Affiliate Marketing for Small Businesses: The Complete Guide for 2023
What are the benefits of affiliate marketing to small businesses? Find all your answers in our comprehensive guide.
In today’s hectic business environment, affiliate marketing offers excellent opportunities for rookie entrepreneurs to increase the visibility of their startups or small business. A strategically-planned approach will help you reach a wider audience and raise brand awareness without huge investments.
Affiliate marketing can help your brand grow significantly with relatively low upfront costs. Regardless of the field, it is essential because it increases website traffic and enables you to build trust in your brand.
Your main aim should be to choose the right affiliates—famous bloggers, influencers, ambassadors, and other content creators—and advertise your brand through customized links on their platforms.
Customers prioritize peer recommendations over generic brand advertising, making affiliate marketing profitable for small businesses. However, it doesn’t necessarily work well for small businesses in every field.
This guide will show you how to develop your strategy and make the most out of affiliate marketing for small businesses.
What are Affiliate Marketing Programs?
Affiliate programs (or associate programs) involve the online merchant and affiliate websites that send traffic to the merchant company for a set commission rate.
The affiliate brand’s task is to post links to the merchant brand’s website and attract new customers. The main three parties in every affiliate program transaction are the merchant site, the affiliate site, and the customer.
The terms and conditions of affiliate marketing agreements usually depend on:
- the number of individuals that the affiliate sends to the merchant’s website;
- the number of consumers engaging with the site—such as purchasing a product or service.
Some of these agreements may base payment depending on the number of people discovering the merchant’s website via a banner advertisement. The affiliate’s link aims to bring the merchant a rise in traffic and profit. The merchant company then pays the affiliate website a commission rate according to the contract.
You can build an affordable and successful marketing strategy by recruiting affiliates while selling your products online. This process helps you acquaint more individuals with your business and improve the company’s reputation.
In the past few years, the popularity of affiliate programs has skyrocketed, with many diverse forms of affiliate tracking software taking place. The role of an affiliate can be highly fruitful for websites that aren't directly involved in eCommerce by selling products or services on the Internet.
In this affiliate marketing guide, we will educate you on how to manage affiliates in a way that brings significant growth to your company.
Is Affiliate Marketing Right for Your Business?
Are you still hesitant about jumping into affiliate marketing to aid your business? You may consider several points to determine its potential benefits in that case.
Joining a program allows businesses of all sizes to achieve particular goals, such as attracting leads and enhancing brand reputation.
Affiliate marketing is especially beneficial for small businesses because of the unique opportunity to embrace it with strict budget limitations. In addition, it saves you the trouble of employing a separate sales and marketing team in your company.
Once you build valuable affiliate partnerships and master your strategy, you are on the path to significant growth with little effort.
Affiliate marketing for small businesses is necessary for increasing your consumer base for SaaS companies that aim to find new clients. You can build a personal affiliate program policy that rewards your affiliates whenever they earn you new customers. These customers may purchase your products or services, sign up for your newsletter, or opt for a free trial.
What Makes an Affiliate Marketing Strategy Successful?
A brand must gravitate towards problem-solving and innovation to shape a successful affiliate marketing strategy.
From this, we can conclude that well-put-together affiliate links are a must. Affiliate links are different from standard pay-per-click ads. They contain long-form, neat, user-generated content that will make users familiar with the specific benefits of your product or service.
That will help your potential audience reach your website while explicitly searching for solutions to their particular issues linked to your services.
One of the main factors determining your business's compatibility with the affiliate marketing industry is how your competitors tackle this field. If you find out about competitors operating an effective program, you should consider exploring it.
Affiliate marketing for eCommerce businesses usually comes with reasonably low expenses. However, there are still several expenses to consider. Naturally, a crucial question to ponder is your budget and whether covering an affiliate marketing program is viable.
A solid affiliate marketing strategy will include the following:
- paying affiliate commission rates to influencers;
- doing giveaways of free product and service samples;
- offering special privileges to affiliates who manage to bring your convertible business referrals.
Small businesses may struggle to cover all these costs, so preparing before financially embarking on this journey is essential.
Determining how your budget can allow your business to engage in affiliate marketing is vital. However, the organizational skills in your company are as pivotal. Your employees should be familiar with this field to find the right affiliates and deal with all the challenges for small businesses.
How To Grow Your Small Business with Affiliate Marketing?
Affiliate partnerships are an effective way for small business owners to increase the visibility of their brand and reach a wider audience for their company’s website. It brings relatively low expenses while building a well-established online reputation for your business.
You can grow your small business through affiliate marketing in two ways:
- by developing collaborations with relevant business partners;
- by starting your affiliate program.
