In times like this, businesses of all sizes have to deal with the uncertainty of what lies ahead. Everyone who owns or runs an online business is trying to find ways to cut costs and keep their business afloat.
We’ve experienced stressful times in the 20 years we’ve been managing affiliate programs. The dot com doom of the late 1990’s early 2000’s and recession of late 2008 and 2009 certainly come to mind. Not only did we have to focus on our own business but work with many companies to help them through their own. It doesn’t have to be a time of panic or stress.
VALUE & EFFECTIVENESS OF AFFILIATE MARKETING
With affiliate marketing, you only pay a commission when affiliates refer a customer through their link. So why would you want to turn off a channel that is performance driven in a time when you’re looking to keep costs in check while striving to keep marketing active?
It takes an incredible amount of resources, time and money to establish relationships with affiliate partners from all verticals (coupon, loyalty, social media, blogs, influencers, search). If you shut down or suspend your affiliate program, you are cutting off all the relationships that were built since the time you launched your affiliate program. The short and long term marketing strategy will be affected. Not to mention you will burn bridges with people who want to work with your brand. They too have put in the time and effort.
For example, a blogger wants to do a review on your brand or simply a product you sell. The full review includes affiliates links, so they get paid when customers click through and order. For a few days, the review will be on the home page of the blog. You will receive higher amount of traffic and orders during this time. The post will eventually be archived, but that doesn’t mean you will never receive traffic and orders from this blog post. Sure traffic and orders will decline but this post is still active. Imagine you have several blogs doing this for you. Even if they never generated another sale, you have received FREE branding. If you suspend or cancel your program, you turn off all those links that could be potentially driving you traffic and revenue.
With the increased tracking technology of affiliate networks and integration with analytics, we as an agency are able to take advantage of advanced tracking capabilities to allow for better attribution levels of commission. We setup commission rules to account for new vs existing customer orders, coupon codes, specific SKU’s and more. This again, helps us help you, concentrate on your margins to make the most out of every affiliate partnerships.
OTHER MARKETING & ADVERTISING CHANNELS
There are several marketing and advertising channels, aside from affiliate marketing:
Email marketing, Search Engine Optimization (SEO), Search Engine Marketing (ie. Google Adwords), Social Media Marketing (ie. Facebook Ads) to name a few.
What do they all have in common?
-They all require an up-front budget
-you mostly pay for immediate traffic
-you have metrics such as conversion rate to determine revenue and cost
With these other channels, it is not about creating or building relationships, building a rapport, and working together to expand a brand through various verticals. I don’t want it to come across like the Affiliate Program is more important than other channels. The point I’m trying to make is if the affiliate program were to be closed, it would take weeks or even months to get it re-launched and establish these relationships again.
I’m also not saying I want you to cancel or remove your accounts in other advertising and marketing channels. What I am saying is that it’s much easier to reduce your spend or pause campaigns in other channels since it is more about the data than the actual relationship.