How Businesses Can Benefit From Affiliate Marketing

Affiliate marketing is a strategy where affiliates promote products and services by a merchant and receive a commission for every successful sale. An affiliate is any individual that capitalizes on online and social networks to promote products and services. In essence, affiliate marketing is a performance-based marketing method that offers benefits and advantages to marketers and brands alike. If you’re a merchant with an excellent product and you work with affiliates who make a good match for your brand, you have the potential to boost sales and spread brand awareness.

Businesses can opt to engage in affiliate marketing if they’re looking to expand but don’t have the budget for traditional advertising. Implementing an affiliate marketing strategy takes time and it’s important that your affiliate marketing program equips your affiliates with the right tools and incentives to promote your products successfully. Here are some affiliate marketing statistics you should know about:

Affiliate marketing makes up 16% of global commerce sales. This means that roughly one out of ten sales made globally can be attributed to affiliate marketing success.

Affiliate marketing is considered the most important customer acquisition channel for 20% of brands. About 54% of brands surveyed include affiliate marketing in their top three most important channels.

Affiliate marketing is estimated to be worth $8.2 billion this year.

How Affiliate Marketing Works

1. The business starts a relationship with an affiliate either directly or within an affiliate network. See our list of the top affiliate networks and platforms here.

2. The affiliate shares the product via their own social media or web platforms. Offers can either be a discount code, link, or coupon.

3. The affiliates’ followers are potential customers. Whenever they click an affiliate link, they will be directed to the business’ landing page.

4. When the customer makes a purchase, the business wins the sale and the affiliate earns a commission from the sale based on pre-agreed terms.

Affiliate Marketing Benefits for Businesses

Affiliate marketing campaigns can benefit businesses in a lot of ways. By launching a program, they can open a profitable sales channel, gain a competitive advantage, reach new audiences, and gain valuable customer insights. The performance-based nature of affiliate marketing is also cost-efficient and offers businesses financial flexibility.

1. Open a profitable sales channel

Businesses access new opportunities to scale with affiliate marketing. One high-quality affiliate can bring in lots of traffic, leads, and sales compared to a traditional advertising campaign. This is because experienced affiliate publishers have already succeeded in building trust-based relationships with their online communities and their product recommendations are highly regarded by their followers.

2. Variety of viable products

Some products do better with affiliate marketing than others. If you offer a wide range of products, you can design campaigns around products that do well in the affiliate marketplace. A product that has good profitability may be any one or two of the following characteristics:

· High-end or high-margin
· Ready for online distribution
· Scalable
· Fits a niche
· Trendy
· Shareable

It would be worthwhile to pick products that are most suitable for your campaign rather than providing a general link for all of your goods. If you have a clear focus, your campaigns are likely to be more effective. Businesses with scalable or a large variety of products that are viable for affiliate marketing have a higher advantage to grow sales and visibility.

3. Access to influencer communities

Affiliates may also include social media influencers who have established an engaged online community. Most industries today like fashion, tech, beauty, home, health, and more have influencers in their respective niches. Affiliate marketing allows businesses to tap into global audiences with the help of these influencers. By working with influencers in your niche, you can promote to customers who are already interested in your products.

4. Performance-Based Advertising

Because affiliate marketing is performance-based, tracking and managing your campaigns and campaign results is much easier compared to traditional advertising. You work with whatever budget you have and enjoy access and control over your campaigns. Affiliate marketing is similar to other forms of advertising in terms of the patience and time required before you start to see results. But affiliate marketing gives you access to data and insights that could tell you more about your customers and which campaigns are performing well. Affiliate marketing isn’t designed to be your sole marketing strategy but it can definitely enhance your other marketing campaigns and help you achieve better results.

5. Competitive Advantage

Many of the world’s top and global brands have their own affiliate programs because the benefits simply could not be ignored. Increase your brand’s competitiveness through affiliates by understanding your industry and learning how your competition is utilizing influencers to enhance their marketing campaigns. If you are a small business, you can think of how to make your offers more attractive to affiliates. Even if you don’t see a lot of sales initially, your brand awareness and visibility can dramatically grow with the help of affiliates. The more people see you or your business, the more likely they will want to purchase or pay for your services in the long run.