Rethink Commerce Blog

The Importance of Affiliate Marketing for Digital Customer Acquisition

Posted on January 29th, 2015 by

Present day customers are increasingly moving to the virtual world to carry out each and every step of their entire ‘buy’ process. It means digital customer acquisition is a necessary core activity for any business irrespective of its size, industry or end product.

Businesses, big and small, understand that an effective presence and active marketing on the Internet is the ideal way to canvas a global audience in an affordable way. They make full use of various virtual tools to attract their target audience. To stay competitive in the marketplace, it is critical for you to have a highly structured digital marketing strategy. When paired with a reliable affiliate marketing program, the sphere of influence of this digital marketing strategy and its impact is multiplied.

Link Between Acquisition Strategies and Affiliate Marketing

Affiliate marketing is a popular acquisition channel that many businesses adopt today. Recent stats show an 15% uplift in affiliate marketing spending yoy and representing a 10% share from the online marketing budgets of companies the UK.
However, is it really a critical tool that amps up your business’s ability to attract, convert and retain your target audience? The answer is a resounding Yes for most, depending on each company’s objectives. Some find it easier to focus on retail, for example, or make use of their in-house digital marketing teams. However, affiliate marketing offers a series of advantages that can lift your business to the next level in terms of customer acquisition effectiveness including the following:

Access markets where you do not have direct reach

With affiliates or a local affiliate network mirroring your marketing activities in a market that is geographically or culturally inaccessible to you, you get to expand your sphere of influence to an incredible degree. They have the background knowledge of the audience, the means to gauge penetration and the ‘local’ knowledge to time and position your marketing activities perfectly.

The affiliates also have direct access to the audience that enables them to get the most accurate feedback about you/your business from the audience. This makes it possible for the affiliates to tweak your marketing strategy to suit the target audience and have maximum impact on them.

An affordable way to capture new markets

With affiliates doing your marketing for you, you can significantly cut down your marketing costs. Implement a pay-per-action policy with the affiliate and you enjoy the following benefits:

  1. You pay only when a positive response from your potential customer is achieved.
  2. Your affiliate is motivated to capture new leads or sales conversions for you since their profits are linked to their success.

Scale and keep track of your marketing efforts and success with ease

By effectively outsourcing a portion of your marketing to affiliates, you eliminate the need to maintain dedicated personnel for tracking their success and driving small initiatives. Affiliates will be constantly optimizing the way they promote your products in order to get the best conversion rate.
However, keep in mind that if you want to constantly grow the channel, you need to have somebody constantly working with them, answering any questions they may have and recruiting new affiliates.
When using an affiliate network, you will have access to dedicated reports that will show you the performance of the affiliate channel. At any point of time, you can simply see the relevant information and make your decisions on that basis.

Focus on core business activities

If you are interested in promoting your product or service to a wider audience, there is little doubt that a considerable amount of attention and energy needs to be invested in the activity. It does cause a dilution of attention to your core business activities as a result of which your overall business efficiencies may suffer.

Good for start-ups with limited resources, the top Affiliates such as Retailmenot or Ebates are multimillion or even billion dollar companies that invest heavily in their technologies and marketing and you can take advantage of their audience engagement and have a fast access to their targeted shoppers .

Eliminate capital expense

To successfully capture market share in a highly competitive niche, it may become necessary for you to establish a base in the region. It is especially true if you want to expand your reach beyond geographical boundaries into an area where your business does not have a physical presence. Setting up an office, equipping it, hiring staff to man the office – all of these involve capital expenditure. Plus, there will be tax implications when you open a branch office in another country. An affiliate can carry out the same tasks for you, eliminating the need for a branch office.

Understanding customer preferences

The proximity of the affiliates to your target audience gives them a unique insight into the minds of the potential customers. The affiliate can gauge the trends in the marketplace, understand customer preference with far greater accuracy and it can be leveraged to your advantage. Backed by accurate information about your customer profile and preferences, you can tweak your marketing plan and even production process to match your audience more effectively.

There is another way in that the nearness of the affiliate can be to your advantage. The affiliate’s existence in the same marketplace as the audience you target through them allows them to gauge the market’s unique set of ebbs and flows. This knowledge can be used by you to tweak your marketing plans for various markets so that you target various customer segments right at their peak demand periods and maximize your conversion rates.
This has to be backed up on your side by providing affiliates with the necessary materials to make it effective for them to promote and convert visitors for you.

At Avangate, we understand that business owners may have several queries about signing up for an affiliate marketing programs. We aim to address these queries and discuss best practices in managing such programs at affiliate events like the Affiliate Summit West 2015 Conference. Here, Avangate Affiliate Services Senior Manager, Cristian Miculi presented on how to grow your affiliate program efficiently using multiple networks. We also showcased some of our partners in our brand new event called ‘Digital Alley’. To learn more about affiliate marketing and its power to drive your business’s digital marketing strategy to the next level, please stop by our exhibit or contact us.

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Raj Badarinath

VP, WW Product Marketing and Alliances

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