Why is Affiliate Marketing Effective for Small Business Owners

(+ Step-by-Step Guide to Get Started)

Is affiliate marketing effective for small businesses? Can this channel help your business get more customers and earn more money? The short answer is yes. The long answer is thoroughly described below, with all the details and explanations you need to successfully jump into leveraging affiliate marketing for your brand or product.

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Let's start with the basics

To get started, let's briefly clarify what affiliate marketing is. It is a performance-based marketing that is based on the cooperation of multiple parties. One of them is a business that sells products or services (like yours), the other one is an affiliate who advertises the products or services and, thus, earns commissions based on her … you guessed it… performance. The third party can be the software that tracks this all and makes sure both business owners and affiliates get their earnings right.


Wiki puts it defines it more clearly: “Affiliate marketing is a type of performance-based marketing in which a business rewards one or more affiliates for each visitor or customer brought by the affiliate's own marketing efforts.”


If we want to visualise the process, it looks like this:

Affiliate program visualisation

Why should you care about other affiliates (advertisers) promoting your product if you can do it yourself, you may ask. There are, of course, more perspectives. The truth is that leveraging external resources can help you reach the audience that you haven't reached yet. Your resources – typically marketing budget – will also be limited and getting external help can help you boost your outreach. Besides that, affiliate marketing is based on performance. That means that you pay your affiliates AFTER they bring you a customer or get a visitor to your site.


Let's look at numbers first. Overall, affiliate marketing generates around 20% of all revenues for businesses like yours. That being said, this channel which you probably haven't discovered and fully leveraged yet, truly represents a potential to grow your revenue. 


Discover the payment models

We've briefly touched on the performance thing. Let's dig deeper into what performance means, as there can be many types. Most importantly, you probably want to reward your affiliates based on the sales they bring, right? 


In this case, you pay the affiliate's commission first when the purchase is completed. This model is called cost per sale (CPS). The good thing is that you can set this to a certain percentage of your order. This way you can motivate your affiliates to bring customers with a higher value. Sounds great, doesn't it?


When your goal is to generate leads, you also want to award affiliates for the leads they bring. Cost per lead (CPL) is the model you'd be using. In other words, every time your affiliate brings a website visitor who fills out a form or downloads an e-book, he gets rewarded according to your CPL model. 


Last but not least, if you want to reward affiliates for every single website visitor they bring, you can use the widely-used cost per click model (CPC).


And now the best thing is...that you can combine these models! In other words, the way you pay your affiliates depends solely on you and your business. 

Just keep in mind, affiliates are here to EARN. Make the offer juicy enough, I'll get to more on that later…


Let's look at what it would look like if you combined the CPC and CPS models:

CPC and CPS models



Once the user clicks the link and goes to your website, the affiliate gets rewarded. Once the user completes the order, your affiliate gets rewarded again. This way, you can motivate your affiliates and still base their rewards on performance that matters to you.


If you're unsure how to set your reward structure, think of an affiliate as another marketing source, that at the end of the day represents a marketing cost. Are you happy to pay 10% of the order value to acquire a customer? Cool! You have a number on which you can build your CPS model. Besides that, you can get inspired by the industry standards. Here are the top 20 categories based on the procentual rewards:

Graph of categories


To get started, have the right tool stack in place

To manage your affiliate program successfully, you need to have the right tool stack in place. 

As said at the beginning, you will need to have affiliate software in place that manages the affiliate onboarding, calculates all rewards, allows you to give any content you wish to your affiliates and offers tools for communication. 


Running an affiliate program is not as easy as it may seem. You really need to dedicate time to acquire motivated affiliates, constantly provide your best content, track the performance, communicate with them in case needed and pay their rewards every month (or for another period of time).


Let's get back to the right affiliate systems. Entrepreneur.com already did the job for us and picked the 10 top affiliate marketing tracking softwares. The one that we are excited about is Tapfiliate. Make sure to check that one too.


