Affiliate Marketing: What it is, how it works, and what not to do

You’ve probably heard that there are other ways to make money online that aren’t directly related to selling products or services. Affiliate marketing is precisely one of these ways. Affiliate marketing allows you to make money by advertising and promoting other companies and their products.

In this article, we’ll go over precisely what affiliate marketing is and why you should start getting involved and start making money right now.

What is affiliate marketing?

Affiliate marketing is a business model which aims to drive sales and share income between two parties: the merchant (also known as the product creator, the brand) and the affiliate themselves.

The merchant’s job is to:

  • Provide the product or service
  • Develop an affiliate program, which is based on revenue share

The affiliate’s job is to:

  • promote the product, usually through an affiliate network or through other marketing channels, in order to receive a commission.

Affiliate marketing is one of the most active markets in the world, especially because of its win-win characteristic for both sides involved. According to a Media Kix survey, there is a 10.1% annual growth in affiliate marketing investments.

Today, 84% of brands and publishers leverage affiliate marketing to promote products and drive sales. Amongst the most influential names in the industry, we can point at Amazon’s affiliate program. Back in 2017 Amazon specifically changed their affiliate program’s commission rates to attract more affiliates.

In order for affiliate marketing strategies to be successful, it involves different agents and channels to process and distribute content, links, and ads. This is usually done through social networks, blogs, videos, among others. Affiliate marketing must be taken seriously, as it requires constant work, knowledge, and dedication from affiliates and merchants to ensure the best results. Put simply, it’s not a magical way to make money online. Your success is performance-based.

Further Reading:  What is Affiliate Marketing? 6 Affiliate Marketing Trends you should know.

Affiliate Models

Now that you’re familiar with the concept of affiliate marketing, it’s time to learn how affiliates and merchants make money. The truth is that affiliate programs exist in many forms, but the following models are the most common:

Cost Per Action (CPA)

In the CPA model, the affiliate receives his commission whenever a new lead takes a specific action – which was previously defined by the merchant. This “action” can be virtually anything, such as subscribing to the company’s newsletter, signing up on the merchant’s website, buying a product, etc.

Cost Per Click (CPC)

CPC is one of the most common models when working with paid ads. It is one of Google Ads’ primary monetization forms. This technique is applied in affiliate marketing and works essentially in the same fashion.

Here, the affiliate gets paid whenever a unique lead clicks on their affiliate link, which usually leads to a landing page or directly to the merchant’s homepage.

Cost Per Install (CPI)

CPI is commonly used when working with B2B or SaaS companies. It’s also seen in publishers looking to increase the number of installations of their free or paid apps such as mobile apps, for example.

In this model, the affiliate is paid whenever a lead installs an application, service, system, etc. For example, live chat software JivoChat‘s affiliate program offers recurring commissions for as long as customers remain subscribed to its services.

Regardless of the model used, the primary goal behind affiliate marketing is to drive sales, boost traffic, and generate new leads. Let’s take a look at some of the key benefits of offering an affiliate program or being an affiliate yourself.

Affiliate Marketing Benefits: for Affiliates

Generate Recurring and Passive Income

One of the major benefits of working as an affiliate is the ability to generate passive income through your sales. For example, if you add your affiliate link to a product or service within an article on your blog, you’ll have chances of finding new customers for as long as the link is active and the article is generating traffic.

Also, as aforementioned in the CPI affiliate program model, you’ll keep getting paid for as long as the customer remains active. This means that even after your initial work of referring the customer to the company, you’ll continue to receive your commission passively.

Flexible Working Hours

When working as an affiliate, you’re your own boss. This means you have the freedom to choose which products, services, and brands you want to promote according to your network.

Also, you choose when and how you’ll direct your effort to this work and, whenever you do it right, you’ll get paid for it.

Your Income Reflects Your Effort

Another advantage of working as an affiliate is that you’re responsible for how much money you make. The more effort and work you put into bringing visitors and customers to your partner companies, the greater your profit.

