The role of marketing has always been to bridge the gap between what companies and brands have to sell and what customers want to buy. With the constant evolution of customer wants and needs, marketing also evolves. Older theories and practices that were once widely accepted have found themselves obsolete. For any marketing to be effective, it requires that marketing as a discipline be analyzed, updated and tweaked to suit the current socio-economic and cultural drivers that exist in today’s environment.
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There exist over 163 types of marketing that are broadly categorized under two headings of Traditional and Digital. To avoid going deep down into multiple rabbit holes, we will limit this article to affiliate marketing.
For those of you interested in knowing the 50 most prevalent types of marketing, here’s a sneak peek.
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What is Affiliate Marketing?
We live in a hyper digital world. This world offers people a number of passive revenue generation streams to complement a monthly paycheck. One effective way to do this is to collaborate with businesses to help them reach a wider customer base and start a new passive revenue generator stream for yourself. Affiliate marketing involves the partnership between a brand, the affiliate (e.g. an influencer or business partner, independent sales person) and the customer.
Affiliate marketing works on the premise that the affiliate promotes the brand’s product or service to their audience and in return earns a percentage on the sale. The affiliate can promote a brand's product link or blog post or insta story or YouTube video etc. on their website or with their network. When a customer clicks on the link to buy, the affiliate earns a commission from the sale. The average affiliate commission can range from 1% to 30%, depending on the niche of the product and the value of the goods sold.
The Difference between Influencer Marketing and Affiliate Marketing
Influencer marketing is the collaboration between a brand and an individual who already has a sizable engaged audience that follows them (hence Influencer). This influencer is paid to endorse and promote the brand’s product or service. Brands pay the influencer because of their size of audience, interactions and engagements that the influencer will generate for the brand. Influencer marketing does not commit to sales of the product but rather to the increased interactions and engagement from their followers. If sales happen that’s a bonus. Influencers do offer their followers a discount that is offered by the brand to those who buy via the influencer promo code. Usually this discount is between 5 and 15% depending on the product niche.
Affiliate marketing on the other hand is where a brand incentivizes affiliates to promote and sell their product or service by offering a commission towards every sale that the affiliate brings.
What kind of products can be sold on an affiliate marketing basis?
Affiliate marketing is low risk as there is no cost to join most affiliate programs. It offers a way to generate constant passive income via commissions and without hiring additional manpower. Another piece of good news is that anything that can be sold online can be turned into an affiliate product (for example, internet software, hosting services, technology products, dietary supplements, vitamins, physical products, insurance, health, beauty and skin care products, gaming, home security systems, pet care, etc.)
The 3 types of Affiliate Marketers
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Unattached Affiliate
In this model, the affiliate has no connection to the product or service and therefore has no related skills or expertise that they can leverage on which to demonstrate their authority. These types of affiliates are at the bottom of the pyramid as they lack attachment to the potential customer and to the product.
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Related Affiliate
In this model, the affiliate has an existing relationship with the brand, the offering and the customer. This relationship enables them to influence and communicate expertise to generate leads and web traffic.
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Involved Affiliate
In this model, the affiliate has a deep involvement with the brand, the product and the customer. They currently use the product and already share a positive, healthy relationship with the customer which puts them in a unique position to recommend new products or services, as customers see the affiliate as a trusted source.
Where do Affiliate Marketers Fail?
Affiliate marketing has a unique allure… Simply because an affiliate can earn money while they sleep. However there are certain pitfalls that every affiliate intending to leverage affiliate marketing should be aware of:
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Trying to be everything to everyone
Creating a niche from the beginning is more important as this builds credibility, expertise and authority.
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Not providing additional value
Not only is the advertising of the product left to the affiliate to create and disseminate, customers want additional value before clicking through the affiliate link. Find new ways to offer bonuses when people buy through your affiliate link Vs. going directly to the brand website or store or platform.
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Not being transparent
Transparency is sacrosanct towards building trust with customers. Be open and honest that you are an affiliate and therefore earn money when a customer uses your link to buy.
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Hard-selling every time
Following a soft approach to affiliate sales is often the key towards closing a sale quicker. Affiliates who aid customers during their decision-making process are more likely to close the deal than those who push customers into buying something they don’t need.
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Not being tested by you
Customers can smell BS from a mile away. This is more so when they know that the affiliate has not used the product themselves. Being disingenuous with your customers does not build trust or loyalty or credibility.
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Not building active email lists
eMail marketing offers affiliates an easy and cost-effective way to stay in touch and on top of mind with their customers. Building and updating a live email list is critical to the continued success of your affiliate marketing.
