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Affiliate programs provide for a large percentage of the income bloggers and internet marketers earn online. In this post, I hope to cast away any negative light that might be surrounding Affiliate Programs and explain their place in your life as an entrepreneur.
A Basic Definition
This is my definition based on what I’ve compiled from multiple sources:
“An affiliate program is a system created and managed by the provider of a product or service who pays someone for referring a customer. Payment typically occurs in reward for the referred customer taking an action such as making a purchase or registering their interest.”
In practice online you will find that most affiliate programs will pay the referring affiliate per sale. However some programs still pay per lead which typically pull the customer into some sort of sales funnel.
So what does this definition mean?
It basically means that when you provide a customer to someone else, you will receive a bit of the profit they make on that sale. Sounds good right?
It gets even better. In a lot of cases, the affiliate (the person referring the customer) profits from the deal more than the provider of the product or service!
Now can you see why this money making method is so popular online?
Affiliate programs are quite conducive to how the internet works. Directing traffic around from website to website is among one of the basic principles of the internet.
It’s also the basis for how affiliates earn so much money. They are essentially sending a little of their own traffic to the person providing the product or service in the hopes that some of those people will make a purchase on the other end in order to get the monetary reward.
How Do They Work
The basic idea is that the affiliate (the person referring the customer) publishes a link for a customer to click on. That link embeds tracking data in the customer’s browser so that when they get to the provider’s website, the provider knows that the affiliate sent this customer. It’s then the provider’s job to ensure the sale is made.
Once a sale as taken place, the provider will pay the affiliate a predetermined percentage of the sale. How much depends on the provider, but typically it can be anything from 1% to as much as 80% of the sale in some cases.
The Power Of Multiple Affiliates
The real power of affiliate programs comes into play when the provider has multiple affiliates sending them qualified traffic that is converting into sales.
This explains why a provider might give away most of the profit margin to the affiliates sending them traffic, because the amount of traffic they receive by attracting more affiliates will provide more income overall.
Attracting multiple affiliates is really the key to being a provider. When you are running your own affiliate program, your two main jobs are:
- Attracting more affiliates.
- Making sure that people referred to you by your affiliates become paying customers.
The marketing is largely done by the affiliates, but this is something more and more providers are starting to help their affiliates with by providing certain marketing tools.
Tools Of The Trade
The best affiliate program providers like to supply their affiliates with tools to help them sell the product or service.
This often includes:
- A free report in exchange for an email address. A free report will warm the lead up by putting them into an emotional state where they are more likely to buy something. It should provide some tangible value but also include a “soft sell” at the end which is a place the lead can find out more and possibly purchase the offer. Quite often an email address is collected in exchange for access to the report which can then be used later as a sales tool.
- A video summary of the product or service. Video is a great attention holder and people often feel obliged to watch it if there is a picture of a person about to explain something.
- Example sales copy. Sales copy is incredibly important in the process of selling online. It often sounds corny, but the goal of it is to remove any doubts about purchasing the product or service.
- Example email. Similar to the sales copy example, this is a sample email you can send your pre-qualified list of customers to promote the offer to them. If they are interested and trust your recommendations they will click to find out more. This will usually direct them to a sales page or video overview where they can purchase the offer.
- Link tracking. Most affiliate programs will give you the opportunity to track which of your links are performing the best in order to adjust for optimal throughput.
- Image banners. Typically when selling a product, imagery can be provided to attract more clicks. People identify with images more than text and are more likely to click if the information is broken up with relevant images. This can often include the product or service being used, offical logos, or promotional banners.
This is just a small roundup of what tools a lot of affiliate programs are now providing their affiliates with.
Becoming Someone’s Affiliate
Registering to become an affiliate is typically free to do. Most big companies you’ve heard of have affiliate programs (be them online or offline affiliate programs), and you can find them by doing a simple Google search for “[Company Name] affiliate program” or “[Company Name] reseller program”.
Most affiliate programs require you to declare your identification, tax information (US residents), and your website/s. Some even require you to declare how you plan on promoting their offers in another step to pre-qualify you as a legitimate affiliate.
Receiving Payment
Most providers will have a minimum amount that you must earn in order to get paid. Don’t worry, this is pretty typical and it weeds out the affiliates that can’t provide enough leads.
Minimum payouts are usually declared during the signup process so keep an eye out for it so you know what you have to hit in order to get paid.
Payment cycles are typically monthly and getting paid is usually pretty easy with most programs allowing you to specify a PayPal address or your bank details for a direct deposit.
A large group of affiliate program providers still prefer to pay their affiliates via paper cheque. This is important to note, especially for international affiliates, because your pay day may not come straight away when you hit the prequalifying amount.
Promoting Affiliate Deals
As I mentioned above, affiliate programs are equipping their affiliates with stronger and more effective tools to allow them to promote their deals.
In recent news, declarations that you may be profiting from a referral of a customer may become mandatory. At present the law is a little fuzzy on whether bloggers need to declare this information straight up to their audience.
I find that it makes sense to declare it straight up as it builds trust and people should know that I might be profiting from their clicks.
Regular internet users are becoming more aware of scams and hidden affiliate links anyway, so why not be loud and proud? People should know that you are taking the initiative to earn money from your hard work, and if you’re consistently providing high value content, I don’t see the problem with it.
Tools you can use to promote your affiliate links can vary depending on your strategy. Here are some you should consider using:
- Email your pre-qualified list of prospects. This is still one of the most effective methods of promoting as an affiliate. It’s been proven to convert better than blogs and twitter. Be sure that your list of prospects are verified as you don’t want to be spamming anyone.
- Use your blog. Blogs can be a fantastic way of reaching your existing audience. One of the most recommended ways to build trust is to review the offer yourself and present your findings in an honest way. This is essentially an endorsement, so be careful about what you present.
- Tweet your offers. Twitter can be a fantastic way to get people excited about the offers you’re making. Presenting your offers to people who are already interested in what you do is a great way to generate warm leads. The recommended approach is to direct them to your blog instead of directly making the offer. There are numerous tactics for twitter around the internet and it is one of the most talked about social networks because of the possibilities it holds.
- Social networks. I’ve already mentioned twitter, but it’s worth presenting offers to your other social networks as well. Once again this works best if you can combine it with a blog post, or some other intermediary, trust building strategy like a sales page.
Conclusion
Hopefully you’ve learned a little about how affiliate programs work and how you can make them work for you as either the provider of an affiliate program or as an affiliate.
Referring sales prospects isn’t something that is new and has been conducted in more informal ways in traditional business models for years. Affiliate programs aim to provide a little structure to the process and allow both parties to benefit in a mutual way.
In future posts I will explain how to create your very own affiliate program to allow others to promote your products and services. Sign up for my RSS feed for more tips and tutorials like this one.
Promote with confidence, and support products and services that you believe in and you can earn great money with affiliate programs.