Establish Key Partnerships
To best influence your affiliate marketing strategy, you should partner with other trustworthy companies in your sector. Valuable partnerships enable you to promote your products or services to many potential customers without significant incentives.
You should prioritize companies with a similar target audience when establishing affiliate partnerships. If you collaborate with businesses in a different field, promoting your products and services is less likely to reach the desired traction.
When recruiting your affiliates, you should always consider trusted comparison sites and reviews. Customers heavily rely on trusted reviews. Therefore, according to this factor, mingling with the right affiliates will enhance your brand’s reputation.
Starting a partnership with another company as a part of your affiliate marketing strategy requires perfectly smooth management. If your systems don’t function properly, you should fix any issues that may arise before aiming for a collab.
Start Your Affiliate Program
Starting a personal affiliate marketing program is a process that requires more of your effort and initiative. As a small business owner, you should reach out to influencers and hire them as affiliates who will promote your products and services for a commission.
For instance, you can contact trustworthy social media influencers and get them to promote your products on their social media (such as Instagram). You must pay a specific commission rate for every product purchase from their affiliate links (usually around 25%).
Below are some all-important tips you need to consider before starting your affiliate program and steps to create an affiliate marketing agreement.
Perfect Your Branding Before Starting The Program
A powerful brand identity is a must before launching an affiliate program. Without proper visibility and a well-established business reputation, affiliates may find promoting your products and services hard.
In addition, successfully handling your affiliates includes ensuring every partner provides a consistent take on your brand—from micro-influencers to prominent brand names.
Get Affiliates to Refer to Your Business in Comparison to Articles
When you bring up modern affiliate marketing, social media is the first association that comes to most people’s minds. However, affiliates with well-established business websites can also bring significant traction to your brand. For example, you can collaborate with acclaimed bloggers with experience writing about topics related to your industry.
Having your brand name mentioned in a comparison article against another company’s products or services is a fantastic start for your affiliate marketing campaign. The affiliate should present the benefits of your product or service in an understandable and not-sales manner.
Outline Your Specific Objectives
Setting definite and measurable goals is essential for successful affiliate tracking. To save yourself the trouble of a chaotic affiliate marketing strategy, handle the resource centre assets properly.
If you find affiliates with significant potential, you should make the best of their influence. You may suggest they work on their affiliate marketing skills by attending special courses that will inevitably pay off for you and the affiliate.
Choose the Best Affiliates for Your Business
Building a successful affiliate marketing strategy takes much more than creating a program and expecting influencers to join. You can contact high-authority websites using tools like SEMRush or Snov.io for contact info. Once you determine your potential partners, you should contact them with 3-5 emails—not every future affiliate may respond the first time.
Follow your acclaimed competitors in deciding what to offer your affiliates in exchange for promoting your products and services. You must provide them with decent incentives such as high commissions and free products so that they deliver the results you expect. Once you make a deal with
Once you recruit your preferred affiliates, motivate them to be the best ambassadors of your brand with proper training. You can show them successful content crafted by their fellow affiliates and offer valuable feedback to increase your conversion rates.
Create a Contract
Affiliate marketing includes handling the exchange of money and services. Therefore, outlining a contract with clear expectations and conditions is inevitable for building your marketing campaign.
You can set an expiration period of 12 months with an additional renewal option and include a fixed commission structure that prevents misunderstandings. Having a lawyer create your affiliate contract to be legally binding is recommended.
Is an Affiliate Marketing Program a Go-To Solution for Your Business?
Several factors can help you decide if starting an affiliate marketing program is the right choice for your small business. First, you should take your competitors as an example and pay special attention to companies similar to yours in size, performance, and revenue.
For further insight into the benefits of programs, you may also research more prominent companies in your industry and their experience.
Your budget is another critical factor in starting a personal affiliate marketing campaign. As mentioned, it is an affordable and convenient option for growing your small business. It can lead to increased brand awareness even under tight budget constraints.
Affiliate marketing is the most budget-friendly method of boosting sales, growing base of leads, and scaling. You don’t need to establish a high budget upfront to handle a successful campaign.
Furthermore, your brand’s ability to satisfy the ongoing demand is crucial before starting an affiliate marketing program. The opportunity of increasing your sales requires much more work. So, you should take this matter seriously to see the fruits of a successful affiliate marketing campaign.
As a small business that engages with affiliate marketing for the first time, you should set off slowly and steadily in the first stages of your strategy. After some time, you can work your way up to handling many more affiliate links with the scaling of your program.
Content is the nitty-gritty of affiliate marketing. Therefore, you should strive to provide value and quality to your potential audience.
