What is Affiliate Marketing?
Affiliate marketing is a performance-based strategy whereby an affiliate will get a commission for marketing the products of a company. The affiliate will search for a product they like, promote the product, and earn a portion of the profit from every sale made. The sales can be tracked via affiliate links from a website to another.
Some of the top affiliate marketing businesses in Singapore are Grab, Lazada, and Zalora. Grab has two kinds of Grab ride affiliate programs where affiliates can earn commissions either by referring new drivers or signing up as a grab driver. Lazada has a wide variety of product offerings to choose from, making them one of the most flexible affiliate programs in Singapore.
Why Small Businesses Love Affiliate Marketing
Affiliate marketing is a great strategy for building a brand and expanding sales, especially for small businesses. As it is a performance-based technique, it offers brands an opportunity to tap into rich marketing experience without utilizing unnecessary resources. Here are some reasons why small businesses love to leverage affiliate marketing to grow and expand the business.
1. Provides Social Proof
Now more than ever, online consumers depend heavily on social proof when making purchase decisions. For affiliates who have already built a rapport with their engaged audience who trusts them, their review and experience will provide credible social proof for both the brand and product. Many businesses also leverage affiliate marketing to encourage and promote user-generated content.
2. Expands reach
One of the main advantages of affiliate marketing is the ability to expand your reach. Since every affiliate that the brand works with would already have an established audience, it allows businesses to tap into otherwise undiscovered customer base.
3. Cost-effective
Affiliate marketing is a performance-based strategy, so small businesses will only need to pay for the sales generated by each affiliate. This way, no budget is wasted on ineffective advertising methods. Businesses can set the commission rates way in advance and clearly state the cost per sale. With affiliate marketing, it is relatively easy to quantify the cost-effectiveness of the price of a sale.
4. Allows data tracking
Understanding the performance of a business is key to success. One of the benefits of affiliate marketing is having access to important and significant insights into the profile of your customers – where are they from and why they are purchasing your product. Through rich collection and analysis of data, small businesses can then make changes to enhance conversions or curate improved creatives.
Step-By-Step Guide to Setting Up Your Affiliate Program
1. Set goals and targets for your affiliate program
To begin, first establish the customers and audience you want to reach out to and consider what kind of affiliates will be useful. Next, set a few measurable goals such as conversion rates and unique affiliate sales.
2. Analyze competitors’ programs
To design an effective affiliate program, it is important to understand and analyze the programs of competitors so as to competitively position your own.
3. Determine the affiliate commission
One of the most important aspects of your affiliate program is the commission structure. Do note that you should pay an affiliate only if a sale has been made through their affiliate link. You may also consider giving bonuses to the top affiliates who have met specific sale or revenue goals, or who is considered to belong in the highest performing tier of affiliates. This will enhance the attractiveness of your program.
4. Work out the other key aspects
Other than the commission structure, you will also need to determine the following:
- What are the terms and conditions of the affiliate program?
- Which marketing channels can affiliates use to promote their affiliate links?
- What is the unique value proposition of your affiliate program?
- Will there be a dedicated affiliate manager to oversee the program?
5. Look for affiliates
When it comes to searching for affiliates, you will have to choose between setting up your own chosen affiliate network or utilizing a current network of affiliates. Regardless of the path you choose, it is important to have an affiliate tracking method that allows you to be able to establish affiliate links, recruit affiliates, and track their progress.
6. Training and development
After the affiliates have been recruited, they should undergo training on the basics of the program and sign a contract with the terms and conditions clearly stated. Provide them their unique affiliate links and promotional materials and track their progress periodically.
7. Track progress
After your affiliate program has been established, you will have to monitor and keep track of its success regularly. Do keep an eye of the affiliates that are bringing in the highest amount of sales and check if your program is meeting the goals you have set during the first step.
Get Started with Aspire Today
Although operating a small business can be extremely rewarding and exciting, it is not without its challenges. Getting sufficient funds to market a small business can be a huge obstacle. At Aspire, we want to make business finances easy, fast, and transparent. With the Aspire business account, you can earn 1% cashback for all online marketing and SaaS purchases. Enjoy greater savings with no strings attached!
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