Also, there are no customer maintenance costs, as this is the merchant’s responsibility. Your job is to close deals and bring new leads and customers to the brand, at which point they’ll take over and follow their own internal processes.

It doesn’t cost a lot to start

Working as an affiliate doesn’t require you to rent your own office, hire employees, or even find suppliers and develop your product. Instead, it’s a job that depends on your performance and comes at a really low cost to get you started.

Many affiliates start making money by leveraging their blogs or social media with thousands of followers and other existing channels to advertise relevant products that match their audience. This is exactly what influencer marketing is.

Check out JivoChat’s affiliate program and learn where you can start making money.

Affiliate marketing benefits for the merchant

Results-based Business Model

As you may have noticed from the affiliation models introduced earlier, your business only pays the affiliate when it attains a goal. This goal, as well as the amount to be paid, are determined entirely according to your business strategy.

While it’s true that you must develop your affiliate program and provide marketing material for affiliates, you’ll still only pay for measurable results, hence why affiliate marketing is seen as a win-win business model.

Boosts Your Brand Recognition

Affiliates need to promote your brand, products, and services through content marketing strategies planned and executed through their means. Therefore, one of the biggest benefits of this strategy is increasing your market presence and getting more people to recognize your brand. In other words, the market expansion will certainly happen thanks to this strategy.

Also, depending on the outreach strategy employed by the affiliate (such as creating relevant, targeted content), your business will start receiving leads.

Positively Impacts Your SEO

Having relevant blogs and websites linking back to your product pages, articles, and other digital content has a big impact on your SEO. In fact, this is one of the main reasons companies start content partnerships or employ co-marketing strategies through guest posts and similar actions.

Affiliate programs are an excellent opportunity to develop partnerships with other companies that work in the same niche as yours. Leverage this communication bridge to work on other projects together.

Affiliate Marketing Mistakes You can’t Make

Now that you’re aware of the benefits of being on either side of an affiliate program, it’s important not to make the most common mistakes in affiliate marketing.

You need to optimize your content for conversion

When posting your affiliate links on social media, it’s critical to ensure it’s optimized to attract leads. This means that you must compose your posts strategically.

Your posts should include relevant images that add value to what you’re promoting, as well as well thought calls-to-action (CTA). Several studies claim that posts with images have greater reach and generate better results.

Don’t just try to sell

One of the biggest mistakes in sales is to merely list all of the features a product has to offer, instead of explaining how customers can benefit from them. Thus, always provide tips and examples of how a product or service can solve your customer’s problems and change their life.

Be creative. don’t just repeat what other users do. Social media is one of the best places to share content and include your affiliate links. Whichever kind of material you decide to create to advertise, make sure it connects with your audience.

Failing to track and analyze results

This is one of the biggest affiliate marketing mistakes. Tools like Google Analytics can help you track your traffic and metrics. Bear in mind that when it comes to sharing your affiliate link, quality speaks louder than quantity. You’ll get better results by acting strategically and checking which services or products are bringing you the best results.

Not fully understanding what you’re promoting

A huge mistake is to think that merely sharing affiliate links to many products and solutions on social media is enough to eventually generate a good number of customers and make money quickly.

Affiliate marketing requires a lot of dedicated work. You must understand what you are promoting to be able to answer questions and convince your leads that it’s worth it.

Don’t ignore your customer’s questions

Even if you’re creative and concise when creating content and sharing your affiliate links, that doesn’t mean your leads will automatically follow through and generate results for you, especially if they have questions about it.

Chances are they’ll have questions about it and, if you’re not ready to answer them as fast as possible, you’ll be losing out on opportunities.

Are you a business hoping to build a new affiliate program? Perhaps you’re looking to participate as an affiliate yourself? Regardless, check out JivoChat’s Recurring Commission Affiliate Program and see for yourself how you can benefit.

Author Bio:

Emma Longridge is the US Content Manager at business communication messenger, JivoChat. She enjoys discussing technology and how it can help improve the lives of others


10 Response to "Affiliate Marketing: What it is, how it works, and what not to do"

  1. Comment From nafisa

    nice article

Leave a Reply

Your email address will not be published.