How to Acquire New Customers with Affiliate Marketing

As a digital marketing professional, you are tasked with two things: acquire new customers and lower the customer acquisition cost across all channels.

In other words, grow web sales and do it better than ever.

The affiliate channel is often seen as the most efficient digital channel, not as an avenue to reduce blended costs.

But that doesn’t mean we stop finding ways to make affiliate marketing even more efficient.

Our insider secret to acquiring new customers is to secure prime affiliate real estate.

Digital Retail Example

Imagine you are a potential customer of a fashion retail Brand A.

You are researching products that Brand A sells.

Oftentimes when taking over management of affiliate programs there is no optimization happening due to lack of relationships, no budget, etc.

It is important in the affiliate channel to know that the effort given by the affiliate is proportional to the amount they get paid.

This article outlining 4 affiliate strategies to lower customer acquisition costs goes into further depth on developing commission structures that align with company goals.

Shocking, I know.

Due to the lack of relationship and budget the affiliate is not placing Brand A in prime real estate locations onsite.

So the potential customer has to search directly for Brand A in order to find them on their favorite coupon or deal site.

This will generate very low new customers, understandably.

In scenario 2, we have a well-run affiliate program, that have the relationships, secured budget, etc.

In this case, the potential customer is researching the products on their favorite affiliate site, and they come across Brand A on the home page, category page, in an email, on social media, etc.

The chances are MUCH higher that Brand A is going to acquire a new customer, assuming their offer is compelling enough to get the click / conversion.

If you are not in the position to pay for prime placement upfront (especially in a pay-for-performance channel), there are a few proven ways to secure the same placements.

By using a combination of the following methods, you can start securing the prime real estate necessary to get in front of the millions of visitors every day.

Acquire New Customers by Securing Prime Affiliate Placement

  • Relationship with the affiliate
  • Testing discount
  • Short-term commission increase
  • Exclusive / Semi-exclusive offer
  • Vanity code for big sale
  • TM+ bidding rights
  • Hybrid Flat Fee / Commission increase

Relationships Matter

When you work with affiliates on a regular basis and form a solid relationship, your emails, phone calls, and blimp messages are more likely to be answered. It is natural for us to work with the people that we like.

Often, when working regularly with affiliates, they are more willing to add you to a placement that hasn’t been sold that month.

Or, may be willing to try a few placements out at a reduced rate, in order to test. They want to have long-term relationships with their brand partners, and are willing to prove their worth.

Short-term commission rates

Short-term commission rates can be used in exchange for prime real estate when there is a revenue track record.

Basically, if you can back into a similar payout as they are asking in flat fee payments, you can offer increased commission rates for a short period of time, as a way to minimize the risk of paying for something upfront.

Now, if you are already doing really well with an affiliate, this could end up being more expensive than the media kit price. Always do your diligence when considering which payment method to choose with your affiliate partners.

Exclusive (or semi-exclusive) offers

Having a branded code displayed on site is a great way to increase conversion rates, and show that relationship to potential customers.

If the offer is compelling enough, affiliates are willing to give it more exposure without having to pay the full price.

Or, many times, commission increases are combined with exclusive coupons to secure extra exposure.

Vanity Codes for a Big Offer

The offer is the same as what everyone else sees, however the code is branded for the affiliate. This can increase conversion rates by 15-20% and affiliates see value in this.

When done properly, there is little to no risk in increasing the brand search costs.

TM+ Bidding Rights

This strategy to acquiring new customers is often used by brands that see value in adding a 3rd party voice to search results pages, or want to remove competitors or non-relevant results.

When done properly, there is little to no risk in increasing the brand search costs.

In fact, we have seen this type of relationship actually decrease the brand’s paid search costs!

The idea here, is that affiliates are allowed to spend their own money on [BRAND] plus “coupon” or similar terms.

They only get paid based on conversions, so they are VERY likely to optimize quickly to see a positive return on their investment.

As affiliates are very good at this, and often have higher quality scores than the brand itself, and are willing to provide thousands of dollars in free placements each month for the rights to participate.

Hybrid Flat Fee

Reduce the amount of flat fee spend upfront by adding a few points on the commission rate for a short period of time to make up the difference.

The methods above are going to assist in re-acquiring customers as well by offering more reasons to convert.

Whether it’s by offering a free shipping coupon, cash back, or other reward, consumers are all looking for discounts.

By utilizing technology available at most of the affiliate networks, you can incentivize, or completely stop paying, for behaviors that contribute to generating a healthy affiliate program.

Reach out to our team to learn more about driving new customers while reducing blended cost per acquisition costs.