The Power of Influence: How Affiliates Increase Sales

The Power of Influence: How Affiliates Increase Sales

You’ve got the products that people want, and you’ve hired the best writers to describe them. You’ve built a website that looks spectacular, and you’ve connected it with all of the most popular social media services. So, why aren’t people flocking to buy your products?

No truly successful online business handles all of its promotion independently. Many business hire PR firms, but PR firms are expensive — and they can’t even guarantee results. Do you know what type of online promotion actually is a sure thing, though? It’s affiliate marketing. Since launching an affiliate program costs almost nothing, you can only benefit — and the benefits are often enormous.

The Power of Influence

Why do companies pay celebrities to endorse their products? Celebrities earn endorsement money because they influence others. Many people will at least consider buying the products that their favorite celebrities claim to enjoy.

The concept of celebrity endorsement has carried over to the Internet in a big way — with a big difference. Today, there are a great many “celebrities” whose spheres of influence are much smaller than those of film and television stars. Nevertheless, within those spheres, the “celebrities” of YouTube, Instagram and Twitter have great influence.

Consider YouTube user Jaclyn Hill. If you don’t watch makeup tutorials online, you might not be familiar with Hill’s work. If you are one of her 3.5 million YouTube subscribers, though, you want to emulate what you see in her videos. You also know that she dutifully lists every product that she uses in the description area of each video. Now, why would she do that? The answer begins with an explanation of what affiliate marketing is.

What Is Affiliate Marketing?

Amazon was perhaps the first company to launch an affiliate program with long-term success. Since Amazon launched with such a large inventory of books, it was difficult for customers to discover products unless they already knew what they were looking for. Amazon’s affiliate program made it possible for someone to recommend and link to products. If a potential customer clicked a link and bought a product, the person who created the link received a bounty.

Many people looked at the Amazon Associates Program and thought, “Why would I market to my friends and risk alienating them for a $1.00 share of their next book purchase?” However, entrepreneurs looked at the program and realized that the real way to earn money was to market Amazon to the entire Internet — and modern affiliate marketing was born. Since Amazon’s affiliate program was one of only a few with the potential for high payouts, many entrepreneurs built businesses focused almost exclusively on advertising Amazon’s products.

Amazon’s affiliate program has been running for approximately 20 years at the time of writing, and Amazon’s affiliate links claim approximately 4.6 percent of the entire online advertising market. Amazon created the model that virtually all other online affiliate programs attempt to emulate: seek out people with the power to influence others and share profits with them when they generate sales.

Modern Affiliate Marketing

We return now to the subject of Jaclyn Hill. Most of her videos are step-by-step guides explaining how to achieve certain looks using cosmetics. Many of Hill’s videos include links to Sephora, a popular cosmetics retailer. Sephora offers a commission rate of 5 percent on all sales that affiliates refer.

Now, affiliates never share the details of their earnings with others. Would you want anyone to copy your business model if it works? A popular Jaclyn Hill video tends to receive about 1.5 million views, though. Let’s suppose that one percent of her viewers click a Sephora link. Of those, five percent purchase goods worth at least $100. That’s $75,000 of revenue for Sephora — and $3,750 in affiliate commissions — for recording a single video.

As a business owner, you often don’t need to do much to promote your affiliate program. Professional marketers will find you if you have a unique product and attractive affiliate terms — it’s what they do.

Recent Success Stories for Merchants

Look no further than prominent selfie snapper Kim Kardashian for another example of how someone with influence can spur product sales. The LuMee is a smartphone case with integrated lights that brightly illuminates the face for more appealing selfies. Entrepreneur Allan Shoemake began marketing the LuMee in September 2014. By May 2015, he had sold just 4,500 units and was ecstatic about the fact that his company was “six to seven months” from profitability.

Then, something happened. Kim Kardashian was spotted using the LuMee case at the 2015 Grammy awards. Overnight, everyone wanted to buy the phone case that made Kardashian’s selfies look so perfect. In January 2016, LuMee and Kardashian formed a partnership — and then things really began to take off. During 2016, LuMee’s Web traffic soared, improving the company’s worldwide ranking on Alexa from nearly 1 million to 193,846 at the time of writing. Starting from almost no traffic at the beginning of the year, LuMee.com now receives an estimated 73,800 visitors each month.

Conclusion

Realistically, not every company can hope to attract free celebrity endorsement. However, the fact is that every profitable affiliate marketer is a “celebrity” of sorts because building a following is necessary for success. Even if a YouTube user has 10,000 followers rather than 3.5 million, he or she is a celebrity to those 10,000 followers. An affiliate marketer’s goal is to influence as many others as possible — because that’s how affiliate marketers make money. That’s why your business needs an affiliate program — because a good affiliate marketer is better than any in-house salesperson.



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