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Using your budget efficiently during troubled times
The world and its economic conditions are constantly changing. Some don't see much change in their performance, some cut their budgets completely, while others increase their advertising spending, aiming to generate revenue beyond their wildest expectations.
We can say with confidence that there is an opportunity to make a profit in these crazy times. But for this to happen, you need a clear and profitable tool for increasing sales, where you pay for the result, instead of paying for advertising (which does not guarantee sales).
Recently, affiliate marketing has become one of the main tools of the marketing mix for the Internet. The affiliate program is an effective technology that increases sales with minimal investment. Affiliate marketing works solely on the motivation of partners, not marketing investments. According to performance indicators, this channel is compared with email newsletters, SEO, and contextual advertising. So, for many businesses, this advantage looks obvious.
Affiliate programs are a great way out for those who don't want to and cannot invest a lot of their efforts and finances in advertising. Admittedly, these are not the quietest economic times, and we are increasingly analyzing where every penny goes. And with the help of referral systems, you can ensure a flow of customers and increase sales at the expense of your partners. At the same time, you will certainly not spend the advertising budget for nothing, as affiliates are rewarded only as a result of their results.
What is affiliate marketing?
It is promotion with the help of affiliates (referrals) who talk about your products and services and get a certain reward for it. Affiliates are not producers or customers, but independent sellers who promote your product and recommend it to other people. Affiliate marketing expands standard chain of sales participants. Sellers (producers and employees of the company) and buyers (clients) are accompanied by the third party - an intermediary between them. It works on both sides: it helps producers promote the product and tells customers about its advantages. For this, they get a certain percentage: usually up to 10 percent as for physical goods or services and from 10 to 50 percent if you work in the information business.
Partnership payment methods
There are several payment models for affiliates:
- 1. PPS (pay per sale) - payment for the sale.
- 2. CPA (cost per action) - commission for performing a certain action by the user (downloading the price list, filling out the feedback form, etc.).
- 3. CPC (cost per click) — the partner is paid for each click on a link placed on their site.
The methods are listed in descending order of frequency of use. The most common model is PPS - payment of interest for sales. This payment method motivates the affiliate best of all to perform quality work and attract the target audience. The more accurately the partner gets to the target audience, the higher the conversion of leads to sales and, accordingly, the income.
The CPA model is also very popular. Many people who earn money from referral programs like it more than PPS. After all, the number of sales cannot depend directly on the affiliate. A person may be seriously interested in a product due to a partner's high-quality advertising, but change their mind at the last moment because of an unsuitable price, low product quality, or the lack of professionalism of your employees who process leads. In the case of payment under the CPA scheme, the partner will receive a reward for bringing the target audience to you. And whether its representatives will make a purchase or not depends on the entrepreneur himself.
3 reasons to launch an affiliate program
- 1. A quick way to boost your business. You don't have to do it alone. The more partners advertise your products, the faster they will become popular and well-known.
- 2. A manifold increase in profits. Advertising partners will inevitably lead to sales, which will bring you revenue. The more affiliates you have, the more profit you make.
- 3. Instead of continuing to spend a lot of money on advertising on Facebook and Google, you can now move to the rational use of the budget. You only pay for the result and don't spend a lot of money on questionable advertising campaigns. You will agree that at a time when the economy is particularly unstable, this point will probably be the most important.
Obviously, most people stay at home: some of them work remotely; some are on sick leave or can't work. People spend much more time on the Internet. It is the best time for affiliates, and therefore for businesses that can use partners to maximize profits and make sure that no investment is wasted.
In such uncertain times, you must remain open to take advantage of the opportunities that come your way.