Why Affiliate Marketing Works for SMBs

— September 27, 2017

We’ve mentioned before that right now is an amazing time to get into affiliate marketing. It’s a channel that’s growing by leaps and bounds, and now affects 14% of all e-commerce purchases in the US.

Why Affiliate Marketing Works for SMBsPictured: actual online shopping transaction.

And while big brands like TripAdvisor have had great success with affiliate marketing, SMBs are poised to benefit even more from starting their own program. Let’s see why affiliate marketing specifically benefits small businesses.

Only pay for actual sales.

Unless you’re one of those startups that is backed by investors with bottomless pockets so you don’t really have to do anything (you know, like Juicero), you probably have a budget… and a tight one at that.

Marketing can be expensive and often you just don’t see results, especially if your SMB runs CPM or CPC campaigns. Paying for eyeballs and clicks have their place, but there’s no better way to spend a limited marketing budget than to pay only when a sale is made.

That’s where affiliate marketing wins the day. It’s a CPS (cost per sale) model where you only pay out a commission once your affiliate partner’s efforts translate into an honest-to-goodness sale of your service or product.

Big brands may have millions in their marketing budget, but if you run an SMB that needs every penny to show tangible results, this is the best bang for your buck. And don’t take our word for it; follow the first link in this post to see how favorably it compares to pay-per-click, display, and email campaigns.

Kickstart your brand awareness.

Speaking of the big brands, if you’re Apple or Coca-Cola, you don’t worry too much about brand awareness. But if you’re an up-and-coming business, you need to be diligent about getting your brand out there, through every channel including (and especially) social media.

Why Affiliate Marketing Works for SMBsYou too can start a stock photography business with just a camera and a Scrabble set.

And branding is important. From past Nielsen studies, 60% of “global consumers with Internet access prefer to buy new products from a familiar brand rather than switch to a new brand.” Why? Because they already trust your brand.

That’s where affiliate marketing comes in, because at its core, it’s all about the extension of trust. The partners you work with, who are likely micro-influencers in their space, are putting their stamp of approval on your service or product when they display your link to their audience. It’s a transfer of trust that is nearly impossible to replicate in any other type of marketing.

The best part is that the brand recognition that comes with affiliate marketing is almost a bonus as SMBs still only pay commission on a sale, as discussed in our previous point. It’s a great one-two punch for your advertising buck.

“Outsource” your marketing team.

How big is your marketing team? One or two people? Maybe it’s still just you, the founder of your small business. Hiring someone to run marketing campaigns is costly, and many SMBs can’t afford to spend in this area… even though they know how important marketing is at the start of a business.

Why Affiliate Marketing Works for SMBs“This is our social media guru.”

So for SMBs not yet ready to expand their staff, working with affiliates effectively outsources a big part of your marketing. Good affiliates will write the content, maintain their own blogs and social accounts, spread your brand, and you won’t even need to buy another stand-up desk for them.

So it’s “set it and forget it?” Not at all. A good affiliate partnership is more than just paying commissions on time. It takes time and effort to provide them with support, solid communication, and incentives to succeed. But is it anywhere near the cost of hiring an internal marketing manager? Not even close. We see small businesses with an army of affiliates with very little overhead to manage them all.

 

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