Some companies even outsource the workload that goes hand in hand with managing the affiliate program. They hire experienced affiliate managers that do the hard work for them. They leverage their networks to hire affiliates, manage the onboarding and communication and track their performance. To hire yours, use platforms like Upwork that allow you to hire staff on demand. If you're a small business owner, you may want to manage the work yourself, but keep this option in mind as you grow. It can save you time and help you get much more out of your affiliate program.

How to acquire affiliates

So you've decided to jump straight into setting up your affiliate program? That's great! You did the math and came up with a reward structure, chose the tools that will help you make your plan come true and are now thinking of getting your first affiliates… Let's speak about some ways to get motivated affiliates then!


Direct contact. Yes, that's exactly what I have in mind. Searching for affiliates that are already active in your field, promote your competitors (but may be happier to promote your business), are influencers with a loyal audience that represent your potential customers or bloggers, and Youtubers that write or speak about products like yours – you know all the unboxing videos on Youtube, right? That's what I have in mind.


Events. Affiliates also don't want to miss the trend. Thus, they gather at conferences and events to get the latest tips, leverage the newest technologies and tactics and to share their experiences. This is your chance! Choose some of the events and get the most out of your networking skills. Here is the list for 2020. You're welcome!


Make your program visible. Use online channels like social media, paid search campaigns or video ads. You may want to make your program visible to a relevant audience (potential affiliates) so that they can join you. If you're a newbie to online campaigns, check out our tool that simplifies this process so that even your grandma can do it. No kidding.


Invite your best customers. Invite those who are most excited by your product or service. Obvious, right? Who else should help you spread the word around than your happy customers, especially if you reward them.


Note: This, needless to say, depends on the characteristics of your audience. If you serve wealthier clientele, they may not be interested in offers like these.


Affiliate networks – another platform you may want to use. As the name suggests, affiliate networks gather affiliates into a network. You, as a business owner, can leverage these networks and acquire some of the affiliates into your program. This way you can save time searching for affiliates directly and approach them in one place. Of course, this service is costly, so you may consider this option according to your budget options. To get a better idea on how affiliate networks work, check this complex answer on Quora.


Keep in mind, your key goal is to find those affiliates who are able to reach your potential customers. This is crucial. Having 10 affiliates that truly can reach your potential customers is way better than 1,000 who cannot.

Insider Tips & Tricks

Stay local. If you run your small business and focus on concrete location, choose affiliates that operate within the same region. Therefore, search for bloggers, influencers and affiliates who are close to your potential customers.


Always keep an eye on what content your affiliates use. This brings us to one of the cons affiliate marketing has. As you build your affiliate network, your brand is in the hands of other advertisers, not just yours. That represents a risk, as you may imagine. What if they don't use your logo, claim or other brand asset properly?! Keep an eye on that.


Make sure they do not compete with your other ads. Affiliates are here to reach MORE potential customers, not compete with your own ads. Imagine you run search ads on Google and target the U.S. and use the keyword “men's hiking shoes”. If your affiliates target the same keyword, the cost efficiency of your ad will decrease. Make sure you have that under your control.


Communicate with your affiliates. Your affiliates are your partners. They help you grow your business. Make sure to stay in touch with them, organize common events, send them birthday messages and Christmas (or other holiday) presents. 


Calculate your costs and profit margins properly. If you don't, your payment models can go sideways and you will, instead of earning more money, lose money.


At the same time, make your offer juicy enough for your (potential) affiliates. They are here to earn money. It is as simple as that. If your offer does not resonate, they won't join you.


Create great content that sells. Your affiliates provide you with their channels and audiences. But the content – probably the most important factor of your successful campaign – is on your side.


Thoroughly track the performance of your affiliates. Affiliates are people too. People tend to search for shortcuts, especially when it comes to ways to earn money. Make sure you check your data thoroughly and reward affiliates based on the real outcomes they bring you. You may want to see the performance in multiple tools like your affiliate system, Google Analytics, ecommerce solution like Shopify or WooCommerce and others.

Get started with our easy guide

To sum it up, we thought that giving you a complete guide to get started may help. Thus, see the infographics below that can help you with the very first steps.

Sum up in points


Are you gonna start with affiliate marketing now? 

