What is Affiliate Marketing and How Does it Work?

Affiliate marketing
Online Marketing
Written by: Connections Marketing

If you’re looking to expand your marketing team without bringing people in house, one way of doing so is to hire affiliates to drive traffic to your company’s website. Known as affiliate marketing, this practice involves using third parties to promote products or services online. With an estimated market value of $6.8 billion in the US, it’s safe to say the reach of affiliate marketers is large and growing.

Retailers in particular are benefiting from affiliate systems in which the brand or its advertiser uses a commission-based payment model both to promote themselves and to sell goods. If you’re not sure who or what to picture, that’s because the “marketer” can range from a Gen Zer with a side hustle on Tik Tok to Amazon Associates, a program with thousands of members, each with their own independent following.

So, How Does Affiliate Marketing Work?

Affiliate marketers typically introduce consumers to products and services online for a predetermined, sales-based commission – not that different than an in-store salesperson. With affiliate marketing, though, an online visitor must use a link or affiliate ID to make an online purchase. A business will often use multiple affiliates simultaneously. The affiliate might be a publisher who signs up to the retailer’s affiliate program to direct web traffic to the company’s website via a unique link.

In other words, there’s a fair amount of flexibility and variety on both ends of the equation. And for someone who is already in digital marketing, getting into affiliate marketing can be a natural leap. Many of the steps will be familiar, and other strategies can be folded into your affiliate marketing plan wherever applicable.

Case Study: How to Build an Affiliate Following

It can be hard to visualize a market driven by entities operating behind the scenes, away from the companies they represent. So, let’s put a face on one high-profile affiliate earner: Pat Flynn, the host of The Smart Passive Income Podcast. He positions himself as an expert in such areas as podcasting and brand building and reportedly once raked in $100,000 in a month. His earnings come from a variety of sources, including his own products.

In 2018, he published some of the lessons he learned from his recent activity promoting a series of online courses. It becomes clear from this example that he put in the work to earn both his following and his income. Some highlights below are strategies that worked for him but could be applied to many marketing campaigns:

  1. Attract consumers through online education. Whether in the form of a study, blog series, or entire course, informing your audience is often a good way to draw in readers who can then be channeled toward your offerings.
  2. Offer a unique incentive for following up. Flynn scheduled accountability calls throughout the year for new students, which attracted more people to sign up through his link.
  3. Use social media to create a community of like-minded followers. Using email addresses from the course launch, he created a Facebook group for students who went through his link. He was able to build up a popular following by using social media to promote a sense of give and take.
  4. Create a mutually beneficial experience. As an incentive, he livestreamed daily as he took one of the courses himself so that participants could share the experience with him. This kind of tactic creates the sense you’re not just a promoter and makes your advice appear more authentic and believable.

Choose Partners with Care

There’s always a risk in working with unfamiliar third parties. It will be easier to reach your target customers through reliable, proven partnerships that you fundamentally trust. One way to handle this is to have affiliates apply to onboard a retailer’s affiliate program so that the retailer can pick the best ambassadors for their brand and products.

Possible questions to address before partnering with an affiliate marketer:

  • What is their reach? Is it global, or is it aimed at people within a specific city or community?
  • How many total sales, as well as dollars in revenue, have they generated for similar companies?
  • If you’re a marketer, is there an existing web page, blog, or other channel that can be monetized?
  • What is your niche? Once you know this, it’s easier to build a community around it.

If you’re thinking of getting into affiliate marketing, keep Flynn’s example in mind. The unique bonus wasn’t a sales discount but a consumer experience. It promoted a community, as well as the product itself, and ultimately drove more sales.

At Connections Marketing, we’d love the opportunity to share our expertise in implementing marketing programs that drive sales. Our experts can discuss with you how to craft a marketing plan that is tailored to your specific needs. Contact us today to find out more!

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