Resource: Affiliate Marketing Series
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1. 10 Affiliate Marketing Keywords you want to master.
Are you new to Affiliate Marketing? Are you sometimes confused about the meaning of certain terms
and jargon? The following article provides a brief explanation for some of the most important keywords
you should know about Affiliate Marketing in order to
understand its basics and the importance for your company's growth.
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Affiliate or Publisher:
It is one of the 4 major players in the generic affiliate marketing business
model and is also called the publisher. Broadly stated, the affiliate is an
intermediary between the customer and the merchant; it could be an individual
or an Affiliate management Agency.
Affiliates receive incentives and
compensations from the merchant (see below) directly based on how effective
they are at attracting traffic, purchasing or executing any measurable interest towards
the merchant's products or services.
Merchants:
It is another major player in the Affiliate Marketing process. They are sometimes
called retailers or brands. Just like any merchants, they make the products available
and render services upon purchase.
However, in the Affiliate Marketing model, they also
hire affiliates network (see below) and set both promotional and sales objectives for
them to achieve. They pay the network strictly on the basis of performance.
Customers:
They are attracted to the merchants' products or services thanks to the affiliate
and the network's promotional efforts online.
The entire model revolves around them, it is geared towards:
- finding them
- identifying their needs
- fulfilling those needs with quality products and services offered at acceptable prices and
- keeping them.
Networks:
It also known as affiliate network, they are the intermediaries between the affiliates and the merchant.
On the one hand, they help merchants design an affiliate marketing strategy and they select the best affiliates likely to promote the merchant's products or services.
On the other hand, they share revenues generated by the products and services with the affiliate. The merchant usually pays a flat fee for joining an Affiliate Marketing Network.
Compensation:
It refers to the method used to "share" revenues amongst the merchant, the affiliate network and the affiliate.
Compensation can be based on the number of clicks performed by customers, the number of leads or sales generated.
CPS (Cost Per Sales):
It is the most popular compensation method (between 75-85% of all Affiliate Marketing agreements). In this model, sales-generated revenues are shared between
the merchant and the network according to a set (or sliding) scale and then trickle down to the affiliate.
CPA (Cost Per Action or Pay Per Action):
The network and the affiliate are compensated based on the performance of a specific action by the customer.
This includes such actions as purchase, filling out of an online form, registration, providing review etc.
It represents between 15 and 19% of Affiliate marketing.
CPC (Cost Per Click):
It is another compensation method. It is based on the number of clicks performed by
visitors on the merchant and/or the affiliate's website.
Affiliate Management or also known as OPM (Outsourced Program Management):
It usually refers to companies that offer their expertise to merchants looking to
outsource their Affiliate Marketing function. OPMs act as the "ad" ,
communication or even sales "arm" on behalf of the merchant.
Their emergence has been fostered by the increasing complexity of Affiliate
Marketing business model and the desire for small businesses to stay focused
on their core activities.
MLFSolutions is an example of OPM helping more
and more small and mid-sized companies achieve success online.
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2. Affiliate Marketing vs Old School Marketing.
A few weeks ago when I set out to write this article contrasting Affiliate Marketing
(our precedent article was
Affiliate Marketing what's in it for you (WIIFY). )
with Old School or traditional Marketing, my agenda was to highlight the differences
between new and old Marketing processes and to stress on the meaningfulness of this shift for small businesses.
What I had not anticipated as I was researching the topic, besides noticeable changes in
the way marketing was carried out, there were similarities and even some continuity between old and new Marketing.
That is why this article is going to focus on describing how businesses approach the Marketing process
before and after the emergence of Affiliate Marketing and then make some recommendations
for "reorienting" small organizations seeking to take advantage of the "new" paradigm...
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1. Before the emergence of Affiliate Marketing...
Since its inception, the marketing process has been characterized by:
- Marketing research.
- Market segmentation.
- Planning and execution.
- Pre and post-sales promotion.
Originally, businesses would painstakingly go through the above process often
at high costs (for a long period) and sometimes without guaranteed results.
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2. Then comes Affiliate Marketing:
The emergence of E-commerce, with particularly its evolution towards Web 2.0, and
a proliferation of many players such as search engines, online publishers, social networks,
have affected the Marketing process in term of speed (faster) at which product/service travels.
