What is Affiliate Marketing? You are starting a business or you may have one. But you don’t have the money to spend on marketing. What should you do?
Today I will explain to you what affiliate marketing is and how you can use it. The cool part about affiliate marketing is that its performance-based marketing.
If someone drives you a lead or a sale, you pay them out. You pay them on a cost per acquisition. The acquisition can be a lead or a sale for you. You determine whatever it is. And you can even determine what you want to pay people.
If your product sells for 500 bucks and your margin on it is 250 – in essence, you are operating at a 50% margin – and if you decide: “hey I’m willing to pay someone a $100 for every sale they drive me” then you can offer affiliates “Hey for every sale you drive me, I’m going to give you a $100”.
And they may decide that they’re going to drive these sales through SEO, Pay Per Click, Facebook advertising. Whatever it may be. And that’s up to them. That’s what affiliate marketing is all about.
Now there are a few things that you to know about what is affiliate marketing.
It’s Really Hard To Recruit
Where do you look for them right? You can’t just go around the web to go find marketers and say “hey, you want to join my affiliate program?”.
Instead, you want to join networks like Clickbank.com. So when you join these affiliate’s networks and you talk to them, they’ll tell you: “Hey here’s your product. Here’s what you should price it at for CPA. This is what you should pay people every time they drive you a sale.”
And they’ll make sure it’s competitive and you’re not losing money. Because the last thing you want to do is be willing to pay someone $10 per sale when it costs them $20.
Because if it costs someone $20 to drive you a sale, they’re not going to take $10. That means they’re going to be losing money.
Especially if you’re making thousands of dollars. They are going to be like: “no, you gotta offer more.” You have to be competitive.
And companies like Clickbank that offer affiliate networks will tell you what you should price your offer at.
There are other ones too, like another site that I use is JVZoo. JVZoo is also another place that you go to recruit affiliates. In addition to that, you can also go to conferences like Affiliate Summit.
Affiliate Summit or Affiliate World are really big affiliate conferences where all these marketers go and they are looking for new offers to promote.
So go there and you’ll find people who’ll be willing to promote your offers and these conferences even teach you how to price your product, what to sell it for, what to give affiliates to incentivize them etc.
Regularly Optimize Your Own Website
If people are driving traffic, but those visitors aren’t converting into customers, that means they are either driving irrelevant traffic, but most affiliate marketers are good at what they do. So usually the traffic sources typically qualify or it means that your web page isn’t converting and your web page not converting is usually the issue.
So you want to run surveys. You can use Quaraloo.com. That’s a tool that I love using and you can ask people questions on your landing page such as: “What else would you like to see on this page?”.
After you get 30 plus responses, you’ll get a really good understanding of what’s wrong and you can fix those things.
As you fix those things, you’ll notice that your conversions will go up. In essence, the more visitors coming to your website. Come more of them will convert into sales because you are fixing the conversion.
While before you may have had over a thousand visitors to your website and zero buy, and now it could be that after you fix the conversions, a thousand come and ten buy. That’s improving conversion rates and that’s what happens.
Another tool that you should use is Crazyegg.com and Crazyegg will show you where people scroll, what they click on. It’ll track the mouse movements of your visitors and that will give you insights on what you need to change so that you can maximize your conversion rate.
Do Those Two Things Mentioned Above
So if you do those two things, you can generate traffic through affiliate marketing. And affiliate marketing is one of the most powerful marketing techniques or tactics out there.
Especially for businesses that don’t have a tonne of capital. Because you only pay money for sales.
And when you’re paying out the money for these sales, pay on a Net 30 basis. Because sometimes you’ll get refunds or credit card fraud.
You don’t want to give out payouts for people who you’re refunding. So to ensure that you’re not getting ripped off by these affiliate marketers, make sure your payouts are Net 30.
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