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40+ Tools for Creating Visual Content on Social Media

It is well-known that visual content is the basis of success on social networks. It’s easier for users to consume pictures and videos, than text. It’s also more visible in a mess of other content. According to some studies, tweets with pictures receive up to 150% more retweets than plain text posts without pictures. So, it is clear that the importance of visual content is steadily increasing and you definitely shouldn't ignore it.


You don't have to worry, you don't need to hire expensive agencies right away. You don't even have to learn to work with complicated and expensive tools, like Photoshop. Fortunately, today there are plenty of free online and mobile apps available to create visual content in just a few clicks.


In this article we will introduce you to 40+ tools that are available on the internet for free. We use these tools on a daily basis, so we can highly recommend them.

Canva

By far the most famous online tool for creating all kinds of visuals, and not just for social media. Canva allows you to create literally everything you can think of — from nice Facebook covers to Instagram Stories to beautiful Infographics. You can choose from dozens of templates and it all works for web browsers or mobile apps.


Vizzlo

Whether you need a simple pie chart or a complex business graphic, Vizzlo's portfolio offers you a broad range of different visualization choices. It works for browsers and it is easy to use. You can enter your data using the simple sidebar, and then choose to import spreadsheets from Excel or Google Sheets. Add the result to your slides and documents or directly share it on all your social media channels.


Graphicriver

An endless collection of various templates, fonts, logos, flyers and much more. Graphicriver is where you can find ready-made graphic designs for almost any digital content. You don't need to hire an expensive agency and create all visuals and graphics from scratch. It is often enough to modify existing templates. This saves you not only a bunch of time, but also money, because the prices of the templates are very low.


Tip: If you are not familiar with editing graphics, try to outsource it via Fivver.


Landscape

Size matters! At least when it comes to social media. Landscape has hundreds of recommended dimensions, sizes and ratios across different platforms and devices. It is easy to get lost in these constantly changing numbers. So try to use Landscape by Sprout, it helps you resize multiple images for your profiles automatically.

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Take Your Small Business to the Next Level with Marketing Automation Software

One of the buzzwords and a key trend in marketing is automation. Even though it may sound complicated and unaffordable for small businesses, the opposite is true – you only have to know where to begin. If you know what to focus on, choose the right software and analyze your efforts, marketing automation can truly get your business to the next level.


Marketing automation is, as the name suggests, a category of technology that streamlines your marketing activities. It gives you the power to focus on customers with the highest potential and saves your time by triggering messages (campaigns) across multiple channels without you having to start them manually. A miracle, I know.


There is always a buzz around new technologies. We recommend reading our article about the difference between Hype & Trend. Marketing automation, we believe, is a trend to stay. Jump on the train as soon as you can. No matter how big your business is. If you choose an affordable solution, your business can never be too small for this.


There are more arguments to start using a marketing automation tool:

  • It saves you time by automating manual effort.
  • If done well, it increases the revenue and saves cost.
  • It allows you to nurture your most valuable customers and focus on new customers with the highest potential.


Stop. Doing. Manual. Work. Period. Let technology help you automate. It's not as hard as it looks. You will find out soon, just bear with us…


Where do you start?

Let us guide you through the very first steps to start using marketing automation that will take your business to the next level.


1. Set your priorities

Be clear about what you want to achieve and how you'll track it. This is a prerequisite to get started. If you don't clearly set your expectations, you won't know where to go and you won't recognize when you get there.


Do you want to save time? Great!  Are you more interested in increasing your response rate? That's cool too. Would you like to generate more leads? That counts as well. Goals and expectations should come out of your status quo - no one will help you here, just you, so start by defining your goals.


2. Define the customer journey & touchpoints

Know the journey of your customer. You can only optimize if you know what leads your customers to purchase. We are fans of marketing funnels that help you (in a simplified way) understand the customer journey. Draw one for your business – you will get a better idea of where your customers get stuck.


Let us give an example here. Say you run your real estate business. Your primary selling point is your website with all the listings and offers. You run Google, Bing and social media ads to generate traffic. You might send some newsletters too.


