Affiliate marketing is an accessible and assistive channel that can help plug gaps in your overall strategy, making it an effective way for almost any business to grow.
However, it doesn't work for everyone, and it is better at supporting some goals more so than others. If you want to know whether affiliate marketing is a must for your brand, here are four key questions to ask yourself.
Do you have a good profit margin?
A large part of the affiliate marketing channel is built upon offers and paying a small cost on conversions that affiliates assist in driving for you.
A business interested in affiliate marketing must have the ability to discount its products or pay a commission (cost per acquisition/CPA) to affiliate partners and still make a comfortable profit. The inability to do this restricts your ability to incentivise a sale.
For example, imagine you have an average order value of £50. You want to explore options to try to increase this, and one strategy is to generate a voucher offering 10% off when the customer spends £70. Or, let's say you want to get your brand in front of savvy customers using cashback sites — you'll likely need to pay a 2–4% CPA on the purchases referred.
Does your business have the margins to offer these kinds of incentives?
Glass Digital’s affiliate team have vast experience in creating the right offers for our various affiliate contacts, and we can support you in creating the types of offers that will benefit your business but not damage your margins. For more information, take a look at our post: 5 reasons to use discounts and voucher codes in your affiliate marketing campaign.
Are you losing customers at basket level?
The basket phase of a transaction has a notoriously high bounce rate, with one study showing an average cart abandonment rate of 88.05%. In this phase, a large chunk of the customer journey has been completed and the shopper has added a product to their basket, but there are still some users who are not ready to fully convert. A business can incorporate several affiliate strategies to mitigate this issue.
As lots of shoppers will search for discounts before making a purchase, one effective option is to give exclusive voucher codes to affiliates, granting them pay-per-click (PPC) advertising rights for brand+voucher terms. We have several trusted partners who we regularly grant codes to for our clients; the key is to have the line of contact to control what they are promoting.
Ecommerce sites can also use basket abandonment overlays to try to re-engage users showing signs of exiting. Affiliates who manage the technology will receive a CPA for all positive engagements with their overlays before a purchase.
For logged-in customers, another effective technique is to send follow-up emails about products left in carts. You can even offer bespoke discounts to increase the chance of conversion.
Do you want to focus on new customer acquisition and scale on a lower budget?
All businesses know that finding new customers is more difficult and expensive than maintaining existing ones. Through affiliate marketing, a business can reach new customers through launching on different platforms or working with influencers within the industry. All of this can be done at a lower overall cost in comparison to upfront budget for a TV/media campaign, for example.
The key benefit to highlight is that CPA is only paid on successful conversions. This massively lowers any risk for businesses new to affiliate. (For more information, check out What is affiliate marketing and how does it work?)
There are several options in the early stages of launching a campaign, but a great start is to offer a CPA increase to new customers on cashback sites. This information can be gathered within an affiliate pixel, with commissions paid out accordingly.
If you want to target specific demographics, it is usually possible to do so. For example, you can offer exclusive discounts to NHS workers to connect with this audience while improving your brand image. However, in order to compete, businesses must usually be willing and able to create strong offers.
Do you want to work with more influencers and content sites?
Affiliate marketing opens the door to new strategies your business may not have explored previously. Influencer marketing is growing at a huge rate, expected to be worth over £10 billion in 2021. There is a wide variety of influencers who already engage with your target audience and would be perfect to promote your product or service further.
At Glass Digital, we prefer to focus on micro influencers as they have a smaller upfront cost and a highly engaged audience. A business looking to do affiliate marketing must ask itself if it is willing to gift products for free and potentially pay upfront costs to the right kind of influencer.
Content and blogger sites are a big focus of a successful affiliate campaign, as they allow a business to expand its reach and improve conversions without having to discount products and offer a high CPA. One example is the Independent newspaper's IndyBest section. This is one of the best sources of impartial product reviews, and it generates a large amount of referral traffic. We have several success stories of our clients being listed on this site.
Content is the number-one way to grow the affiliate channel for a business, but it is a longer process that takes time to show results. A strong piece of content can drive traffic for weeks, months, or even years to come. These opportunities can also be used to support your wider marketing and branding goals.