Many businesses are looking for new strategies to increase sales and revenues right now. Retaining existing customers is vital, but so is attracting new ones to balance your revenue streams. And with customer acquisition costs (CAC) increasing roughly 60% in the last five years for both B2C and B2B companies, you’ve got to find new ways to increase revenues without extra work.
Affiliate marketing is one channel many companies are considering to diversify their revenue streams. They’re creating their own programs to boost sales in new markets or are participating in them to earn extra cash. Statista reported that spending on affiliate marketing in the U.S. was forecast to reach $8.2 billion by 2022, an increase of 195% from five years ago. Who wouldn’t want to get in on that action?
Here are a few of the ways affiliate marketing can save your business right now, whether you want to start your own or participate in one.
Running an affiliate marketing program is an easy way to expand brand awareness and market reach without investing heavily in marketing. For example, if you have 25 affiliates in your program, each promoting your products to their entire audiences, you could potentially get your products in front of thousands of people every time. That’s a considerable number of brand impressions you’d have to generate (or pay for) yourself.
Even if you pay for impressions, you’re not guaranteed a positive reaction. After analyzing billions of searches on mobile devices, SparkToro found that paid ads only generated 11.38% click-through rates, organic searches generated 26.68% click-throughs, and a whopping 61.49% generated zero click-throughs.
With your affiliate program, however, you’re generating more click-throughs without investing significantly in marketing or paid ads (yes, you’re paying out a commission to the affiliate marketer, but it’s a lot less than other channels.)
Increasing traffic to your business’ website is always a challenge. Organic search results depend on your SEO, and your marketing efforts can impact your numbers significantly. You also want good traffic, people who are not surfing to your site and then bouncing away.
By working with affiliates who understand your industry and market, you’ll get targeted traffic that’s appropriate for your business. This traffic is pre-qualified by your affiliate, making it easier for you to maintain the relationship whether they buy from you or not. You’ve now created brand awareness with the traffic and will be top-of-mind with them in the future too.
Engaged New Customers
The hard work of attracting new customers is already done when they buy through your affiliate program. Affiliate marketing converts them more easily from a new into an existing customer, and the purchase is an indicator of future buying potential too.
Now it’s time to start marketing to them through email marketing. Tag affiliate customers as an affiliate customer and consider running a separate campaign for them because they might’ve gotten a deal with their affiliate purchase. They’re a slightly different engaged customer and need to be marketed differently.
Your SEO can be heavily influenced by affiliate marketing and the backlinks you’ll get through affiliate blog posts and social media posts. Search engines will bump up your rankings based on these backlinks and relevance as your affiliate shares your products and links too. This is particularly effective if you’re working with high-performing affiliates with a highly engaged audience that shares posts and links about your product or brand.
Limited Start-Up Costs
Starting an affiliate program is not free, but your time, resource, and money investment are lower compared to your marketing spending and resource budgeting. Once you’ve set up your program, it requires minimal time and resources to maintain, and your hard-working employees will be free to concentrate on your core business. Your business will continue to generate revenue in parallel to your core activities, no matter if you run your own program or participate in the program of someone else.
Affiliate marketers want to partner with top paying affiliate programs and will stick with you to generate the sales that’ll bring in additional revenue for you. Ensure that your affiliate program offers them enough earning potential to make it worth their while. If they earn a solid commission, they’ll continue with you long-term, keeping this revenue stream growing in the future.
Deeper Relationships With Existing Customers
If you’re participating in an affiliate program by recommending products to your own customers and audience, you’ll deepen the customer relationship. How? Because you’ll be recommending other products and services that can help them too. You’re offering them more value by seeking out, reviewing, and recommending these products. Research the products thoroughly to ensure they’re complementary to your business and will add value to your customer’s experience with your products or services.
By both creating your own affiliate program and participating in affiliate programs as a publisher, you’ll create two separate revenue streams for your business. You’ll be able to generate revenue faster as a publisher because you’ve already built a relationship with your audience. That’s typically what takes the most time for affiliate marketers, but you’ll be one step ahead of them. That revenue can sustain your business as you develop your affiliate program and get it off the ground.
There’s no limit on how much you can earn as an affiliate marketer or program owner. It all depends on how good your affiliate network is and how engaged your audience is. Affiliates will want to earn as much as possible, which boosts the revenues you earn through your program too. Likewise, when you’re the publisher, you want to earn as much as you can from the program you’re participating in too. Digital products and services typically offer higher payout rates than physical products because of the low cost of production and delivery. But it depends on the program you’re a member of.
Affiliate marketing can be an easy way to create new revenue streams and save your business. It’s more of a long-term solution for your business as it takes time to either develop your own program or generate income by participating in an affiliate program.
In either case, it only costs your time. With an upfront investment and minimal ongoing hours, affiliate marketing can be an effective way to save your business once the economic recovery begins.