7 Reasons Why Startups and SMBs Should Use Affiliate Marketing


The smaller your business, the more important each individual customer is to you. To keep your head above the water, you need a steady inflow of sales. But to actually scale and break out of the startup phase, you need recurring sales – those from loyal customers who not only increase your sales but also contribute to building your brand.
Affiliate marketing offers a low-risk opportunity for small businesses to achieve that goal. As an industry worth over $12 billion globally, affiliate marketing can save on your marketing spend and bring you more sales and traffic. It’s a model where your business establishes relationships with people who promote your products and rewards them for the sales they bring.
What makes affiliate marketing ideal for small businesses is that you only pay for sales after they occur. No investments are needed up front. You only pay for the affiliate platform and invest your time and effort in running it on a day-to-day basis.
But that is not the only reason why affiliate programs are worth considering. Here are 7 ways how your business can benefit from them:


  • Affiliates create UGC Ideally, your affiliates also use the product themselves, which makes their promotional content authentic user-generated content (UGC). This type of content is especially effective when marketing to millennials. As many as 84% of millennials report that UGC has at least some influence on their purchase decisions.
    Product reviews and comparisons are good examples of UGC that many affiliates create to promote your products. They allow affiliates to share their insights and best practices which not only drive sales but also build awareness of your products. To many customers, online reviews can be just as effective as personal recommendations.
  • Affiliates acquire customers Customer acquisition is the most time-consuming and labor-intensive part of running a business. In cold outreach, in particular, the statistics are not in your favor. You might have to resort to mass outreach which has a notoriously low ROI.
    The good news is that you can enlist your affiliates for this challenge. Your affiliates are your modern-day sales representatives. They have their own networks and audiences that they can leverage. They are like independent contractors with their own promotional channels and techniques. And you don’t pay anything to them until they bring you sales.
  • Affiliates build your brand Your affiliates contribute to building your brand. Think of them as your business partners who are an extension of your brand. Their success is connected to the success of your affiliate program. This is why you should encourage them to be active and help them with any issues they might have with your affiliate offers.
    It is also recommended that you establish some ground rules, for example by excluding controversial niches from your affiliate program. It’s not only about the quantity of your affiliates but quality also matters. In addition to brand awareness, consider also your brand image. This is why it comes down to targeting when you recruit new affiliates. Try to target segments that align well with your products and brand image.
  • Affiliates help you scale Affiliates bring you leads, traffic and actual sales. Together, these help you expand your reach and grow your business. Affiliates have their own networks and promotional channels that they use to promote your products. When all of them include a referral link to your affiliate page, it increases your traffic. As a result, your ranking in the search engine results also increases, which brings you more organic traffic.
    If your business has been stuck in a rut for a while, affiliate marketing can be your way out. As a network of business partners, an affiliate program will bring you closer to your growth targets. Having a high-quality product that is worth promoting is one thing. But reaching a wide customer base is quite another. It’s all about building relationships. And affiliates are able to take advantage of their own networks that supplement yours.
  • Affiliates provide social proof Closely related to the value of UGC created by your affiliates, social proof refers to a phenomenon where people copy the behavior of others. Also known as social influence, it affects our everyday choices, including our purchase decisions. Being influenced by recommendations from a friend or UGC such as reviews are examples of social proof.
    The effectiveness of social proof relies on the fact that those are real people who recommend or review a product. And since affiliates are people too, their behavior is imitable to others. This offers an important potential for growth and driving more sales.
  • Affiliates improve your ROI In terms of ROI, affiliate marketing is one of the most attractive areas of marketing. As already mentioned, no major investments are required up front. Besides a platform where you can run the affiliate program and the time and effort you spend on managing it, there are no other direct costs involved.
    How much return your affiliate program can bring depends on your affiliate recruitment strategy. The more promising affiliates you can get on board, the higher is your expected return. Your product also has a key role here. How easily it converts for affiliates and how much your affiliates can earn in commissions have a strong impact on your ROI.
    Other important factors that affect your return include your conversion path and the demand for your product. If all of these are in check and you manage your affiliate program well, you should expect a steady growth and more revenue each year.
  • Affiliates boost your campaigns When launching a new product or feature, you can give an extra boost to your promotional campaigns through your affiliates. Since affiliates use their own networks to spread the message, they can substantially widen the reach of your campaigns.
    Let’s say you have some big news to share at the start of the new year. You can share this information with your affiliates beforehand and they can help you spread the word. This will create more buzz around your big announcement. And hopefully it will also lead to more traffic and sales.
    If you can also provide special discount codes to your top affiliates, it can give an additional boost and increase the conversion rate of your campaigns.
    • Marketing your business requires a lot of time and capital that you may not necessarily have at your disposal. That’s why enlisting a number of effective affiliates is an optimal way to bring you more sales and improve your marketing ROI. These 7 benefits listed above are hopefully enough to convince you. Give affiliate marketing a try and get ready for more conversions.
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