What Else Does Affiliate Marketing Offer?
Affiliate marketing stands out from usual pay-per-click ads and other standard forms of digital marketing.
It offers vast possibilities, including articles, blogs, and other formats supporting long-form testimonials, explanations, and valuable information. When you center your affiliate marketing campaign around top-notch content, it can wonder for your organic search rankings.
Finally, confidence in your products and services is essential for a successful affiliate marketing campaign. Affiliate marketing for small businesses adds an authentic, personal touch to advertising. You must believe in the benefits of your brand's products and services to get influencers enthusiastic about promoting them.
So, when a small business genuinely cares about helping its customers, it’s easy to turn influencers into actual users and fans of your products and services. That will undoubtedly lead to an ever-successful promotion!
Reasons Why Small Businesses Should Start Affiliate Programs
Small businesses will likely have a more challenging time getting into affiliate marketing by manually finding the right influencers and publishers to promote their products and services. Becoming an affiliate marketing without joining or starting an affiliate program is more challenging and time-consuming.
Below, we will cover more critical benefits of affiliate marketing programs for small businesses.
In its essence, affiliate marketing is a performance-based method of advertising. Therefore, as a small business owner, you are bound to pay each publisher or influencer only for the sales they bring to your company. This way, you get maximum cost-effectiveness of your investment without wasting your budget on ineffective methods.
Unlike other advertising methods, it is pretty easy to quantify the cost-effectiveness of each sale price. Participants decide on the affiliate commission rates upfront and include them in the legal contract. Therefore, you have complete insight into how much every sale will cost. Some affiliate programs tend to pay for every lead or action. However, the pay-per-sale method is the most common.
The Opportunity for Data Tracking
Tracking your brand's performance significantly improves operating affiliate marketing for small businesses. With affiliate tracking, small business owners can gain valuable insights into essential customer data. That includes the location users come from, the reasons for buying your product or service, and more.
Paying attention to this data can bring essential changes to your business website to increase conversions and help you reach new top-notch affiliates. Furthermore, this will increase the productivity of managing partnerships with the highest-performing publishers.
Complete Control Ensured
A solid affiliate marketing campaign gives small business owners complete control over each strategic step and easily outsources quality promotional work to viable publishers. As an entrepreneur, you can set special incentives and commission rates while providing the desired creativity to your publishers.
Each small business can select the best publishers to collaborate with, and even if you choose an inactive publisher, it won’t harm your strategy. On the other hand, businesses that aren’t involved in affiliate marketing can face costly consequences from employing an unproductive staff member.
Expanding of Your Audience
Every acclaimed publisher advertisers work with already has a valuable amount of audience. Through affiliate marketing, the advertiser can expand their own previously established audience.
Affiliate marketing offers a worthwhile opportunity to reach a greater audience than other types of advertising. The new audience you acquire during your marketing campaign can become a regular part of your lead base.
Offers a High ROI
The cost per sale in affiliate marketing is much more attractive than what Google Ads offers to small business owners. A deal achieved via affiliate marketing can cost up to 20 times less than the same sale acquired through Google Ads.
The ROI (return on investment) is much higher with affiliate marketing as a rule of thumb. That occurs thanks to the strategy of establishing commission rates only for sales in affiliate marketing, unlike the common practice of paying for any traffic with Google Ads and other well-known forms of marketing.
Top Tips To Start Small Business Affiliate Marketing Program
Amazon offers the most products and undemanding conditions for becoming an affiliate. In addition to that, the tools this website provides are user-friendly, so you don’t need to have prior knowledge of web design to use them.
Naturally, as a small business owner, you can’t expect to reach the success of Amazon’s affiliate marketing program. However, it’s the best example to consider while establishing your strategy.
Let’s tackle the necessary steps to promote your affiliate program for your small business.
Set and Achieve Realistic Goals
As it usually goes with any marketing initiative, the first thing to do is to set realistic goals for your small business affiliate marketing strategy, such as:
- The type of affiliates you’d like to promote your products and services;
- The customer demographic you want to reach via the affiliate marketing program;
- The monthly, quarterly, or yearly revenue you aim for your affiliates to bring to your company;
- The desired conversion rate of affiliate link clicks that result in a purchase.
Setting measurable goals and metrics is vital for identifying your campaign's strengths and shortcomings, allowing you to take convenient measures and changes if needed.
Understand How To Find Affiliates Who Will Explode Your Profile
Creating an affiliate program and waiting for reputable partners to join isn't enough. Finding affiliates who will massively increase your brand awareness takes effort and dedication.
