Question: “I know that some of my competitors are using affiliate marketing to attract customers. I’m curious about it, but I’m not sure how it works exactly. How does affiliate marketing work, and is it something worth pursuing?”
With this strategy, you would basically create an “army” of Internet publishers (bloggers and webmasters) who would promote your products and services for you. Depending on your business model and your marketing budget, it might be worth pursuing. The better you understand it, the easier it will be to decide. So let’s look at an example of affiliate marketing in action:
Example of Affiliate Marketing
Let’s say I own a printing company. I want to attract more customers from the Internet, but I don’t have a very big staff. My marketing department is one guy. I could create an affiliate marketing program to broaden my reach. I would first devise some kind of commission structure, so my affiliates have a reason to promote my business. I decide that I’ll give them 10% of whatever sales they generate. Then I start recruiting publishers.
In this scenario, I would go after bloggers or webmasters who get a lot of web traffic for my keywords. These people would then promote my products / services, and they would earn commissions for the sales they generated.
This is how affiliate marketing works, in a nutshell. The most complex part of it is tracking sales, commissions, etc. So if you’re serious about pursuing this kind of strategy, you should work with a service like Commission Junction or LinkShare. They handle most of the technical stuff for you, and they also give you access to a lot of publishers. It’s the easiest approach, by far.
Is it a Good Marketing Strategy for You?
Is affiliate marketing any good for your business? To answer this question, you need to consider two key factors — cost and control. This kind of marketing strategy can remove some of the promotional burden from your shoulders, but you’ll pay for those benefits. For one thing, you’ll have to create a strong enough commission structure to attract successful publishers (the kinds of people who do this for a living). You’ll also pay some kind of fee to the affiliate networking service you use.
Control is another key consideration. With this method, you are essentially creating a bunch of marketing “deputies” who will promote your business far and wide. Are you comfortable giving this kind of mission to strangers? If not, then affiliate marketing might not be a good idea for you. Granted, you can establish all sorts of guidelines for your program. But that doesn’t mean people are going to follow them.
My advice is to experiment with it on a small scale, with some hand-picked publishers. That’s the best way to measure the results, without losing control of your program.
This article answers the question: How does affiliate marketing work, anyway? Stay tuned for more Q&A…
