Who needs your product today?
If you’re reading this, it means you’ve crafted the early version of your product, hired a few people, maybe raised a bit of money, and need to drive more sales for your business. However, before you buy into the myth that all your sales problems will disappear after you spend a few thousand dollars with an affiliate marketing product, you need to validate who your market is first.
One of the major reasons why businesses have such a high rate of failure is that in defining the problem, very little attention is paid to the expected customers and their point of view. As a result, most businesses have to deal with a jarring dissonance between the problem definition of how my product will solve a problem for a customer on a day-to-day basis.
According to Statista, businesses’ spending in the United States for affiliate marketing is expected to hit $8.2 billion by 2022. Globally, Awin Reports estimated that advertisers spent $13 billion on affiliate marketing in 2017. These figures mean that affiliate marketing is an exceptional distribution mechanism for your business. That said, it needs to have a niche of willing buyers, who will regularly buy, subscribe or contribute their resources and expect to do so for the foreseeable future or you will struggle to stay in business.
You may have a great product or service, which no one is interested in or showing any emotion towards. In most cases, this means that your product is not fit for that market and while you may be set on affiliate marketing as the solution to your problem, it is unlikely that it will work. As a result, it is important to figure out how your product solves a problem for a substantial number of people (depending on its price) or you will fail to scale.
Do you know your numbers?
While this seems like a moot point, it is important to know your numbers before you commit your resources to an affiliate marketing campaign. Although metrics such as your revenues, profits, fixed costs, and other balance sheet items are important for mapping your current position, you will need to go deeper as you consider affiliate marketing as a viable route for your business.
Before you begin, you should enumerate all your current sales and marketing channels and label them by cost, sales volume, and revenues earned over time. Making a note of this early creates a benchmark for acceptable performance that will guide resource allocation and your profit expectations as you explore affiliate marketing for your business.
Other key data points that will make or break your strategy include the affluence level of your target audience, how much they spend on similar products, how quickly they buy products in your category, switching costs, and why they will spend either more money or less on an alternative (i.e emotional and social costs).
Once you’ve collected all these data points, you’ll be able to set adequate parameters for your cookie duration, and affiliate commissions (CPA). When it comes to affiliate marketing, getting the cookie duration and commission price right will determine your success. If your cookie period takes too long, it will lose you money with affiliates and if it’s too short, high-quality affiliates will not work with you.
To this end, you must understand how your business metrics interact with one another or find someone who can help before you commit resources to your affiliate marketing program. Without doing this work before launch, you have a lower chance of success with affiliates, and your potential customers over the long run.
Run a few ads first
If your user acquisition is currently offline and interpersonal, you need to run a few online advertisements before you launch your affiliate marketing campaign. If it is not, chances are, you’re already running paid media – either way, you should not invest your money into any affiliate marketing campaign without understanding how your potential customers interact with the advertisements for your product or service.
Digital advertisements on Google, Facebook, Instagram, and other networks will give you the platform to test key assumptions about your target audience in real-time. By running test ads, you’ll learn what your audience will like, comment on, or (and) share. Intelligent A/B testing will help you discern how your customers make snap judgments about what they like, are indifferent to, or passionate about.
Once you’ve crafted your messages and run the ads, a comment means that your customers care enough to contribute, likes show weak agreement and a share (which is most important to you) shows that they are willing to tell other people about it. Once you have this data, you can analyze which audience segments require retargeting, those who will buy or not, and those that need evidence of purchase (social proof) to make the jump.
Running your own paid ads will give you data for your multimedia creation efforts. By aggregating all the copy styles, images, infographics, and videos that elicit the most reactions in terms of likes, comments, and shares, you can model the vast majority of your digital assets based on these and distribute them to affiliate marketers for your campaign once you’re ready.
67.32% of affiliate marketers rely on social media to connect with potential customers in 2021. This means that without adequately evaluating your products based on that context, you’ll be running blind when you launch your affiliate marketing program. You’ll also pay a lot more whenever a customer clicks on your advertisement and generate a lot less return on your ad spend than you would if you just ran a few ads beforehand.
Have you done any outreach?
Outreach (in this context) is a broad term for all activities related to identifying and communicating with the right partners and convincing them about your value and the potential future benefits in terms of brand, profits, or both.
To effectively benefit from affiliate marketing, having an outreach strategy is important. This is because, without one, you’ll most likely struggle to find high-quality affiliates and select the wrong ones when you do. Practical steps include reaching out to other business owners in your niche or adjacent ones, social media influencers, YouTubers, etc.
The objective of outreach is to cultivate relationships that can be funneled into your affiliate marketing program beforehand. Once you’ve established a line of communication and potential terms of a partnership, it’ll be much easier to get them to the table once you’ve launched your campaign.
Do you have multimedia assets ready?
As you launch your affiliate marketing campaign, you’ll need to have a creative suite of multimedia tools including images, videos, infographics, and other creative assets that will help affiliate marketers represent your brand accurately and craft their reviews properly. While many affiliates prepare their reviews/content pieces themselves, providing multimedia will create a uniform brand effect when your potential customers interact with the affiliates. Also, with your assets, you can accentuate the most important part of your product argument.
In addition, once you’ve determined what various customer segments react to, you can distribute relevant assets based on the characteristics of the affiliate and custom-tailored to drive business results from their platform. Before you launch, make sure to have dedicated content pages, videos, banners, and creatives promoting your product or service. Not only does this help affiliates get inspiration in marketing or promoting your products to their target audience, but you also control the messaging that they distribute.
Affiliate marketing offers a great method to distribute your product and brand at significantly less cost compared to others and with a fixed cost formula that is predictable. With billions of dollars in revenue generation every year, you’re missing out on a lot of value if you do not plan towards an affiliate campaign at some point in the near future.
That said, running a successful affiliate marketing strategy requires that you take certain factors into consideration before you launch to increase the probability of success. Some of the key activities include market definition, user acquisition, and partner outreach. Completing this checklist will ensure that you have all the tools that you will need as you set your affiliate marketing strategy into motion.
With such a high failure rate, affiliate marketing presents a particularly significant opportunity for business persons who are methodical and detail-oriented. If you complete this list, you’ll be in a much better position to deploy a successful strategy and execute profitably for a longer period.