Affiliate marketing tools are a great way to choose high-authority websites to promote your product or service. Once you have considered all other elements of running an affiliate program, you may create a specific list of competent influencers and publishers in your field. After determining the kind of affiliates you aim for, you may contact the potential candidates via email or social media.
Taking an example from your competition can always help you determine the incentives you should offer your affiliates. That can include bonuses, higher commission rates, and free product samples.
To get top-quality advertising from your affiliates, you should help your partners become your company's best possible brand ambassadors. Giving them proper training and auditing affiliate content is best to guide influencers into your marketing strategy.
Create an Affiliate Agreement
An affiliate agreement includes the terms and conditions between the merchant and the publisher or website as an affiliate. This is a vital legal document that determines the affiliate relationship.
The affiliate agreement determines the responsibilities of everyone involved in the marketing strategy. It also sets the commission rates for clicks on the affiliate links.
In every affiliate agreement, the affiliate is an independent party without any legal entity or venture included. By signing the contract, the influencer or publisher confirms they understand your brand’s policies previously disclosed on your website and agree to the terms and conditions.
Another requirement for affiliates in most such contracts is to follow the federal and state anti-spam laws by refraining from including any form of spam on the website.
Most affiliate agreements have affiliates earn commission rates according to the sales brought to the advertiser’s company via their affiliate links. Nevertheless, when users use, delete, or overwrite cookies, the affiliate has no right to commissions on particular sales.
Choose The Right Commission Structure
When deciding how to pay your affiliates, consider the points you have learned in your competitive analysis to make the structure of your affiliate marketing strategy more attractive. You can pay cash or via in-store credit. First and foremost, you must determine the percentage of the product or service cost that will go to your affiliates.
As a small business owner, balancing striving to remain competitive and considering your business needs is vital. The average customer lifetime value, acquisition costs, and retention rate are considered.
Track Affiliate Sales
Effective affiliate link tracking lets you visualize your affiliate marketing campaign efforts. Without this, you will be in the dark regarding your profit or the success of the affiliate links.
Any affiliate tracking technology can help you gain insight into the affiliate’s activity. There’s a pretty vast choice. You can use an affiliate software program or third-party affiliate networks and commission tracking cookies to automatically reward affiliates for every sale.
We would recommend you choose Google Analytics to track affiliate sales. Managing your marketing program via bookmarks and spreadsheets is the least effective way.
Steps To Create an Affiliate Program for Small Businesses
Below we present you with a step-by-step guide to tailoring an affiliate program for your specific business needs:
Choose High AOV Products To Promote
AOV stands for Average Order Value and is an eCommerce metric determining the average total of every purchase in a particular period. AOV belongs to the essential metrics that every business to sell products online needs to grasp. This metric can determine major brand decisions, including product pricing and layout.
You should monitor the AOV as frequently as possible—once daily or weekly. Your company should pay attention to any increase or decrease in this metric, examine the trends, and understand their reasons. Buying seasons and new campaigns are factors that can cause changes in AOV.
Two crucial metrics closely linked to AOV are:
- Cost per conversion;
- Lifetime revenue per visitor.
The former is more or less self-explanatory. However, the latter determines the total profit you get from each consumer and the average amount they can order in a certain period. Low lifetime revenue per visitor indicates that customers don’t tend to make multiple purchases, which results in lower ROI.
Recruit your Affiliates
To create an outstanding affiliate marketing program that attracts valuable affiliates, clarifying your niche is the first step. The generalist approach isn’t helpful in online marketing—you must narrow your field as much as possible.
Affiliates can also find you more effectively once you choose your target audience. You don’t need to choose one specific niche, but don’t pick more than three niches.
Some affiliate marketing tools, such as GrowthHero, include special incentives and commission structures that reward affiliates that recruit other partners. These incentives usually come in two forms: percentage of the sale commission and percentage of order value.
You can easily decide on affiliates to recruit by looking up the most successful competitors in your field paired with the word “review” and checking the list of articles from related partners. Finally, remember to prioritize a direct approach toward your potential affiliates.
After you have worked out all the previous steps of starting affiliate marketing for a small business, the most critical step is to learn effective affiliate management.
You can expect greater loyalty from your affiliates by being more active and available on social media and forums. Remember to build mutual trust with them and assist them with adding promo ads on their websites.
Finally, money makes the world go round! Financial rewards are the key motivation for affiliates. Therefore, you must choose decent commission rates that will inspire them to give their best in promoting your products and services. On the other hand, small business owners cannot afford to get overly generous or are likely to operate at a loss.
Therefore, varying commission rates according to the affiliate’s performance is the best way to go. Additionally, you can surprise them with more bonuses, offers, and promotions.