In a world of ever expanding channels and devices, marketers have to be very strategic about where they invest their budgets. And one of the biggest measures of success for marketers is a healthy ROI.
If you’re managing an affiliate marketing program on a low budget – or outsourcing the task out to someone else – you may be left with ineffective strategies, sluggish growth or dissatisfied clients.
Affiliate marketing should be a measurable way to boost sales. But how do you ensure your program has the potential to take your brand awareness to the next level? Does your program provide constant recruitment of new affiliates? Does it align with your clients’ strategies, as well as your own? American City Business Journals urges you to first be sure affiliate marketing fits into your company’s overall marketing and brand strategy before diving in. For this to happen, you’ll need to devote attention to all of your affiliate programs or find someone who can.
Some marketers get so bogged down in the weeds they end up actually wasting company resources, rather than addressing the nature of the challenges to their program. Digital marketers in particular should review their management techniques for new ways to grow strategically. With the potential to represent 5 to 15 percent of online sales and performance based payout structure, affiliate marketing is a necessary part of the digital marketing portfolio for retailers looking to grow their online sales, Multichannel Merchant reported.
Online or off, customers frequently feel more loyalty to the affiliate than the brand itself. That means marketers can improve their conversion numbers by choosing the best affiliates to begin with. After all, just a few partners could end up providing most of the traffic to your website.
A number of factors can signal that you have found a high-value affiliate:
The typical business can afford its affiliate marketing program as long as it converts into cash. Chances are, you’re already dedicated to hitting an ideal percentage of your monthly targets. So how do you ensure that all of your affiliates bring in enough customers and visitors to survive?
Make the most of your affiliate marketing budget.
If you’ve decided to build a strong affiliate team and program for your business, one of the first things you will have to figure out before approaching potential affiliates is your commission payout. Determining your commission payout is critical in developing a strong affiliate program; go too low and you will not attract affiliates or go too high and you’ll be spending your finances ineffectively.
I recommend joining affiliate networks and look at a variety of programs related to yours. Sites like Commission Junction, Share A Sale and LinkShare all provide affiliate management services (more on that in a future post). These sites list affiliate programs by industry or you can do a keyword search to find similar business and services to yours. You will be able to find information on the payout rate and the success of the affiliate program to get an idea of what commission your competitors are setting.
Now that you know what range your commission needs to be you need to determine if you can afford to deliver a competitive commission. Do you have the profit margin to give up 10-25% of each sale? Can you afford to pay $10 a lead? These and the following are important questions you need answers to before moving forward.
Affiliates may be somewhat of a mystery to many businesses as they are not often talked about when devising a marketing plan. But having a team of great affiliates can be a major asset when trying to grow your business.
Affiliates are like a commission-only sales force; you only compensate them when they generate a pre-determined desired action. For example, the action is typically when a new lead is generated or when a sale is made. This relationship is simple: you need new customers and affiliates can deliver them. You do not need to have a huge marketing budget to be successful when you have great affiliates doing the work for you.