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The internet has greatly revolutionized the business environment. With more consumers getting the bulk of their information from the internet, businesses quickly realized that setting up websites and taking full advantage of internet tools is a very effective way of not only staying visible but also drumming up sales.
One of the ways businesses can take advantage of the internet to reach a wider audience and drive up sales is through affiliate marketing. In affiliate marketing, an affiliate will take advantage of their online marketing skills and audience to market merchandize or services on behalf of a business. The affiliate then earns a commission each time a sale is made through their connections.
Affiliate marketing is a mutually beneficial arrangement in which the more sales an affiliate makes the more commission they earn. In turn, the business also gets more profit from the increased sales. With businesses projected to spend in the upwards of $8.2 Billion in 2022 on affiliate marketing – an increase of more than 50% in just five years.
Here are 5 Reasons Why Your Organization Needs Affiliate Marketing
1. Low Start-up and Running Cost
Unlike traditional advertising, affiliate marketing costs very little to set up and run. You do not need an expensive budget since you do not need to purchase advertising space or hire a team of advertisement experts. In fact, the only thing it is likely to require you is to take time to identify and vet the affiliates you would like to work with. Once you agree on the terms of the partnership with the affiliate and the commission, the deal is done and it is now up to the affiliate marketer to put in the effort for directing traffic and sales to your business.
In contrast with other internet based marketing services such as pay per click (PPC), affiliate marketing is a performance-based partnership. This means that you don’t simply pay for the traffic directed to your company’s website – you only pay a commission for actual sales. Here you get maximum value for your money since the affiliate takes the initiative to come up with their own methods for marketing your products on your behalf and bring in paying clients. You pay no additional cost whatsoever to keep the affiliate marketing campaign running for the duration of your partnership with the affiliate.
2. Low Risk
Most marketing strategies tend to be expensive undertakings that often require relatively large budgets. As such, they always run the risk of hurting the business if the campaign does not pay off. This is especially dangerous for companies in their infancy and those that survive on small profit margins since they run the risk of going bankrupt if the marketing efforts fail to pay off. The efforts may even backfire on the company if, for example, an advertisement inadvertently comes out as offensive to the general public and potential customers.
In affiliate marketing, these risks are almost non-existent. There is no advertising budget to hurt a company’s finances and budget. Since the commission and payments to the affiliate are often fixed, it is easy to simply pass on (or at least share) the cost of marketing with the customer by adding it to your service’s/merchandizes price. In this way, your business gets marketed without the traditional risks associated with marketing campaigns.
3. It is Highly Effective in Building Recognition for your Brand
Few things are as important to any business as building a brand that stands out and is easily identifiable by potential customers and the general public. However, this tends to be a slow, arduous and expensive process that often takes years. With affiliate marketing, you get a chance to quickly and cheaply build a brand for your company. Since your affiliates tend to be well-connected and with a bigger audience than what your company can achieve on a short notice, you get access to this big population of potential customers. This is especially so when working with affiliates who also happen to be social media influencers.
When your affiliate constantly posts about your business to their huge following, your company quickly gets recognized by the public. While they may not all buy from you immediately, they will at least learn about your company and the services you offer, making it possible for them to come to your business at a later date when they require your services. it also encourages them to recommend your services or products to their friends and family, thereby cementing your brand to the hearts and minds of the public.
4. It Quickly Drives Traffic To Your Site
In addition to the other strategies you use to advertise your business, affiliate marketing can help to, which can then be potentially be converted into sales. It is prudent to choose affiliates whose audience resonates with the products you sell. If you have a bookstore for example, you can choose authors and publishing houses as your affiliates. This will not only bring traffic to your website but the traffic will be much more likely to be converted to sales since it originates from people who already have interest with books.
In addition to this, affiliates can indirectly lead to a higher search engine rating since your affiliate’s audience is likely to search for your company in an attempt to know more about your products and services.
5. High Return on Investment
One of the biggest benefits of affiliate marketing is the extremely high rate of investment it offers. A recent study conducted in the United Kingdom put the ROI ratio at 1:15, meaning that companies on average gained back 15 times more from the money they spent on affiliate marketing. Very few other marketing strategies present such a high ROI, especially given its low risk. This is important especially for companies that are not well-established as it greatly lowers your cost of starting up.
When you invest in affiliate marketing, you get affiliates with a considerable level of sway over their audience. These people are therefore more likely to buy your services since there is some level of trust between the affiliate and their audience as compared to generic marketing companies.
Conclusion
In conclusion, affiliate marketing is a great way to market your company on the digital platform and drive up sales. It provides you with a marketer with a trusting and receptive audience who will do their best to earn you paying customers since it is in their best interest as well as yours. You essentially get a marketing team that works for you as you focus on building your brand in other ways. The low risk involved and high return on investment means that the marketing efforts resulting from it are unlikely to hurt your business financially.
With some of the most successful businesses in the world aggressively pursuing and greatly benefitting from affiliate marketing, perhaps it is time you considered trying the model for your own business
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