Due to the mutually beneficial nature of affiliate marketing, it has grown in popularity among eCommerce brands and social media influencers over the past few years. This guide will discuss what an affiliate marketing program is, why you should consider implementing one, and how to get started.
Affiliate marketing is a system in which an individual, often a social media influencer, promotes your product in exchange for a commission. Sales are tracked and attributed to the affiliate through a special referral link. Commission can be a flat dollar amount or a percentage. Other incentives, such as free products can also be provided to affiliates.
With the decline of traditional marketing and the rise of social media, affiliate marketing programs have become a cost-effective way to find new customers, build brand awareness, launch new products and increase sales.
Promoting through affiliates who already have an established audience is a great way to reach new customers in a more organic way. Affiliate marketing can be an effective way to reach a niche market or break into a new demographic or market. Additionally, the affiliate has already built trust with their audience, meaning their marketing efforts will have a better chance of converting. Furthermore, because the affiliate only earns commission on sales, affiliate marketing has a great ROI.
Affiliate marketing can also be used to capitalize on platforms that your current marketing strategy is underutilizing. For example, if you are using paid ads on Instagram but not on YouTube, finding affiliates that post content on YouTube is ideal. This can also help you optimize your marketing strategy because if you see your affiliates are performing well using a particular platform, you can use that insight for future marketing efforts.
Nevertheless, an affiliate marketing program may not be the right strategy for all eCommerce companies. For example, a business with a small profit margin may not be able or willing to provide a cut of each sale to the affiliate and continue to make a profit. If affiliate marketing is right for your business, the following is a step-by-step guide for setting up a profitable affiliate marketing program.
Some brands choose to include all their products, but focusing on products with a high AOV for your program tends to be more effective. Once you have determined which products you want affiliates to share, providing them with promotional tips and key messages can help make your affiliate marketing program even more successful.
After selecting the products, the next step is determining the commission package. Look at some of your competitors who have already established an affiliate marketing program, use their commission rates to set a competitive commission of your own. Cash is often considered the most desirable reward among affiliates, but some eCommerce brands choose to offer free products or store credit instead. If offering cash, commission is most often a percentage of each affiliate sale but can also be a fixed dollar amount per sale. The average commission rate ranges from 10% to 30%.
An affiliate management app will help you quickly launch and manage your affiliate marketing program. There are many options to choose from and each app offers different features, benefits and pricing packages. It is important to research the available apps and determine the best fit for your business. Some of the most popular affiliate management apps include Refersion, FirstPromoter, and UpPromote.
To recruit affiliates, you should use various methods such as sharing information about your program on social media and through email marketing. You should also create a dedicated landing page on your website that highlights the benefits of joining.
You can also utilize affiliate sites such as ShareASale or Rakuten Marketing. Affiliate sites provide access to a large database of established affiliates. Additionally, some affiliate management apps, like Refersion, come with an affiliate discovery feature.
After recruiting your affiliates, it is important to maintain regular communication. Set your affiliates up for success by providing them with rules and resources such as tutorials, graphics, examples of pre-written social posts and approved hashtags. This will help affiliates familiarise themselves with your brand, products, and expectations.
Track affiliate performance and use your affiliate management app to analyze the overall effectiveness of your program. Your affiliate management app will provide metrics such as total affiliate sales, sales per affiliate, average order size, total payout, payout-to-sales ratios, gross margin, total number of affiliates, number of new affiliates and number of affiliates who left the program. Use these metrics to adjust and improve your program.
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