by Jul 31, 2018on
During certain times of the year, whether that’s the holiday season or a particularly busy season for your specific industry, it can be harder than normal to catch the ear of potential customers. They may be inundated with marketing from larger and more boisterous competitors, or the cost of media buys may be through the roof due to demand. But there are two frequently overlooked forms of marketing that can help you cut through the noise of competitors, reach potential customers the you previously didn’t have access to, and build loyalty with your current customers – all with a budget-conscious price tag!
An affiliate program is a program where your business rewards an affiliate (whether that’s an individual or another business) for each sale attributable to the affiliate’s own marketing efforts. Although this concept of revenue sharing pre-dates the internet, its popularity grew alongside the rise of eCommerce and online retail due to the benefits it provides to both merchant and affiliate. Merchants favor affiliate marketing because of the “pay for performance” model, meaning the merchant only incurs a small expense once a sale has been made, while affiliates are able to make money without having to create their own product, stock inventory, fulfill orders or process customer payments.
Although every affiliate program is unique, there are some overarching aspects that remain the same. As a business, you invite people to become an affiliate (or, you are approached directly by people wishing to become affiliates) and offer them access to all sorts of marketing material they can use to push your product or service. This type of material could be digital banner ads, print ads ready to be sent to a publication, radio ads with blank space for you to input your business name, a template website, or a product catalog with their contact information printed inside. For each sale that comes through as a result of the affiliate’s marketing efforts (tracked via a special purchase URL, or discount code used at checkout) you offer the affiliate some form of compensation: a percentage of the sale made, a flat payment after a certain number of sales, a credit with your business for future purchases, etc. The goal is to enable the affiliate to do the marketing for you, keeping your costs low while still promoting sales.
Affiliates can take a number of forms, from individuals trying to monetize their blogs, to social media influencers capitalizing on a large number of followers, to businesses who want to round out their online store with more products. Some of the most well-known companies offer affiliate programs, such as Amazon, iTunes and Microsoft.
Sometimes affiliate programs can grow large enough to introduce multiple tiers of affiliates, where an affiliate has their own group of people underneath them making sales for a smaller compensation than the original affiliate. Some of the most popular examples of multi-tier affiliate programs are Mary Kay, Tupperware and Pampered Chef.
The hardest part of implementing an affiliate program for your business is going through the process of defining exactly what the program will look like. You need to consider how you will attract individuals or businesses to become affiliates, what your compensation structure will be, how compensation will be tracked and paid out, what collateral you should make available to your affiliates, and what impact the program will have on your current business processes and resources. However, with some proper foresight you can put together an affiliate program that builds off itself and can provide a much needed boost to your bottom line.
While affiliate programs work by tapping into your affiliate’s pool of potential customers, loyalty programs specifically focus on getting your previous customers to become repeat customers (and you know what they say, it’s cheaper to get repeat business than it is to drum up new business). These programs work by offering a reward to the customer for making a certain number of purchases, reaching a certain total dollars spent threshold, or purchasing several times within a specific time period. These rewards can be VIP discounts, access to special events, prizes, or free products or services.
Loyalty programs are incredibly common and can be found across a variety of industries such as coffee shops, restaurants, airlines, grocery stores, gas stations, hardware stores, hotel chains, financial institutions and fashion retail stores. In fact, I’d bet that you reading this are either currently a member of a rewards program, or have taken advantage of one before!
The benefits to offering your customers or clients a loyalty program are numerous, but we’ve highlighted some of the top reasons below:
Through the years brand loyalty or brand recognition has consistently been one of the top motivators when it comes to purchasing decisions. By using affiliate marketing or loyalty programs, you tap into the power of the customers around you. Affiliate marketing uses these customers as brand evangelists, spreading the word about your product or services to their friends and followers. Loyalty programs, on the other hand, work to bring your current customers back time and time again, by offering perks and rewards for their loyalty. If your considering implementing an affiliate or loyalty program, or aren’t seeing the results from the program you already have,! We’d love to consult on your current marketing strategies, and how they can be improved to help you reach your specific business or marketing goals.