10 Benefits of Affiliate Marketing for Small Businesses

65% of businesses believe generating traffic and leads is their biggest marketing challenge.

That means two-thirds of business owners find acquiring new customers to be more difficult than say, closing the sale or getting people to open their emails (which are not small feats either).

And sure, you could just throw money at Google and Facebook and pray that your ads convert, or take to the streets with a megaphone and a million hand-printed adverts and hope you’re not arrested.

Or, you could try a better method.

A method that means not paying a cent for traffic until AFTER it converts into an actual physical sale. That means spending your time focusing on your business, not your ads.

It’s called affiliate marketing. So if your business is looking to set up an affiliate program or you’re a beginner entrepreneur looking to make some passive income, our guide will help make your affiliate venture successful.

What is affiliate marketing?

Affiliate marketing is the process of paying others a commission to market your products on your behalf. In the online marketing world, businesses set up a program and invite members to join their affiliate network. Each person who signs up gets a personalized tracking URL. They use this link when promoting your products on their website, social media posts, and other outlets. When people make a purchase using the link, an affiliate marketing system tracks the sales and your affiliate partner receives a percentage of the sale total.

Will my small business benefit from an affiliate marketing program?

If you’ve ever wondered about setting up an affiliate program, we’ve got good news! Some of the world’s biggest brands and startups are investing heavily in their affiliate programs because affiliate marketing has proven to be successful. The benefits of growing a successful affiliate marketing network are tremendous. 

Here are 10 reasons you should consider setting up an affiliate marketing program for your small business:

1) You only pay for performance

Most small business owners try their hand at a variety of advertising and digital marketing strategies to promote their products and services. Tactics like search engine optimization (SEO), social media, and pay-per-click advertising (PPC) can all be fruitful in the beginning. But many businesses need more cost-effective ways to scale their brand awareness to new audiences without constantly paying for eyeballs and clicks.

With affiliate marketing, you only pay once a sale is made. This means, that if an affiliate has a kick-butt campaign you’ll end up paying more, but you’ll also earn much more than you pay out, which is the goal.

2) You’ll know your costs upfront

When you pay for advertising before the sale, you might get lucky with a cost-per-acquisition to you of $5. Or, it could be $329. It varies from sale to sale so you never actually know what you’re getting or what it will cost you until the totals are added up. With affiliate partners, you set a commission rate before the sale is ever made, so you know exactly how much each sale will cost you. Tracking these kinds of metrics is crucial to your business’s long-term success.

3) You’ll get targeted traffic

Many marketers take a shotgun approach to traffic — they aim in a general direction, shoot their message, and hope they hit someone that will buy. And that’s the exact reason why so many marketing campaigns cost more money than they make. Affiliate marketers are experts at collecting warm leads and creating email marketing campaigns tailored to your target audience. This gives you access to thousands of potential customers you would otherwise spend lots of time and money trying to reach. Finding quality affiliates in your field allows you to expose your company to highly-targeted “free” traffic that is more likely to purchase your product.

4) You get to pick who you work with

Speaking of quality affiliates, one of the perks of going the affiliate route is you can hand-pick everyone you work with. Using Kartra, you can create affiliate questionnaires that screen applicants and ensure everyone promoting your products/services is familiar with it and will represent your brand well. This way you build solid partnerships that promote your company the right way.

5) It will boost your website’s SEO

Effective SEO is one of those things we all know we need, but most of us don’t really understand how to use it to increase our brand’s online exposure. Fortunately, affiliate marketing is one simple method of increasing you site’s search engine rankings. This happens because each time an affiliate shares a link to your product your site acquires a new “backlink.” Backlinks from affiliate links in blogs, social shares, and affiliate websites help to raise your SEO authority and rank your site for the key products you offer. Ever wonder how Amazon grew so quickly? Their affiliate program sent links to their products all over the internet which search engines noticed and rewarded.

6) It diversifies your marketing streams

Remember the times Facebook went down? Not only was it annoying to not be able to check what all your “friends” were doing in real-time, but for businesses, it meant your ads were temporarily unavailable.

You might master one marketing platform, but if you’re too reliant on it, it can significantly impact your revenue streams if that platform goes down or changes dramatically.

Affiliate marketers use a variety of marketing efforts to ensure they earn a commission. They email their lists, some are bloggers who utilize SEO and high-quality content to drive traffic, while others prefer PPC (pay per click) like Google and Facebook ads, and more avenues — which ensures you’re covering your marketing bases.

7) Consumers trust affiliates more

Consumers tend not to trust a business when they say their product is awesome. But they trust influencers. In fact, 2 out of 3 consumers reported they trust an influencer’s opinion of a brand more than the brand itself. Meaning, if your affiliates are well-connected, well-liked and relatable — 61% of people find info from a person “just like them” to be credible or very credible, you have an opportunity for more direct sales. Referrals from your affiliate relationships go a long way toward your success.

8) It saves you time

Running a small business is no small feat. It requires hours burning the candle at both ends, and late nights that leave you chugging copious amounts of coffee in the morning. But, affiliate marketing can take a big chunk of lead generation off your plate. Of course, managing affiliates does require some oversight, but once you’ve screened your affiliates it can be as simple as waiting for the sales reports to come in.

9) It saves you money on staffing costs

Have you ever hired a costly staff member (and created additional monthly overhead) in the hopes of growing your business? But maybe they were slow to ramp up… or ineffective and it ended up costing you money instead of earning you money?

Affiliates can fix that problem. Rather than having a salaried marketing team, your affiliates can do the same work with affiliate commissions only being paid out after they’ve been effective and sales start coming in as a direct result of their efforts.

10) It’s a proven marketing strategy

Ever wonder why some of the biggest retailers (think Amazon, eBay) invested heavily in their affiliate marketing programs, even as startups? They knew the value their new affiliate partners would bring.

Word of caution…

Now, we know we just presented you with a buffet of reasons why you need affiliate marketing. But, it’s not always as simple as going out and simply “getting” affiliates.

You need to find people who are qualified in your field. For example, if you run a branding consultation business, you don’t want affiliates who are used to selling hair vitamins. You want business experts that people trust. These make for the best affiliate partners.

Once you do find these people, you want to make sure to screen them and get their tax information. Then you’ll need to provide them with affiliate links so they can sell your products / services and you’ll be able to track which sales are connected to which affiliate partner. You may even want to set up a commission structure, like five sales before you payout commissions, to ensure your affiliates aren’t in it just for a discount on your products / services. Most online businesses think they need dozens of expensive apps and integrations to create a new affiliate program. However, that’s not the case!

Fortunately Kartra manages all of it for you. Kartra even has a built-in affiliate marketplace filled with other Kartra users. Here you can find other related products to promote for some extra cash, while other users are applying to promote your business offerings. And once they apply, you can require a mandatory screening process or automated approval followed by custom conditions, automated payments, and more…