A marketing approach that involves building relationships with external parties and providing incentives to refer new customers. Typically, the affiliate receives a percentage of any revenue from sales that they refer. In DTC marketing, affiliates are often referred to as influencers. However, in B2B, an affiliate could be an individual, company, or agency.
Need to Boost Your Outreach?
Affiliate marketing is an innovative way to extend your reach and find new buyers. The evolving digital world has given way to a variety of new approaches in the marketing space. However, working connections remain one of the best ways to get your product or solution onto the market.
In the DTC industry, affiliate marketing is the new go-to. Influencer popularity skyrocketed in recent years, and consumers now trust them more than ever to recommend the best products. This sense of loyalty and connection between content creators and their audience
has driven consumers to new markets and new purchases.
How does that translate into the B2B space though? Truthfully, affiliate marketing is still evolving in this industry. Due to the longer sales cycles and the nature of the products on offer, the marketing strategy has had to adapt.
However, B2B sales rely on trust and reputation. This is something that naturally lends itself to the affiliate marketing strategy, which has the sole purpose of generating sales based on an established connection.
As the innovative marketing approach begins to pick up pace in the world of SaaS, what do you need to know about affiliate marketing?
Affiliate Vs Partner
You might have heard affiliate marketing referred to as partner marketing, and vice versa. But, is there really a difference between the two?
The distinction between these two approaches doesn’t necessarily impact the audience. However, for the business, the difference is critical.
Partner marketing is a closer relationship between companies, which involves comarketing and coselling. On the other hand, this form of marketing is more transactional. An affiliate has a link that they share and if someone buys, then they get a percentage of the revenue. On the other hand, a partner is more likely to bring warm leads and cosell.
For comparison, under the affiliate marketing agreement, the affiliate is only paid upon the generation of revenue. An agreed percentage of each sale is given to the affiliate, once those sales have been secured.
Why the distinction? Well, this depends on the goals of your marketing campaign and the relative impact of your partner or affiliate.
As an example in the DTC industry, a company might partner with one of the largest influencers on a platform. If they have 2 million followers, the company might feel safe in the knowledge that working with that influencer will extend their reach. It’s also likely that that influencer will expect payment upfront, due to their follower number and impressions.
However, affiliate marketing works on a much smaller scale. In theory, anyone could be an affiliate as payment is only made upon the generation of a sale. A business could afford to have thousands of affiliates. Whereas, one large influencer post could cost thousands of dollars.
Whether one is better for your business than the other will be entirely dependent on your campaign goals and marketing budget.
Benefits of Affiliate Marketing
For many B2B businesses, especially in the current climate, the biggest advantage to affiliate marketing is its cost. Effectively, you don’t need to pay a penny until the sales come rolling in.
This keeps the ROI high, as you needn’t spend time or resources on generating content, paying for ads, pushing email campaigns, etc. The affiliate does all that for you, and you only need to pay once you’ve secured revenue from a sale. This is especially advantageous if your sale prices are relatively high.
Establish Your Brand
This perk is particularly beneficial for new SaaS businesses, or those that are launching a new product or solution. Inbound marketing can be time-consuming, and it can be months before you start to see the effects of the marketing foundation. Demand generation isn’t a quick strategy, albeit an important one.
Affiliate marketing effectively provides you with a ready-made reputation. Your potential buyers trust your affiliates, and thereby trust your solution under their recommendation. If you need to build your trust and authority in your industry, affiliate marketing could be the boost you need.
You have complete control over who you choose to work with as an affiliate. This means you can control the targeting of their marketing. Work with affiliates that have an audience base that aligns with your target buyers. This ensures that the leads generated could actively benefit from your solution.
This also makes affiliate marketing a great way to test buyers’ personas quickly. If your product isn’t performing under certain influencers, it’s time to take another look at your target buyer.