Spending on affiliate marketing is going up almost every year, and there are no visible signs of this slowing down. As a result, it is not uncommon to get asked by owners of businesses if affiliate marketing works or not. While there is little doubt affiliate marketing can improve your sales performance, the better question to ask would be, “Is affiliate marketing right for my type of business?”
Affiliate Marketing: What is it?
This is a type of marketing where marketers are rewarded for every customer they are able to bring to your particular site. Affiliates can be bloggers, influencers, etc. To help you better understand affiliate marketing and how it may be able to help you, let us look at this particular marketing channel a bit more closely. We will start with some of the more basic questions.
Affiliate Agencies and Affiliates: What Exactly Are They?
The primary objective of any affiliate agency or affiliate partner is to make sure you get more traffic heading towards your website. This is very important as it will increase the chance of conversions and ultimately increase sales. Increasing sales is the number one priority for any marketing campaign.
For instance, let us assume you are a winemaker. The agency will, in most cases, have affiliates who are in the wine industry market your products. They will do so on their respective platforms (a website, maybe?), which will help drive their audience towards your business.
You should know, and this is important, that many affiliates make their living from advertising money. The way these affiliates are monetizing their passions is by driving the audience they have towards your business. Their passion could be writing about wine.
How Many Customers Can They Bring In?
You should rest comfortably knowing affiliate marketing is a form of marketing where revenues are shared. This means increased revenues will be beneficial for all parties involved. Affiliate agencies will try to drive as much traffic as they possibly can towards your site. There have been cases where affiliate marketing was able to increase sales by about 30%. Other factors that will influence this figure are the unique sales pitch you have and also how compelling is the offer on hand?
How Much Will It Normally Cost?
If we assume you are using an affiliate agency or consultation service, you will most likely need to pay a monthly subscription fee. On top of that fee, you will also have to give them a percentage of sales. This is pretty obvious; the fees and the expenses structure will entirely depend on the agency or consulting service you have chosen. However, one thing is very likely to remain constant across the board- all of these activities are based on performance. This basically means the more sales they can provide your business, the more money they will make.
Who Isn’t Suited for Affiliate Marketing?
This is a particularly difficult question to have to answer without knowing the business model a company has in place. However, there is one thing you should be aware of. If your profit margin is pretty slim, it will make little sense to have to share this with other people. This is why affiliate marketing may not be the best suit for your business if you have very slim profit margins. However, one thing to keep in mind is that if the volume affiliates can bring in goes up, then it will start to make sense.
Any Potential Risks?
There are some affiliate agencies that have engaged in foul play and immoral actions just to get more audience. They made use of improper targeting practices to get more people to click on their Ads. Also, there may be times when you do not really like the content surrounding your content. Just for example, if you have a particularly high-end wine, you will definitely want it to be associated with a website low in quality. This is why you ought to conduct your own proper research to make sure you pick the right affiliate agency or consultation service.
How to Know If It is Right For Your Business?
Just like any other marketing channel, affiliate marketing is a tool you have at your disposal. Depending on how you use it, it can most definitely help you grow your business. This is why you need to have affiliate marketing as an option every time you start appraising your marketing plans.
Just like all other marketing techniques and strategies, there is a need for experimentation. This means you will most likely need to try out affiliate marketing to see if it will work for you. The best thing about affiliate marketing is the ROI. ROI calculations with this type of marketing are very basic and straightforward.
You can expect to get back more than just a dollar every time you spend a dollar. This is because affiliate marketing focuses on short-term goals in order to create an instant impact on your sales figures. This type of marketing is not the best one for increasing brand awareness or bringing in long-term value. There are other types of marketing methods much better suited for those things.
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