Affiliate marketing can significantly increase sales figures, with only a little increase in the quality and quantity of affiliate partnerships. The advantage of using affiliates is that it increases the leverage in the marketplace.
Imagine getting people out there selling your product all day for free, and they don’t make a penny until they start selling stuff for you. It’s excellent writing checks because you are getting two dollars back into your pocket each dollar you write to an affiliate.
Someone once said in response to a question on increasing page ranks in search engine searches that eight simple words have been essential, ‘I rely on my network of affiliates.’
Affiliate manager, Stu McLaren, said the advantage of increasing affiliate numbers was clear. Still, it was essential to have active affiliates that continue to promote the product each month rather than in a one-off attempt. Understanding how affiliates increase sales can be easily seen in a formula.
Total Sales = Product or service price * the number of active affiliates * number of monthly sales per affiliate.
Increasing any part of the above formula will increase sales; however, increasing the product’s price will decrease the other two variables in the formula. Not all people that pay $30 for a product or service will be as willing to pay $40. However, increasing the number of affiliates or sales they make will exponentially increase on the bottom line.
Total Sales $10,000 = Product price ($100) * affiliate numbers (10) * monthly sales per affiliate (10)
TS $15,000 = Product price ($100) * affiliate numbers (15) * monthly sales per affiliate (10)
Increasing affiliates and monthly sales:
TS $22,500 = Product price ($100) * affiliate numbers (15) * Monthly sales per affiliate (15)
This example shows that it doesn’t take considerable increases in the number of affiliates or units sold to have a substantial increase in the bottom line.
It is vital that the affiliates are active, and they worked each month to get the product out to the marketplace. An affiliate manager’s role is to ensure that affiliate numbers increased and there are a high number of active affiliates.
It is just now coming to peoples’ minds that such a small increase can have such a huge impact. Businesses are currently looking for affiliate managers, and if you look at the employment lists, affiliate managers are being sort after.
There is a tiny amount of affiliates that would be classed as active affiliates. I would say on the average affiliate list, about 2.5 to 5 percent would be engaged. The affiliate manager’s role is to increase the number of active affiliates and train them to sell the product.
It is in the manager’s best interest to train affiliates because they were more likely to remain active and draw more affiliates into the system if they increased their own individual sales figures.
Companies going through stagnate periods of growth or looking to hit the ground running should look at developing an affiliate network. Not only will it significantly increase sales, but it could increase them rapidly and, with a little effort, could lead to long term business partnerships.
Contact GrowSmart for more Affiliate Marketing Strategies.