Every small business needs to make quick and recurring sales to stay afloat. And therefore, they require both loyal and new customers. But scaling a small business is not a very easy task, considering how small businesses work.
Many small businesses have found a quick and cost-effective way to increase sales and brand reach in the last few years. This method is known as affiliate marketing. In the post-pandemic world, where companies, particularly small businesses, are struggling to stay in business, the role of affiliate marketing has become more significant.
Currently, affiliate marketing accounts for over 40% of online sales. Businesses that adopt affiliate marketing are the small businesses that make the most money.
What is Affiliate Marketing?
Affiliate marketing involves partnering with other businesses, independent marketers, or influencers who will promote your products. It is a performance-based marketing model in which an affiliate earns a commission when customers buy your products through their link.
This marketing model has recorded huge success among subscription-based services, the product review sector, and SaaS business models. Companies are increasingly adopting this marketing model. If you’ve not done so, you’re missing out on a great opportunity to grow your small business, particularly because it is one of the ways small business owners pay themselves.
Whether your small business is already running or you’re still looking up what small business to start at home, or you want to buy a small business, affiliate marketing is something to keep in mind. It is a powerful way to generate revenue that will qualify you to get small business loans.
By now, you’re probably wondering how you can tap into this goldmine. There are two main ways to utilize the affiliate model. You can either:
- Partner with complementary businesses; and
- Create your affiliate program
We will show you how each of them works. Just keep reading.
Develop Key Partnerships
One way to get started with affiliate marketing for your small business is by developing key partnerships with other businesses/brands that cater to the same target audience as your business. It is also called co-marketing. Asides from making sales, it is a great way to boost brand awareness.
The best part of this type of partnership is that you get to promote your brand and generate sales without spending a penny. It is a mutually beneficial system for both businesses, so additional incentives will be needed.
A well-known example of such a partnership is the 2014 collaboration between Uber and Spotify. Users receive a promotion prompt that allows them to select a pre-arranged Spotify playlist for their journey when they hail a ride using the Uber app.
While it didn’t necessarily generate new subscribers for Uber, it helped boost their total rides and increased user engagement on the Spotify app. Both businesses were able to improve customer engagement and loyalty through their partnership.
Developing affiliate partnerships is a great start for businesses just venturing into affiliate marketing. Here are useful tips for developing successful partnerships.
1. Partner with a company that targets the same audience as your small business
The promotion will likely not be successful and profitable if you pick a company whose target audience is not the same as yours.
2. Reach out to trusted reviewers and comparison sites
Customers rely on product reviews to ascertain brand credibility. Partnering with well-respected reviewers and comparison sites will help build customer trust, which is needed to drive sales.
3. Ensure you have a smooth-running system
Before reaching out to another company for partnership, ensure your business operation is running smoothly. Fix whatever loopholes there are and position yourself for a great partnership.
Creating Your Affiliate Program
Starting your program requires a little more work and experience than the partnership program. It involves reaching out to affiliates and social media influencers to promote your products.
This is ahead of partnership programs and offers higher ROI at low customer acquisition costs (CAC). Even no deposit casino has recorded massive successes using affiliate programs. Here are a few tips to help you maximize your affiliate program.
1. Build a Strong Brand Identity
It is easier for affiliates to promote products with a strong brand identity. Before engaging affiliates, ensure you build up your brand identity; if not, they might struggle to promote your brand.
Many small businesses use social media to build brand identity; you can start from there. Also, ensure that branding is consistent across all platforms, including the websites of your affiliates.
2. Clearly Define your Goals and Success Metrics
Clear objectives will help you evaluate the success of your affiliate program. You want to be sure you’re getting a good ROI from the program. IF you’re not sure how to analyze and boost your affiliate program, you can hire a performance marketing manager to help with that.
3. Encourage Affiliates to include Your Products in Reviews
Product reviews help you build customer trust and loyalty. Encourage your affiliates to include your products in reviews and comparison articles on their websites. This will help boost brand awareness and ensure the success of your affiliate program.
4. Draw a Contract
After reaching the affiliates you want to work with, do not forget to draw a contract. It is a business deal, so you want to guard against any eventualities. A contract will keep everyone aware of their expected deliverables and keep them in check.
Affiliate programs provide a great way for small businesses to reach potential customers without incurring the massive cost of advertising. The digital world is speedily gravitating towards this model. Small businesses can now reach out to large audiences and increase revenue by adopting an affiliate program. While doing so, remember to set clear objectives, reach out to the right affiliates, and do not forget to draw a contract. What marketing tricks have you used or will use in your business? Share with us in the comments!