Affiliate marketing is an ever-growing marketing tool that companies are becoming more and more familiar with. While influencers continue to grow in the realm of social media whether that be YouTube, Instagram, Facebook, etc. there has never been a better time for companies to turn their attention towards influencers in an attempt to increase sales.
What Is Affiliate Marketing?
“A marketing arrangement by which an online retailer pays commission to an external website for traffic or sales generated from its referrals.“
Affiliate marketing and influencers go hand in hand. Let’s say I’m a small business that wants to increase my online visibility and sales. If you’re coming from a small business or a startup business, generally speaking, you won’t have the money to set out on a crazy marketing spend. Affiliate marketing should be one of your first ports of calls. It’s as close to low risk / high reward as it gets. Let’s say I’m selling clothes through an online website. Affiliate marketing would work in a sense where I get in touch with an influencer, let’s say this is Instagram based. So this is an Instagram influencer; someone who is generating a reasonable amount of traffic, let’s say at a base of 100k followers. I propose to this influencer that they can advertise my product on their social media page.
How do affiliate marketing payments work?
There are a number of different ways I could pay them. My first option is i’d pay them an agreed-upon commission for every sale they generate for me. My second option is by paying them through the service provided. If I worked for a fashion industry I could send them packages of free clothes for in return an agreed number of Instagram posts. You see where I’m going with this…
For a small business; profit & ROI are very important, especially when starting up! How exactly does a commission basis work? I hear you say. I know which sales were generated by the influencer because those sales would come through a specific link. This could even be a code I setup that links directly through my website! I’m able to track the traffic that comes through this particular link and how many times it has been used. And that’s it! It’s that simple! I’ve now successfully marketed my product to a large audience. It’s only costing me a percentage of money that I earn via the influencer.
The benefits of affiliate marketing
Commission is and always will be a fantastic driver of sales in any area of the business world. People will work harder when they are rewarded for their performance, especially when you reward them with money! From the perspective of an influencer, the more they advertise and praise your product, the more money they are likely to make. Having influencers with large audiences praising your product on their social media gives credibility to your product and company.
People will see their favourite influencer advertising or using your product and it creates an element of trust between the influencer, your company and the potential customer. You’d be more inclined to purchase a particular toothbrush if you saw Will Smith using it, right? Influencers will create consumer confidence in your product and give your company a good image in the public eye. It’s always been important for a company to be reputable. Affiliate marketing makes this a lot easier than it should be.
The most significant benefit of affiliate marketing is the fact that there is very little risk involved. You are able to put your product on display in front of potentially millions of people without any upfront cost.
Before the internet, companies would have to spend a large sum of money if they wanted a celebrity/public figure to represent their product. With the internet, you can have an influencer that is pulling in 5 million views a month to their social media page represent your product, without spending a penny. The power of the internet to this day is still incredibly undervalued by so many businesses. The more you take advantage of the benefits social media has to offer, the more success you will begin to see with your business.
