Affiliate marketing is a way of leveraging your community of customers in order to drive growth, and it can be very effective. U.S. affiliate marketing spending is expected to rise to $6.8 billion this year, with 81% of brands utilizing affiliate marketing in some form.
Making the most of your budget for digital marketing, though, means that you need to target your marketing investment correctly. Nowhere is that more true than when it comes to affiliate marketing. In this guide, we’ll show you the fundamental elements of a successful affiliate marketing strategy, and how it can benefit your eCommerce business.
1. Find an Effective Partner
For most eCommerce companies, starting out with affiliate marketing will mean partnering with one of the many affiliate marketing programs that are already in existence. Among the most popular of these are Amazon, Avantlink, Clickbank, Impact Radius, Rakuten, and ShareASale.
All of these companies act as a broker between you and your affiliates and are also a great way for you to learn the basics of affiliate marketing before launching your own, bespoke program. Using a partner can also have other benefits because it will simplify some of the more technical aspects of running an affiliate marketing program – not least compliant data retention – that can otherwise overwhelm the capabilities of smaller eCommerce businesses.
2. Commission Structures
The average eCommerce commission is somewhere between 5% and 15%, but this rate will vary depending on a number of factors. These can include which industry you are in, the price of your products, and the value of each affiliate partner to you. There is nothing wrong, for instance, using target market analysis to identify a number of discrete audiences, finding affiliates in each space, and then paying them different rates depending on their level of expertise.
Equally, when you first start an affiliate marketing campaign, you’ll need to ensure that you are paying competitive rates in order to attract the most effective affiliates. For this reason, the first step for many managers is to check what other affiliate programs are paying, and then committing to matching this.
The next step is to find affiliates who have genuine traction with the audience you are targeting. There are many ways to do this, but often the most direct is also the most effective: reach out to bloggers who cover the industry you are in and ask them if they would be interested in a mutually beneficial marketing arrangement.
You can also use a number of paid services to find relevant affiliates. Most of the platforms we’ve mentioned above include search functionality for doing so, and products like Linkdex and AffiliateRecruitment.com can be effective as well. Or you can simply try a basic Google search on a few of the keywords you are targeting, and approach the authors of the best-ranked content.
4. Focus on High-Value Products
The most effective affiliate marketing programs are those that focus on a relatively narrow range of high-value products. By encouraging customers to purchase a relatively expensive product, you can begin to build a relationship with them that will inevitably lead to smaller purchases in the future, so it doesn’t make sense to spend valuable digital marketing budgets on encouraging small sales.
The data back this idea up. The top-performing eCommerce businesses have an average order value of $82 and are relentless when it comes to promoting their flagship product lines. Focusing on these products also has the advantage of simplifying your affiliate program, since you will be making fewer (but larger) payments to your marketers after successful sales.
5. Discounts and Offers
It may seem that discounts and offers are a distinct tactic to affiliate marketing, but in reality, the two marketing techniques are inherently linked. Ideally, your affiliate, content, and pricing strategy should be integrated parts of a seamless whole, and offers can provide your affiliates with fresh material to promote your brand.
The best eCommerce platforms are those that allow you to achieve this integration. If, for instance, you’ve put a lot of thought into how to be a responsible marketer during the recent crisis, and have discounted products in order to achieve this, you should provide your affiliates with content they can link to that stresses this.
6. Be Flexible
Finally, make sure that your eCommerce platform is flexible and scalable enough to take advantage of the extra visitors and sales that your affiliates will generate. Research indicates that fully 84% of small businesses only offer limited forms of payment and that this is a major annoyance for customers. Provide more ways of accepting payments online, and the new markets that your affiliates open up will quickly provide sales.
In addition to payment platforms, you should also consider expanding your sales capability beyond just your standard eCommerce store. Many eCommerce businesses have found that using the Facebook marketplace in conjunction with affiliate marketing can be a very effective way of leveraging community engagement with their brands.
The Bottom Line
Affiliate marketing isn’t new, and it doesn’t tend to appear on lists of the top eCommerce trends. Instead, it’s a fundamental marketing technique that can dramatically improve the efficacy of your overall marketing campaigns.
As we’ve shown you above, make sure that you are using the right influencers, and focusing on the right products, and you should start to see the value that affiliate marketing can offer to your business.
Nahla Davies is a software developer and tech writer. Before devoting her work full time to technical writing, she managed—among other intriguing things—to serve as a lead programmer at an Inc. 5,000 experiential branding organization whose clients include Samsung, Time Warner, Netflix, and Sony.