If you go by numbers, affiliate marketing has been growing by 16% every year. The widespread growth of the business model can be attributed to it being a low-risk approach with a potential for huge returns. With effective affiliate marketing management, you can significantly increase your online business and ensure long-term, cost-effective, measurable results. Affiliate marketing is a flexible business model where you pay affiliates according to an advertising plan and different commission structure. You pay for the actual results either as a flat fee or a percentage of sales. In exchange for a minimal share, you get maximum exposure to a broader market for advertising your products and services. In an affiliate programme, you associate with a network of people who help in promoting your products or services. The more the network grows; the higher opportunities and better leads you have. In short, you increase your target market in no time without any risk or major investment. By effectively optimizing the performance of your affiliates and ensuring efficient affiliate marketing management, you can immensely improve the bottom line of your business. Here are some factors by which affiliate marketing management can support your bottom line:
# 1 Pay For Performance
In an affiliate marketing programme, you pay for performance. This implies that you only need to pay as per your commission structure either when an actual sale is made or a new potential customer engages with your brand. You do not need to pay in case no sales are made or an agreed action is not met like a customer subscription or click on a link. You agree on when to pay at the start of your affiliate campaign.
An affiliate can advertise your products as banners, textual links, and other creative forms. You can track the performance of the affiliates by using an affiliate software and an affiliate ID. You can specify when to pay a commision to the affiliates on the basis of following programs:
- Pay Per Click (PPC) – Pay a commission only when visitors are redirected to your website, irrespective of whether a sale is made or not.
- Pay Per Sale (PPS) – Pay a percentage of the sale amount after completion of a purchase.
- Pay Per Lead (PPL) – Pay when a visitor subscribes for a service or provides their contact info at your website.
The best thing about affiliate marketing is that you can reach out to your global customers with a group of affiliates starting with zero investment and pay only when you incur actual profits.
#2 Establish Costs Upfront
Affiliate marketing lets you identify how much a specific action is going to pay upfront. For example, you may decide to pay 25% of the sales price as commission on completion of a purchase. You make a profit of 75% plus gain a new customer. When you know how much you have to pay, you can decide a profitable price accordingly and figure out when it is worth to pay for a sale or a new lead.
#3 Low-risk Business Model
Promoting your product via affiliates provides a low-risk model of advertising where you pay for successful results and not actual advertisements. You may need to pay an advertising cost if you go by other alternatives for advertisement like radio or a newspaper ad. Again, you cannot guarantee a sale with such modes of advertisements. On the contrary, you generate profit with affiliate marketing by paying for actual results.
#4 Reduced Overhead
In comparison to other modes of online marketing, affiliate programmes require less time and energy. For example, you may need consistent link building in an SEO campaign to outreach potential customers. Also, you require consistent content creation for site optimization. Similarly, a social media campaign will require you to create fresh content, interact with users, reply to comments, address queries, and post comments on the content of others. On the contrary, an affiliate programme does not require intense management. All you need is to outsource an affiliate network and pay the affiliates for management and results.
#5 Access Foreign Clientele
With an affiliate program, businesses can effectively extend their foreign market. Native affiliates can help in promoting the products and services to foreign clientele. It is an efficient approach to test whether a product is a good fit before launching in the foreign market. After a successful affiliate programme, other marketing models can be established to ensure successful returns.
#6 Limited Upfront Costs
You can engage in an affiliate programme with a little upfront cost. You can consider paying your affiliates for their marketing efforts. In short, you can start small and swiftly grow your business with efficient affiliate marketing management.
#7 Leverage Different Skills
By efficiently managing your affiliate programme, you can leverage a variety of skills not otherwise available in-house. For example, your affiliates may include people who are writers, SEO experts, graphic designers or paid advertisers. They can help promote your product and grow your sales by employing a low-risk strategy and a flexible marketing approach. To put another way, you get different flexible modes and platform for promoting your wide range of products and services.
Affiliate marketing provides a cost-effective, direct marketing approach that ensures increased sales and better return on investment (ROI). Affiliate marketing increases direct traffic to your website and increases your rank on the SERPs which further compliments your SEO efforts. Furthermore, you are more likely to turn a lead into a successful sale with efficient affiliate marketing management which ensures an improved bottom line for your business. Reinvigorate your affiliate programme and ensure efficient affiliate marketing management to secure better ROI, guaranteed sales, improved customer base and conclusively ameliorated bottom line.
With these simple measures in place, you can easily use affiliate marketing management in the right way to generate favourable business growth.