While we acknowledge that the marketing process described in
How Affiliate Marketing can help small businesses grow.
has not fundamentally changed, overall, its principles remain the same; businesses just
go about implementing each step differently.
Today, successful small businesses are those able to acknowledge the key factors at play here
and willing to be agile regarding how they manage their organizations.
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3. How your business can be reoriented to take full advantage of Affiliate Marketing?
Ultimately, regardless of the industry, small business can be successful by developing and
implementing Affiliate Marketing based on the same principle of "Old School" or traditional Marketing.
What changes are the actors and the speed of execution, which we will discuss in some future articles.
With Affiliate Marketing, small businesses will be able to shorten the sales (or leads, clicks)
cycle and get faster and better results.
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3. Affiliate Marketing what's in it for you (WIIFY):
Are you considering Affiliate Marketing? - What's in it for your company?
In simple terms, Affiliate Marketing can be described as a model where a business offers some
incentive to an intermediary who helps attract potential or actual buyers to its website.(Check our
previous article on
How Affiliate Marketing can help small businesses grow).
Why should your small business resort to Affiliate Marketing?
What are the benefits of Affiliate Marketing techniques for small and mid-sized businesses?
How does Affiliate Marketing impact your bottom line?
Let's explore them:
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1. Why use affiliate marketing?
Most small and mid-sized businesses, whether resorting to -in house- programs or third-party intermediaries,
tend to choose Affiliate Marketing in order:
- To expand their business outreach: effectively reaching niches or multifaceted markets.
- To grow their brand notoriety and their products/service recognition: creating buzz around products/services.
- To outsource online sales function.
- To generate solid leads and sales.
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2. What are the main benefits of Affiliate Marketing for small businesses?
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Affiliate Marketing is usually based on performance (Performance Marketing with low initial investment
due to no charge for any upfront fees.
The result of the performance is based on the chosen model: pay per clicks performed, pay per sales closed,
pay per impression, pay per leads generated etc.
It is definitely help small companies with very limited resources cannot
afford to engage in expensive classic communication and promotional
activities with sometimes questionable and hard-to-assess outcomes.
Based on the chosen model and the low promotion amount, your ROI can vary from 10% to 60%.
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You will also avoid dealing with the pain of day-to-day sales force management.
Managing people, payroll or sales force deployment can be time consuming and resource-intensive...
Affiliate Marketing helps free up time and manpower enabling your company to remain focused (or to refocus)
on its core activities.
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It sets clear marketing objectives and easily monitors promotional campaigns.
Indeed, overseeing key marketing indicators is made much easier allowing for fast
or "Agile" operational or strategic adjustments whenever required.
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Finally, next time when you're asked "Affiliate Marketing (WIIFY)?" don't go what? but rather,
confidently answer: "Significant financial and true organizational benefits" .
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4. How Affiliate Marketing can help small businesses grow.
Whether you operate a traditional bricks-and-mortar or an online business,
attracting qualified prospects and customers to your stores both off and online requires
good old fashioned marketing techniques as well as innovative online marketing approaches such as
monetized websites, search engine optimization, Affiliate Marketing Networks etc.
Many small business owners and non online marketing specialists usually wonder where to start
or what model to set up for long term success and profit.
Affiliate Marketing is rapidly becoming the - way to go -.
Let's define and describe the Affiliate Marketing model and its advantages for small businesses:
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1. What's Affiliate Marketing?
It's a model where a business offers an incentive to an intermediary who helps draw potential
or actual buyers to its website. It is increasingly becoming the "way to go" especially for
more and more small businesses in the U.S. Such an intermediary is known as
an affiliate or affiliate marketer.
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2. What's the role of an affiliate?
Once hired, the affiliate main tasks are:
- To design an Affiliate Marketing strategy.
- To increase your company's visibility by - spreading the word - about your products and services online,
by designing branding statements for your products and services, by helping find a niche market for your company
whenever necessary, and by effectively using social media for advertisement and sales purposes.
- More importantly to recruit new customers, to get quality leads (if it is one of your objectives)
and to draw sales to your website.
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3. What are the main advantages for small businesses?
- The affiliate's effort leads to increased sales down the road.
The affiliate specialist basically save you time and effort.