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Not creating diverse income streams
Once you have built your credibility within a segment, you should look at promoting products from different companies within that segment or category. This way, as an affiliate marketer, you have multiple streams of revenue from different brands within your chosen segment.
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Relying only on organic traffic
Since advertising is left up to the affiliate, most often affiliates tend to leverage organic traffic to generate leads. Relying only on organic traffic is limiting for many reasons. Paid media can give your lead generation a big boost and complements well with SEO, Social networks, blogging, email marketing, pay per click, etc.
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Not tracking Return on Investment
Tracking Return on Investment and results from various channels is important to your continued success as an affiliate marketer. Without tracking results, you cannot know what’s working and what’s not.
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Not reusing content
As advertising is left to the affiliate marketer to create, and creating content requires time, effort and money, it is therefore important that as an affiliate you repurpose content and convert it into different formats. If you’ve written a blog post, convert it into a short video, or infographics, or an ebook, or a podcast.
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Not scaling up
For any business (even an affiliate marketer) to achieve continued success, it requires that processes which can be automated, be automated. Automation allows for you to free up your time to do other, more important things that are needed to be done at the new scaled-up level.
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Not leveraging effective affiliate strategies
Not all Strategies deliver the outcomes desired in becoming a successful affiliate marketer. Ensuring that customer targeting, creating high quality content, promoting products that are within your niche etc. are critical for continued business success.
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Not treating Affiliate Marketing is a Business
New affiliate marketers sometimes tend to forget that their affiliate marketing is more than a passive income but a real business. It requires your time, effort and money to be sustainable and successful. It does not turn successful overnight and requires you to identity your niche, find products to promote, create high-quality content, build and grow your audience, drive traffic to your blog or social pages and convert traffic into sales.
How to succeed with affiliate marketing?
For any affiliate marketing to be effective and sustainable, the affiliate needs to:
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Build a minimum viable audience
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Identify what your audience needs
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Find good quality products that fulfill those needs
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Identity a brand to which you can become an affiliate
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Chose which offers you would like to promote
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Get a unique affiliate link or code for each offer
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Use a soft-sell approach to promote those products to your audience
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Give your audience something special or extra; that way they buy from you Vs. anyone else or go directly to the brand
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Use your own platform (example website, blog, instagram, youtube, twitter, facebook, linkedin, email, etc.)
Why set up an Affiliate Marketing Program as a Brand?
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Affiliate marketing offers brands a way to expand their marketing and sell more, without having to spend money upfront on advertising or needing sales teams and other marketing overheads.
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Affiliate marketing offers brands a way of expanding into other similar niches with little effort or any additional expenses.
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Affiliate marking offers brands a way to sell in new markets through a small network or small businesses like affiliates without relying exclusively on platforms like Facebook, Amazon, Google, etc.
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Affiliate marketing offers brands an effective way to tap into larger audiences outside their immediate network.
How to calculate your brand’s affiliate fees?
Brands can work on 3 models
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A percentage of sales
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A flat rate
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Mixed Dynamic
However most affiliate programs prefer to work on a ‘percentage of sales’ model as it is not only easier to calculate but also ensures that the affiliate stays hungry. The mixed dynamic model allows for the affiliate to earn additional percentages basis a tier system. Whichever model a brand choses to implement, its affiliate commission must be attractive. Attractive commissions will make the affiliate work harder; the more they sell, the more the brand profits and they profit too. As long as they earn money from their marketing efforts, affiliates will continue to sell a brand’s products. Care must be taken to ensure that affiliate commissions do not cut deep into a brand’s profits.
Conclusion
There are many ways that marketers approach marketing basis their products, audience, resources, strengths, opportunities and what make most sense for the business. Their goals remain that as long as marketing connects with the desired audience and provides a return on investment, it’s good marketing. Affiliate marketing offers brands and affiliates new ways to reach new customers while earning money. As an affiliate (even though you might not have invested money into becoming one), you still have to do some bit of heavy lifting up front to make sure you succeed. For the Affiliate Marketers, the most important thing is also the most challenging one, that is - performance. Brands that offer affiliate marketing programs usually offer good quality products; the success of an affiliate is dependent on building trust with your audience and the quality of your recommendation. Affiliate marketing is a great way to make money; however it is not a get-rich-quick scheme. Once affiliates begin to treat it like a real business, they will reap rewards.
Related Reading: How to design your marketing mix, How to allocate your marketing budget, The power of being customer centric, Creating sustainable strategies for business growth, How to develop a high performance Marketing Funnel, Devising revenue models for your business, Building marketing momentum for growth, How Influencers marketing actually accelerates growth and sales, How to drive outcomes not outputs,
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