Maximizing the ROI of an Affiliate Marketing Program
Marketing is all about reach and engagement. It’s highly ineffective to have one without the other. And in today’s crowded and noisy online world, trying to reach and engage with the right people at the right time can prove to be enormously challenging. However, a well-developed affiliate marketing program could be the answer.
What Is an Affiliate Marketing Program?
“Simply put, affiliate programs, also called associate programs, are arrangements in which an online merchant website pays affiliate web sites a commission to send them traffic,” entrepreneur Tom Harris writes. “These affiliate websites post links to the merchant site and are paid according to a particular agreement. This agreement is usually based on the number of people the affiliate sends to the merchant's site, or the number of people they send who buy something or perform some other action.”
For the most part, online chatter focuses on affiliate marketing programs from the affiliate’s perspective. However, it’s actually far more beneficial for the business.
Here are a few of the business-side advantages:
- Performance-based. Because affiliates are paid commissions only after successfully completing the desired action, there’s little financial risk on your part. Affiliates must perform in order to get paid, which leaves you in a desirable financial situation.
- Increased exposure. Your marketing team can only do so much. When you have affiliates connected to your brand, you gain increased exposure and access to new audiences outside of your normal reach.
- Third-party validation. It’s one thing for you to make claims on your website or in your marketing campaigns. It’s much more credible when someone outside of your company validates the things you’re saying.
How to Launch a Successful Affiliate Marketing Program
Clearly, there’s immense value in running an affiliate marketing program. But not all affiliate marketing programs are highly successful. To ensure you reap the full benefits, you’ll need to successfully plan and execute. Here are some tips and pointers:
1. Get Cozy With Your Numbers
The first thing you have to do is review your numbers and see how much of the pie you’re willing to share with affiliates. This is an important factor for multiple reasons. You need to give up enough to motivate affiliates to feed you traffic, but not so much that you hurt your bottom line.
Affiliate marketing rates typically run anywhere from 5 to 30 percent (with most landing around 10 or 15 percent). You’ll have to determine whether these percentages are worth parting with.
2. Join an Affiliate Marketing Network
When launching an affiliate marketing network, you have two options. You can either set up your own tracking software and system — which requires a lot of time and work — or you can get set up with an affiliate marketing network. Most companies go with the latter.
“[Affiliate marketing networks] provide a marketplace where your affiliate program will be advertised to other affiliate marketers,” Shopify explains. “They also provide the tracking software for your affiliates so you don’t have to build your own tracking system.”
3. Recruit Affiliates
With all of the work you put into starting an affiliate marketing program, it’s important that you have affiliates in the program. In the early days, recruiting affiliates should be a major focus. Some will find you via your affiliate marketing network, while others will require some courting. Loyal customers are a great place to start.
4. Keep Them Happy
Finally, you need to keep affiliates happy and satisfied so that they’ll continue to promote your products. In addition to attractive commission rates, you may also offer other benefits and perks to those who stick around.
Maximize Your ROI
It takes a lot of strategy and creative energy to run a successful affiliate marketing program. However, most brands discover that the benefits far outweigh these upfront costs. Use this article as a guide to get to started and continually look for ways to scale and improve. Three to five years from now, you could look up and see a totally different business with greater reach, higher profits, and more opportunities.