Affiliate Marketing is as an effective strategy for online businesses to attract new customers. In traditional business, the referral marketing developed in a separate direction of MLM (multilevel marketing).
Many authors mistakenly confuse affiliate marketing with affiliate programs. However, affiliate marketing should be considered as an option of payment for services of individuals or organizations that deliver new target customers.
Definition: A way for a company to sell its products by signing up individuals or companies (“affiliates”) who market the company’s products for a commission.
Compensation for affiliate services can be formalized as:
- Pay per click
- Pay per lead
- Pay per sale
In affiliate marketing the income distribution takes place between two or more companies. The main business pays to other organizations or individuals (affiliates) for transfer or finding new customers . In this case, the process of interaction between such companies can be quite different : ads on the site , links , advice, cross-selling , online advertising and more.
Affiliate Marketing method is suitable for companies that want to get hundreds of new customers for a short period of time (six months or a year ). In addition, affiliate marketing allows you to attract target customer at a lower cost than other means of online advertising or offline promotion.
Successful affiliate marketing programs require significant investments. Managing such a program includes a variety of short and long-term objectives: recruiting, the launch of new shares , management team , review of new applicants to participate in the program , sending out newsletters and more.
Affiliate program management
Currently, there are several options for managing afffiliate projects. According to affiliate marketing expert Evgenii “Geno” Prussakov:
While looking at your affiliate program management options, you will have a choice to make: entrust the management of your program to an in-house staff or hire an external agency to handle your affiliate program management.
In-House Management – run the project yourself or by an employee of your company. In this case, you need a team of 3-7 persons, headed by a project manager. Each fulfills his/her part of the overall project, and the parallel work of all team members accelerates the implementation time of the program in business. Do not forget to spend enough time to bring the affiliate program to results that you expect.
Network Management – the use of already established affiliate networks that can offer you a variety of options for managing your program. Despite the high cost of this approach, you can get great benefits and advantages of working with a network that is easy to establish communication with the respective affiliates best for your program.
Outsourced Program Management – the option to hire an external program manager (OPM). OPM will offer you not only their experience in implementing similar programs in your industry, but are often cheaper than in the case of network management.
Once an affiliate program is set up and ready to go, the most important task is affiliate recruiting. Keeping the quality of affiliates in your program will be an ongoing task. You must be sure that affiliates are “fans” of your brand to achieve good results.