Your primary goal is to generate leads and close them, right? There are multiple touchpoints throughout the customer journey (before you close the deal). Here is what a customer journey may look like:


3. Find out what can be automated

Now that you know how your customers behave – you've identified the touchpoints, let's slowly start automating. Or better said, let's find out what can be automated. Tools like Hubspot, ActiveCampaign or Keap are mostly focused on email marketing, social media ads, search & display ads, SMS, widgets and pop ups on the website. These represent the channels that you can use to get in touch with your audience. Let us expand on our example above. The touchpoints where the communication can be fully automated are now marked in red:

4. Choose the right automation software

There are plenty of tools to choose from. Going back to your potential question: “Are these tools affordable for small businesses?”, note that you don't have to pick Marketo or Hubspot to automate your efforts. These are tools mainly for enterprises that operate with big marketing budgets. Not in our case. We go small. But effectively…


Let's list some of the tools you can use to start automating your communication:


  1. ActiveCampaign

ActiveCampaign gives you not just marketing automation software, but CRM on top. Its pricing starts at 9 USD (if paid annually) and offers not just email marketing, but also SMS, Facebook targeting, subscription forms and personalised content on your website. It's a great tool.


  1. Keap (by Infusionsoft)

You will have to go deeper into your pocket here. Plans start at 49 USD, but they offer you a sales pipeline plus invoices & payment management on top of what ActiveCampaign gives you. If you lead a sales team, this can be a great choice.


  1. Drip

As well as other automation tools, Drip focuses on campaign orchestration – creating a single view across multiple channels. We worship the 360°customer view and so does Drip. Their focus is ecommerce and they offer great features, like personalised product recommendations.


  1. Mailchimp

It started solely as an email marketing tool, and is now moving into the automation platform. Mailchimp offers features like landing page creation, social media ads and soon-to-be-launched marketing CRM. Pricing starts at 9,99 USD plus they offer a freemium to play with the tool and use basic features.


  1. Zapier

We love Zapier – the glue of the internet. It allows you to connect two platforms that, by themselves, do not communicate with each other. Say you generate leads on your Wix website and need to send them to your Drip account. Zapier helps you do that – automatically of course. With more than 1,500 platforms, they are the real glue of the internet...


  1. groost

As much as we love Zapier, we adore our own solution – groost. The name itself says that it'll grow & boost your business. We do it by automating and simplifying your campaign management. If you need to generate more leads, increase website traffic or get more post engagement on your social media profile, you probably run paid campaigns – knowing that organic reach is constantly decreasing – which can be overwhelming. Learning how Google Ads, Facebook Business Manager, LinkedIn Campaign Manager or Bing Ads work takes ages. Not with groost – a single platform for all your marketing efforts. We do offer freemium too to show your business on both Facebook and Instagram – try it out!


5. Analyze your efforts after some time & improve

Make sure to come back and analyze your efforts. As Peter Drucker said, if you can't measure it, you can't improve it. Analyzing what works and what doesn't is crucial. We recommend running continual AB testing to optimise every step of your funnel and every touchpoint with your customers. All tools that have been listed above allow you to do so easily.


These are the 5 easy steps to get started with marketing automation. Some of them might seem obvious, but believe me, there is no shortcut. Set your priorities first, define the customer journey and touchpoints, find out what can be automated, choose the right tool(s) and after some period of time, come back, analyze and improve.

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Where Can You Publish Your Ads?

Today's online services have one major advantage. They track users and collect information about them and segment it accurately. This is a huge advantage for advertisers because they can specify their target audience precisely, so that an ad is shown only to a relevant people.


Surely, you come across such ads daily. On Facebook, Google Search… lots of you have probably tried to publish similar types of ads on these platforms.


Facebook and Google are obviously dominants of the PPC ads market. But did you know that there are a number of other platforms where you can advertise in a similar way?


You may think that this is unnecessary, when most internet users are using Facebook or Google and their services. Yes, it is true, but it doesn't mean your ad will be effective on these platforms.


Each user behaves differently on different platforms, which means that he can be immune to your Facebook advertising, for example, because he only goes there in the evenings to watch some funny videos, so advertising for selling real estate is not relevant to him. Maybe, in the morning, when he opens Linkedin, he is in a completely different state of mind and is ready to see the ad and take action.


