As a small business owner you may want to consider the benefits of using a third-party to help you drive potential sales traffic through to your online business. Known as affiliate marketing, this online partnership can be attractive to SME’s as it can mean a controlled and often lower cost per acquisition. For a business with a  small budget this can be an attractive proposition since,  unless a result is achieved (for example an actual sale takes place) no commission is paid to the third-party.

So what is Affiliate Marketing?

Affiliate marketing has grown steadily over the last ten years,  hand-in-hand with the rise of  e-commerce.  Online partnerships have become a prominent part of the digital marketing mix.  You are probably all familiar with larger established affiliate programmes like Amazon and VoucherCodes, well you can create partnerships and gain referrals from all sorts of sources such as review sites, directories, niche blogging sites and industry specific sites.  At a simplistic level, affiliate marketing is essentially an arrangement whereby one website refers online shoppers to a merchant’s site for an agreed commission or fee. This could be as a CPC (cost per click) or more usually, CPA (cost per acquisition).

“You could say that Affiliate marketing is the ultimate form of marketing communications since it’s a “pay-per-performance marketing” method i.e. it’s a commission-based arrangement where the merchant or business selling products only pays when they make the sale or get a lead.” Smart Insights

The Benefits of Affiliate Marketing for small businesses

If you spend time planning and managing affiliate marketing, then it can be an effective sales tool.  Affiliate marketing can offer your business:

• Controlled cost per acquisition with little wastage – no fee is paid unless a result is achieved
• Help towards SERPS visibility (don’t forget affiliates are often SEO and PPC experts enabling you to reach an audience that you may not have the resources to reach)
• Help generate awareness for your product and brand amongst new, targeted audiences

What you need to consider

Of course there are things you need to consider before rushing headlong into affiliate marketing. Of primary importance is to choose the affiliates you are going to work with carefully. Make sure you:

• think very carefully about commission. Work with your affiliate partner to come up with something that works for you both. Remember the EPA (Earning Per Acquisition) is  likely reflect the effort they put into promoting your business. Equally importantly, it must be profitable for your business too. If the commission is too high then it negates any benefits the referral brings, especially if you are offering special promotions and offers as well.
• check that they are promoting your business in front of a new audience that it is difficult for you to reach,  as you don’t want to cannibalize and pay a commission on sales that you would have made anyway.
•  verify that they are using ethical, white hat marketing techniques to promote their business. Having your business advertised on inappropriate sites may cause harm  to your brands reputation.
• you have the resources and time in place  to work with your affiliates – a good relationship is far more likely to generate better results.

How to get the best out of Affiliate Marketing

The best way to get the most out of affiliates is to look at it as a partnership. Instead of randomly choosing loads of affiliates to work with, choose a few appropriate affiliate networks that operate within your industry or have knowledge of your particular niche.  This way you will be able to better manage and control the partnership. The relationship should be two-way and good communication is essential.  Talk to your affiliate partners, find out what offers will bring in the best success rate and let them know well in advance of any new products or features you may have coming up.

How to effectively track response through your shopping cart

Of course, just as important is the monitoring and tracking of your affiliate partnerships. This can be time-consuming especially if you have a number of different partners or affiliate networks. A good option is to integrate some Affliliate Marketing Software. There are some excellent third-party solutions available that can help you manage all your different affiliate partnerships by tracking clicks, referrals, commission, payments and so on.

You could chose either to install your own affiliate marketing software, for example:

• JROX.COM
• iDevAffiliate
• OmniStar OSI Affiliate
• Post Affiliate Pro

Alternatively you could decide to become part of an established affiliate network like:

• ClixGalore
• ShareASale
• Tradedoubler
• Zanox
• Affiliate Window
• Rakuten LinkShare

Whichever route you decide to go down, your shopping cart software should be able to integrate the tracking script from your chosen third-party affiliate software onto your order complete web page.

For example, with ShopIntegrator,  you can easily paste the  tracking script from your affiliate marketing software into the order completed web page, enabling you to identify the customers that arrived on your website from an affiliate / partner site, then went on to make a purchase from your site. The order value is then automatically fed back into your affiliate marketing software and each of your affiliates can be assigned their commission accordingly.

The process becomes automated freeing up your time to better manage the relationship you have with your affiliates, rather than being bogged down by administration.

For further information on integrating third-party tracking scripts visit ShopIntegrator.

We’d love to hear your thoughts and experiences on this post, so please do leave a comment.

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