A Win – Win Situation – Why Companies should consider using Affiliate Marketing

What is affiliate marketing?

How can B2B organizations get the most return on investment from affiliate marketing programs? This post serves as a baby step into the huge world of affiliate marketing and how B2B companies should consider starting an affiliate program, whether for their own products or partnering with organizations that have complementary products or services.

So what is it?

In the simplest terms, affiliate marketing involves selling third-party products and services for a commission.  According to AffStat, 80% percent of affiliate programs today use revenue sharing or cost per sale (CPS) as a compensation method, 19% use cost per action (CPA), and the remaining programs use other methods such as cost per click (CPC) or cost per mille/thousand (CPM).

Affiliate marketing has been widely used for years, primarily in the B2C market.  A Forrester Research report indicated that B2B affiliate marketing is a multi-billion dollar market.  More and more B2B companies are taking a closer look at affiliate marketing because it’s a quick, cost-effective way to deliver brand awareness and generate revenue.  Affiliate marketing is done on-line; therefore, it’s trackable, and compensation is performance-based depending on the action (e.g., lead, click, or sale) keeping customer acquisition costs very low.

How can B2B organizations succeed with affiliate marketing?

As with any marketing programs, it’s critical that affiliate marketing fits within an organization’s marketing plan.  It’s also important to have a specific set of goals for an affiliate program, resources to coordinate it since a large portion involves business development and relationship building, and an excellent knowledge of targeted niches or markets that compliment your company’s products/services.

Affiliate partners can range from product/services providers to blogs/bloggers to industry associations.  Affiliate marketing also enables companies to cost-effectively reach or test new markets or niches, identify strategic partners or place their products and services where others may not search for them.

Affiliate marketing companies

If you do a Google search you will come across hundreds of affiliate marketing companies in specific markets.  Top affiliate marketing companies like Kowabunga! And LinkConnector are currently working with B2B organizations like Marketing Sherpa and Getty Images, respectively.

Many B2B organizations are still not putting enough attention in this area and should.  The benefits far outweigh the costs.  Two great resources on affiliate marketing include Shawn Collin’s AffiliateTip blog and the Affiliate Tips website. Have you considered or are you currently using affiliate marketing within your organization? Please feel free to share your experiences.  We’re always interested in learning from you!

It’s estimated that in the last year, $95 billion was transacted online as a direct result of affiliate marketing.  And those affiliate marketers earned over $6.5 billion in commissions.  So, whether your affiliates are getting paid for sharing your message, your business and bringing your organization sales you should definitely consider adding affiliate marketing to your marketing plan.  It is a low dollar investment for a HIGH dollar ROI.