can do this for as many competitors as you like. Your aim is to get to know them and their strategy so that you can better yours.
#5: Wear Your Affiliates’ Shoes
Most affiliates are focused on how much revenue they can generate and how they can increase that revenue. As an advertiser, you have to think this way too. How can you help them maintain their commission rate (if they are happy with it) or motivate them to improve it? You can also check how your competitors pay their affiliates. After you complete Step #4, you should have a good idea of your competitors’ commission and conversion rates. Most of the data you will gather is determined by how they run their program. Armed with this information, you can modify and improve your own program to make sure you are doing better than your competitors.
Multiply Your Growth Efforts While Creating a Win-Win For Affiliates
Affiliate marketing can be effective and if you listen and take care of your affiliates, you can grow your online business exponentially while incurring minimal costs. And when you make adequate use of the top affiliate program tools while coaching your affiliates, you should see your earnings and, ultimately, your business grow quickly.