What is Affiliate Marketing? A 7-Step Guide to Increase Profts for Brands

What is Affiliate Marketing? A 7-Step Guide to Increase Profts for Brands


How much does your brand spend on advertising? 

While marketing your products or services to your target audience is necessary in order to generate as many sales as possible, it can also be expensive—as well as time-consuming and labor-intensive. 

But what if we told you that you can get other people to market your business for free, and you only pay them every time they drive a sale? We refer to this type of promotion-based marketing as affiliate marketing.

After all, self-promotion can only get you so far. Affiliate marketing is a way to reach more people, make more sales, and gain credibility within your industry and with customers.

In this complete guide, we’ll show you step-by-step how to set up an affiliate program for your brand and start generating passive income for your business.

What Is Affiliate Marketing

Affiliate marketing happens when a person promotes a company’s product or service and gets paid a commission for any sales they drive to the company’s website. The person doing the marketing is the affiliate. They’re usually a blogger, social media user, podcaster, or someone else who has an authoritative presence in your industry. 

Online affiliate marketing is so common, that without even knowing it, we see it on a daily basis.

Think about the emails that you get and the newsletters that you’re subscribed to. Have you ever noticed the people sending them are sometimes promoting other people’s products?

And how about posts on Facebook and Instagram?

You may follow influencers who promote clothing, cars, vacation rentals, food, or any other branded items that they themselves don’t manufacture. You can spot these posts by an  #ad or #sponsored hashtag in their posts and a link leading to the brand’s website or product page.

Or maybe you’ve read a blog post about a topic you’re interested in, and, as you’re reading, you come across a link, leading you off the page to another website when you click on it.

These are examples of affiliate marketing hard at work. This performance-based marketing encourages bloggers, social media creators, and other internet users to create engaging content that encourages click-throughs. 

And the best part is, that benefits your brand as well as the affiliate. 

In addition to increasing your audience reach and profits, affiliate marketing can enable you to build relationships with people in the same industry, find out what offers are and aren’t working, generate leads, increase website traffic and search engine rank, and boost endorsement and credibility. 

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Affiliate Marketing Examples

So how does your brand know when a site visit or product sale has come from one of your affiliates? The answer is tracking links. 

Here’s how it works:

Let’s say Joe Biceps is a fitness influencer, and he was approached by Nike to promote its new sneakers. Nike wants him to send out an email to his email list of 10,000 people and post a picture of himself on his Instagram account wearing Nike products to promote them. Nike is offering Joe a 15% commission on each sale he drives. The shoes are $100, so Joe will make $15 on every sale he pushes.

In this case, Joe is now an affiliate of Nike.

Nike will give Joe a trackable link to use in his emails and social posts so they know how many sales came from Joe. The URL of the link contains a code, such as Joe’s username or a specific string of numbers, that identifies the link as coming from Joe’s email. 

This is a win-win situation for both parties. Joe makes $15 on each sale, and Nike gets more exposure and sales through Joe Biceps.

Take a look at these real-life success stories of brands that utilize affiliate marketing too:

Myprotein partnered with 150 social media fitness influencers to increase brand awareness and boost endorsement in the highly competitive protein market. The social media ambassadors used content, targeted hashtags, product giveaways, and coupon codes to promote the brand’s products. The results included a 35% average increase in sales and traffic as well as a 25% decrease in cost of sale for ambassadors vs. traditional affiliates.

A global travel brand website wanted to know what types of customers are driven to its business through an affiliate channel. Specific data points were tracked—such as hotel location, check-in date, and number of guests—and then analyzed to optimize the selection of ideal affiliate partners. By narrowing down its choices:

Benefits of Affiliate Marketing

Affiliate marketing is loaded with benefits for your brand. Take a look at some of them:

The benefits of affiliate marketing don’t stop there, though. It’s also good for affiliates, making the strategy a win-win situation. Affiliates are eager to provide quality content for you and spread your brand’s message because:

How to Start an Affiliate Marketing Program

The process of how to start online affiliate marketing is pretty straightforward. We’ve laid out seven steps to get you started.

Step 1: Set Your Goals

All good marketing campaigns begin with clear goals. Knowing what you want to accomplish will set the stage for choosing the affiliates who will be most effective in helping you reach your goals, as well as how many affiliates you’ll want to work with. Your goals will also determine which key performance indicators (KPIs) you’ll want to keep track of so you know if your campaign is succeeding or if you need to make some changes along the way.

Most likely, your main goal is to increase sales. If so, determine what your sales are now and what you want them to be by the end of your campaign. For instance, an example of a measurable sales goal is, “Increase sales by 5% within 60 days.”

Other goals may also be important to you. Objectives that are directly or indirectly related to helping you increase sales through affiliate marketing include:

Step 2: Pick Your Channels

The channel you choose to promote your brand should be where your audience is. And you can use multiple channels as well. 

Here are some examples of affiliate marketing channels to choose from:

Social media channels, such as Instagram, Twitter, Facebook, and LinkedIn provide a large audience and copious social media influencers eager to promote your brand. Social media creators place your affiliate links within their posts.

