Money, of course.
But have you ever wondered how all those millions of online businesses, not mention search engines, directories, news sites, social networks, and blogs are making so many billions? One of the main answers to this question is: Affiliate Programs.
To help you catch this marketing wave and start an affiliate program of your own to boost your online sales, Affiliate Software HQ has created Start Affiliate Program 101, a short introduction to the benefits and mechanics of affiliate programs.
Affiliate Programs: The Future of Marketing
In the old days, big corporations used to hire advertising agencies and spend astronomical sums promoting their products on TV, billboards, magazines, etc. Nowadays this happens less and less, because this old-school marketing model never guarantees results. At best, it means that the companies’ message reaches the masses. As far as I’m concerned, that’s a waste of money! Think of all the ads you see (or ignore). Think of how much of what is contained in those ads is completely irrelevant to you. Every time you see an irrelevant ad, that means that a marketing company is wasting their client’s money. That’s not how affiliate marketing works!
Affiliate Programs are built on a win-win model – both the advertiser and the affiliate win simultaneously. You as, the the advertiser, only pay the affiliate when they bring in a customer. You only pay them a percentage or a fixed amount that you have determined in advance. You are happy because your profits soar, the affiliate is happy because they got paid a commission. It’s win-win.
For this reason, everyone on earth, from big corporations with a range of brands and thousands of products to promote to individuals with a single ebook to sell, is starting their own affiliate program. Imagine affiliates as your international army of sales reps, working day and night to promote your products without any expectation of compensation until they make a sale. This system works! About $6.5 billion in affiliate commissions is paid out every year – which means that the advertiser’s revenues are 5-10 times this. All those sales were generated at little or no expenditure on advertising!
That’s why affiliate programs are the future of marketing!
How an Affiliate Program Works
An affiliate who joins your program is assigned a tracking code which is automatically inserted into links pointing to various pages, products and services on your website.
When your affiliate promotes your business, they link to it using one of these tracking links.
When a potential customer clicks on that link, they are sent to the corresponding page on your website and continue the process towards purchase.
Your affiliate software tracks the fact that this potential customer was referred by that particular affiliate, and if the customer completes the sale or lead, then the tracking software credits the affiliate’s account with their commission.
The affiliate program software can also use a cookie to track whether that customer comes back on another occasion and buys then. If so, the affiliate is still credited with their commission.
There are many variables involved in this process: whether the commission is a fixed rate or by percentage, whether you pay for sales or leads or both, how long is the life-span of the cookie, what type of tracking mechanisms are used, etc. The ability to vary these aspects is something that most (but not all) affiliate program software gives you.
Who Should Start an Affiliate Program?
It seems that the real question is who shouldn’t start an affiliate program? Practically every business wanting to boost sales with low financial risk should have an affiliate program today. The risk is very small and the potential gain is huge.
The original businesses that were successful with affiliate programs were either selling hard goods (like Amazon) or digital products (e.g. ebooks, software). But nowadays affiliate programs are wildly successful in every industry. Travel, legal, medical, real estate, construction, education, non-profit – you name an industry, product or service, and you will find that someone has found a way to sky-rocket revenue using an affiliate program. Even accountants use affiliate programs to attract new clients today! Not every type of product is service works with the traditional “percentage of sale” commission structure, so the best affiliate software allows you to choose other commission structures, like pay-per-lead, pay-per-impression, or pay-per-click.
One concern that holds people back from starting an affiliate program is they feel that their online presence is not strong enough for such a hi-tech marketing method. It is true that to have a successful affiliate program you need a professional website with a strong sales/lead page that closes the deal. However, there are all-in-one software options that make setting up your website, processing payments, and running an affiliate program all very easy and affordable.
If you want to start an affiliate program, learn about the affiliate software options on the market.