The goal of this article is to list relevant platforms where you can advertise your services. To find out which platform is most effective for you, read this article.

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6 Things to Avoid When Hiring a Marketing Agency

For anyone who’s not an expert in this field, marketing strategies, SEO or social media can be like a maze. If that’s the case, navigating through it can get super difficult sometimes. However, that’s okay! Marketing agencies exist exactly for that reason — to help business owners and entrepreneurs efficiently use their business’s potential in the name of marketing. Naturally, you want your business to grow. You decided that it’s time for you or your firm to start working with a marketing agency. Good for you! But where do you start? How can you make sure that you choose the right one? There are so many questions that might seem tricky, but this list of things you should avoid will answer the most crucial ones.

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How Much Does Facebook Advertising Cost?

Well, that’s a tricky question – there are so many variables at play. Depending on your situation, the cost of your Facebook ads could be as much as $10 per click, or as little as 40 cents.

The most important factor is efficiency and performance. Your ads might be super cheap, but if they do not bring any results, it's a waste of money. Define the purpose (the goal) of the ad and what is your cost limit to label the ad as efficient. Many businesses measure success by the number of sold products, leads generated, or potential customers engaged.

There is no rule or benchmark for this, each business is different with different needs and circumstances. Someone might be satisfied with a new lead for $45 and another might not go over $10. One person might consider a $3 cost per click as successful and another would not want to pay more than $2. Calculate the revenue you can get from the lead and think about how much you want to spend per action, this way you can always check whether your ads perform well or not. 

Before you spend a lot of money, try to set up your daily budget for $5 a day. (We will talk about how to set your budget later). Monitor your results. If the ad performance meets your ideas and you have money to raise the daily budget, do it. And do it again, if the ad is bringing you results.

Remember: If your ad is comical, visually appealing, engaging, or all of these combined, people will like, comment or share it more often than they would with some boring copy with a blurry image. If you really want the most from your paid ads, they have to be great to make the people share them and so the ads will be also spread organically. Deciding how much to spend is a good place to start, but always make sure each dollar goes as far as it possibly can. The key is the visual, the text, as well as targeting. Regarding your content creation, read my article about buyer personas, because you should tailor-make it for your ideal customers and you can also find more helpful info in this article about tools for creating visual content.

So, how can you get an idea of how much Facebook advertising costs before diving in?


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How to Create a Facebook Business Page

This is a short guidance on how to create your business page. As mentioned in the article about facebook formats, the business page is sort of a profile of your business. Once it is set up, you can post any promotion, funny story, new opening hours or whatever you find relevant there.

Creating the page itself is not difficult. You only need your Facebook profile. In the upper bar on your profile, find the button “Create” and select “Page”. Choose “business or brand” and then enter all the needed info.

You will be asked for the page name, your business address (it does not have to be shown to anyone), your profile picture, as well as the cover picture. As you can see in the picture below.

Facebook business page
4 Easy Steps to Get Started

When you enter all the information, you can start building the content of the page and then start inviting people. In the upper bar you can go, for example, to your inbox to check your messages, in the Insights section you can see how posts and the page perform overall, and in the publishing tools, you can schedule your posts as we explained in the previous article about community management.

Facebook Business Page
Newly Created Facebook Business Page

If there is a specific action you want the visitors of your page to make, you can add a button for “Shop now”, “Contact us”, “Download game/app”, and plenty of other options. It is handy and makes the page look professional.

Facebook Page Button
Adding Facebook Page Button

It is very easy to add any piece of content to your business page, but sometimes it is confusing to switch between your profile and the page. Lots of entrepreneurs struggle with posting personal things on their business page and vice versa :). Don’t forget to switch between profile and page! On your mobile phone you can find your page on your hamburger menu. On the desktop, you can switch to it in the upper bar by clicking the little arrow.


Manage Facebook business Pages
Find the Facebook Pages You Manage

Creating a page is not a big deal, right? To use the whole potential of Facebook for businesses, you should create a business manager account, as well as, an ad account to be able to run your paid ad campaigns. Regarding Facebook advertising, you can find complex info in our e-book!


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