YouTube creators post videos to educate viewers about your brand or product, or they may mention your brand during the course of the video. They then place affiliate links in the video descriptions for viewers to access.  

Blogs are a pivotal force behind affiliate marketing. Bloggers create articles and place links to your products or services within them for readers to click through and find out more or make a purchase. Partnering with bloggers that create compelling content that is SEO-rich will drive more traffic to your site.

Email newsletters are often used by bloggers to deliver content on a regular basis to their leads. By adding affiliate links to their newsletter, your brand gains more exposure to a targeted audience.

Affiliate marketing websites, such as Commission Junction, Click Bank, and Amazon Associates are set up solely to promote products in exchange for a commission. The site provides a warehouse of brands offering products and services and connects consumers with the items they’re looking for via its search features. Adding your brand to the list can get more eyes on your products, and more click-throughs to your product pages.

Step 3: Create Your System

Here’s where you’ll decide on how your online affiliate marketing campaign will run and what the terms and conditions will be. Create a list of dos and don’ts for your affiliates to follow so they are sure to stay within the boundaries of your brand voice and style. 

At the same time, it’s important to let your affiliate promote your brand in a way that’s organic to them. Their audience will expect genuine content from them—not sales copy—which translates to higher trust in your brand.

Also, consider how long you’ll allow affiliate cookies to remain active. This determines the maximum amount of time you’ll credit your affiliate with a sale after a consumer clicks on the affiliate link.

Often times, affiliates prefer to promote lead magnets rather than sending people directly to a sales page. 

A lead magnet is an incentive that marketers offer to prospective customers in exchange for their email address. This is a great way to generate leads and build your email list. Here are a few examples of high converting lead magnets:

Some brands prefer to streamline their affiliate marketing efforts by using a platform designed specifically to manage affiliates. Examples of affiliate software include Infusionsoft, Tapfiliate, ShareASale, and Post Affiliate Pro

Using a platform can simplify recruiting affiliates, setting commission rates, making payouts, and analyzing your campaign data.

Step 4: Determine Your Commission Structure 

Your commission structure should be attractive to affiliates while friendly to your budget. You can choose to pay a set rate for each sale or pay a percentage for each sale, but the latter is preferred by most affiliates and makes sense to your budgeting as well. 

A few factors that can help you determine your commission rate include:

As part of calculating your commission rate, also decide if you’ll provide bonuses for affiliates. First-sale bonuses can motivate affiliates to participate in your program while performance tier bonuses can encourage affiliates to maintain high-level efforts and quality of content.

Step 5: Find Your Affiliates

The best ways to find affiliates are through networking, research, and affiliate marketing websites. Take a look at these examples of organically searching for affiliates to see which might work best for you:

To take the leg work out of your affiliate recruitment, consider signing up for a third party affiliate site. A few examples of affiliate marketing websites include:

Step 6: Provide Guidance and Support to Your Affiliates

To help your affiliates stay on-target with your campaign goals, on-message with your brand’s values, and performing at their best, it’s important to provide ongoing support. Keep the channels of communication open and guidance on-going by:

Step 7: Analyze Your Affiliate Marketing Program

Going back to the KPIs you identified when setting your goals, continuously track the progress of your affiliate marketing campaigns. This will not only allow you to see what’s going well, but also give you the opportunity to change affiliates, commission structures, channels, goals, content, and more to optimize your affiliate marketing program.

A Word About Amazon Affiliate Marketing 

If an affiliate marketing website that markets products across the globe, sells them at a rate of over 4,000 items per minute, and is responsible for nearly 40% of all online sales in the U.S. sounds like it could benefit your brand, look into Amazon Associates

Amazon is the largest e-commerce company in the world, and it markets products in nearly every niche, so yours is likely to find a home on the site. Amazon Associates is the company’s online affiliate marketing program. By putting your products on Amazon, you have access to this large network of influencers, bloggers, and entrepreneurs who use their efforts as affiliates to market your brand to your target audience.

Conclusion: Affiliate Marketing

Affiliate marketing is a low-cost, low-effort, and low-risk strategy to get your products and services in front of a larger targeted audience and drive sales. Partnering with affiliates within your niche helps you reach new customers on the channels your audience spends the most time on. 

It’s easy to do affiliate marketing on channels like Facebook, YouTube, Instagram, and Pinterest, for example. By partnering with social media influencers, you can leverage nearly 68% of affiliate marketers, all of whom use Facebook affiliate marketing, YouTube affiliate marketing, and other social media platforms for affiliate marketing.

Using an affiliate marketing website like Amazon Associates or Click Bank streamlines your affiliate marketing program, as does taking advantage of affiliate marketing programs like InfusionSoft and Post Affiliate Pro. But whether you choose to utilize these tools or run your affiliate marketing program organically, getting started on the steps to creating an affiliate marketing program puts you on the path to increasing your bottom line. 

For more tips on optimizing your marketing strategies and staying on top of today’s marketing trends and latest news, subscribe to the Brandetize Newsletter.

Editor’s Note: This post was updated for 2021 with additional affiliate marketing strategies for beginners and more details on how to start an affiliate program for your brand.

This content was originally published here.

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