By Graeme Sandwell, Managing Director, www.paidonresults.com,
Affiliate marketing is an excellent way for ecommerce businesses or companies with an online presence to drive sales and growth.
Research has outlined that 'investing in affiliate marketing' is a top priority for business growth in 2014 amongst SMEs, but it’s important for any company looking to go down this route to do their homework and do it properly.
It’s not always as simple as setting up an affiliate programme and then watching as various affiliate websites start queuing up to promote your products or services. It takes a little time, effort and patience to set up, but once everything is running right the rewards can be very worthwhile.
Many business owners have misconceptions which could interfere with the success of their affiliate programmes. Some of the most common myths are as follows:
1. Revenue boost will be immediate — Once an affiliate program is set up, it's not as simple as sitting back and waiting for the revenue to come in. Businesses will see an eventual uplift in sales, and the boost could be huge, but it's not always right away. It depends on a number of factors, such as what affiliate websites are choosing to promote your brand, how user-friendly a website is and what information merchants provide their affiliates with too.
2. It's only beneficial to big businesses/retailers - When it comes to launching an affiliate program, the size of the business is irrelevant. Very small companies can have hugely successful programs, whilst international corporations might not be doing so well in that department. It's all down to the work you put in.
3. Affiliate programs are difficult to set up - It doesn't take much work to set up an affiliate program. Once merchants sign up to an affiliate network and set everything up, such as the commission rates they'd like to offer and the materials they have to provide to affiliates (banners etc.) they are pretty much there.
4. Affiliate programs are self-sufficient - Merchants can't leave an affiliate program to run on its own without ever changing anything or managing it. For example, content supplied to affiliates needs to be updated constantly to reflect different times of year or seasons and merchants must approve sales quickly to keep affiliates happy and make them want to continue promoting their brand.
5. It's down to the affiliate websites to make the program a success - Merchants can't blame their affiliates if their program isn't performing well, because that's down to them too. Perhaps their commission rates are set too low, or they aren't communicating with the affiliates regularly to keep them in the loop and give them material to use and promote.
6. Affiliate programs are expensive to set up - The start-up costs of an affiliate program aren't as high as some businesses may think. Businesses can set up their own program, but more work is involved than if they were to join an affiliate network when most of the hard work is done for them. Most affiliate networks require an initial sign up fee and then a monthly fee, but it is very affordable.
7. High commission rates will make an affiliate program a success - Affiliate websites will be jumping at the chance to promote a brand if they are being offered 50% commission per sale, but merchants have to make sure that they can afford this kind of rate, which is unlikely without it effecting their bottom line.
8. Consumers dislike affiliate promotions - Most of the time, online shoppers aren't even aware of the concept of affiliate marketing; that a website will earn commission if they end up buying something through a retailer they've seen on there. Besides, all shoppers want is the best deal and products, so as long as a merchant has this to offer and an affiliate website is promoting the fact it's likely to end up in a sale.
9. There's no need to be picky about affiliate partners - Whilst many merchants will think 'the more the merrier', it actually pays to be picky when it comes to which affiliate websites they partner with. A program should be set up so that all affiliates have to apply to be accepted, because if a merchant doesn't want to be a "discount" brand but ends up on a deals site they might not be too pleased.
10. An affiliate program won't have a huge impact on sales - Within the first year of running an affiliate program, most small to medium sized retailers will see a sales lift of 10%, whilst others will see much more than this. As long as the work is put in and the right content is provided, the impact on sales could be as much as you want it to be.
So, whilst affiliate marketing can be an excellent tool for those seeking business growth, it’s very important that it isn’t attempted half-heartedly. Mistakes are frequently made which are easily avoidable. These are just some of the common misconceptions about affiliate marketing, that those who are considering going down the affiliate marketing route should be aware of.
Graeme Sandwell is Managing Director of www.paidonresults.com, a performance based Affiliate Marketing Network, independently owned and based in Scotland. Paid On Results has a history of innovative technology and applications designed to be transparent and simple for all partners and clients. It is the fastest paying affiliate network in the UK.