- It helps you focus on what you do best: designing quality products and offering top-notch services
while your affiliate marketer is working at boosting your sales online...
- You save big time on sales force management and on advertisement expenditures.
Just like a commission-based salesperson, an affiliate marketer has a vested interest in
sharing information about your products and this is done with no upfront costs for you.
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Clearly, Affiliate Marketing is more effective than traditional marketing for
small online businesses to their goals faster and more efficiently than traditional marketing : acquire
and grow quality traffic to your site , get quality leads and/or sale for your services and/or products
The affiliate marketer (specialized in your domain of expertise),will relentlessly target profitable
and qualified prospects and customers.
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5. How to Sell While Sleeping.
Every small business owner would agree that running a successfully and growing small business is a demanding
and time consuming endeavor. Juggling between product/service development, accounting and finance, cost control,
distribution networks and promotion is rapidly turning most entrepreneurial dreams into nightmares.
This struggle can cause many small business owners to lose sleep.
In addition to the daily overload tasks, there is a crucial need to be more visible online and to stand out
in a crowded world of competitors and very demanding customers.
In three easy steps, this is how to get your sleep back:
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1. Hire an innovative and Agile Digital Marketing firm:
Such firms will help transform your company into a digital marketing sensitive organization
Redefine your online strategy, set clear marketing goals,
build meaningful web traffic, turn traffic into sales, keep current customers and recruit new ones.
They basically do the job for you and are paid only based on results.
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2. Turn your company into a Digital Marketing Sensitive Organization:
This step lays down the foundation for future success. Simply put, it means reorganizing
your company's operations in such a way that every action you take (promotion, communication etc.)
is geared toward maximizing online impact. This is usually achieved by developing an effective
website and social media pages (FaceBook,
LinkedIn,
Twitter , etc.)
and by building a strong online presence.
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3.Measure & Monitor Your results:
At this stage, your role as a business owner is to make sure the promise
made by the firm has been kept by measuring (e.g. Google and by matching results with forecast.
Ultimately, if you've hired the right Agile Marketing firm, all your goals
will be met and even be exceeded.
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By following the 3 steps above, you will be able to dedicate more time to other important
tasks within your business; to sleep better and longer hours all while making more and more money.
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6. Hire an Affiliate Marketing and attract your Profitable Customers.
One of the recurring questions asked by small business owners with
regards to taking advantage of affiliate marketing is: how to interact with
Affiliate Marketers and turn qualified visitors into customers?
Let's explore these two following points that are:
Educate yourself on Affiliate Marketing and Talk and trust a specialist to take action:
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1.Educate yourself on Affiliate Marketing:
Without necessarily seeking to become yourself a fully fledged Affiliate Marketing
expert; it is important for you as a small business owner to know
the basics and some key concepts. Most of our previous articles focus on helping
you achieve just that ( WIIFY?
Or 10 words you want to know)
who are the main actors? What are the different compensation methods?
How to evaluate and select the appropriate Outsourced Program Management
or Affiliate Management Agency for your business long term success?
How to set specific online sales objectives and general Affiliate Marketing goals?
How to use simple Social Media techniques to
effectively communicate on your product/services, how to better reach customers?
Do not wait! Be proactive, set time aside so you can regularly read news updates
or attend seminars. You will not regret it.
While you are getting an overview Affiliate Marketing talk to a specialist.
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2. Talk and Trust a specialist to take action:
The specialists are called Affiliate Management Agencies. They help you identify the
right Affiliate program for your company and they administer all aspects of the relationship
with this program on your behalf. They can also design customized digital marketing solutions
for you to implement in a Do-it-Yourself approach (DIY).
In your interaction with an Affiliate Management Agency, be prepared and have a rather clear idea
of what your business requirements are; specific questions such as "How do I go about increasing
my conversation rate from --% to --%?".
Note that the most effective Affiliate Management Agencies will make sure they perfectly
understand your business environment and most importantly your company's operations since
each company's identity and needs are unique. They will then come up with a series of
specific recommendations and a course of actions aimed at achieving the goals set forth.
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Finally, the best Affiliate Management Agencies are paid on a performance basis as they are very
confident in the outcome of their recommendations. They are transparent in sharing metrics and
methods with clients and they work collaboratively.
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