Using affiliate marketing to generate leads

One of the big hurdles for small businesses is generating leads. How would you like people you've never met promoting your business online round the clock and you only have to pay them when you make a sale? Welcome to the world of affiliate marketing.

As most of us are our own salespeople, we have to become proficient at sales if we want our business to succeed. An often overlooked aspect of online marketing is that if you set it up correctly, it can act as your salesperson and generate leads. I'm not talking about website traffic, but real, qualified leads that bring you one step closer to a sale.

Affiliate marketing is where you, the seller, allow anyone to display an advertisement of your product on their website. When someone clicks on this ad and buys a product from your website, you pay the person displaying the advertisement, known as the affiliate, a commission. A good example of affiliate marketing is Amazon, the first company to harness this method of online marketing. Once you've finished this article you can read more about Amazon's affiliate marketing program.
How can you use affiliate marketing?

Whether your website sells products or services, there are several ways you can structure your affiliate program. The most common way is either a cost per sale as commission, that is a set cost for every click, or a cost per lead.

Every time an affiliate sends someone to your website via your ad on their website, a cookie follows them - not of the chocolate chip variety, but of the tracking variety. So if someone makes a purchase from your website, you can track how much they spent, i.e. the cost per sale. Or, if you are using the cost per lead model, the cookie will allow you to determine whether they reached your target page, for example an enquiry form page, successfully.

The standard rate for each lead is between $5 and $35, however some are offered at as little as 50 cents, although I don't think there would be too many affiliates promoting these!

Most of the technical details are taken care of by a third party, who operates as the interface between you and the affiliate promoting your advertising. You will need to set up an account and a budget with the third party and they will take care of confirming that a sale or lead has taken place, paying the affiliate, as well as taking their own cut.

To protect your brand you can write and design the type of ads you want displayed by your affiliates and some programs will also let you approve the types of websites that display your ads. The key to a successful affiliate marketing campaign is flexibility. Amazon gives their affiliates a range of ads to choose from and they even allow them to make up their own ads.
What makes it successful?

Affiliate advertising is used to make money, so no one is going to put an affiliate link on their website if they don't think some of their readers will click through to it. This means your link is often in a highly relevant and targeted environment. And don't forget, you're only paying for conversions, so in the case of cost per sale you don't pay anyone who advertises and doesn't make a sale. And in the case of cost per lead you, you only pay for a qualified lead, e.g. someone who has filled out an enquiry form on your website.

Learn more about this author, Louise Gorrie.
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