Some of today’s best affiliate marketers are bloggers and other social-media personalities who have a large following. In the typical affiliate-marketing arrangement, an entrepreneur enters into an agreement with an influential Internet personality or someone else willing to represent a product. The affiliate marketer promotes this product through links, banners, testimonials or other content.
Affiliate marketing is an agreement where one firm (the marketer) compensates another firm (the affiliate) for generating transactions from its users. Affiliate-marketing programs can provide a substantial upside to an entrepreneur through their ability to involve a cadre of innovators, someone who has an above-average impact on a specific field and can sway their social-media following.
There’s nothing wrong with affiliates scoring a commission in exchange for a promotion involving the placement of links, banner ads and similar forms of advertisement. From time to time, an affiliate marketing might highlight a product through a review or testimonial. The entrepreneur must ensure that the agreement with the affiliate provides appropriate disclosure to he audience.
Entrepreneurs should consider the following when establishing an affiliate program:
1. Watch out for online store glitches.
Affiliate marketing programs work well when an entrepreneur has set up an online store, although be mindful that the quickest way for an entrepreneur to lose valuable affiliates is from technical glitches that cause lost sales and result in lost revenues for affiliates.
The beauty of a well-developed affiliate program is its integration with an online store. While entrepreneurs can develop homegrown affiliate systems, they might find it worthwhile to explore options available through third-party affiliate programs
2. Set an appropriate price.
Affiliate-marketing programs pay a percentage of each sale generated from the affiliate’s activities. Driving traffic to an online store can involve tie-ins as simple as placing a hyperlink or banner on a website to posting comprehensive and well-thought out online articles covering a product’s features and benefits.
Influential affiliates with large online followings on blogs, Twitter, Facebook and Instagram can have many products potentially available for them to represent. As such, the commission per conversion (from site visitor to paying client) is important.
3. Partner with the right marketers.
Successful affiliates work hard to create influence. Affiliates typically won’t become involved with products if they don’t inspire a conversation.
Affiliates have their niches. Entrepreneurs should target and make arrangements only with affiliates who operate within their industry. For example, an entrepreneur selling high-end culinary utensils and hardware should seek affiliates who are foodies, restaurant owners, industry consultants and others involved in related fields. These affiliates may maintain blogs, websites, social media pages and accounts where they share information and links about the product.
Entrepreneurs must be prepared to establish significant revenue-sharing agreements if they wish to engage with top affiliate marketers.
Years ago some observers advised entrepreneurs to seek out influential bloggers with strong followings and offer a product or some other non-cash benefit in exchange for a mention or link. This worked for a while. But not any longer.
4. Provide transparency and honesty.
Lack of proper disclosure can damage the reputation of an affiliate and an entrepreneur. Entrepreneurs should monitor affiliates in cases where they make statements about the product in reviews and articles.