As the spread of coronavirus causes a public health crisis and potentially threatens the global economy, businesses are working quickly to stay ahead in an uncertain environment. Venture capital firm Sequoia Capital characterized the situation best in a widely-shared note to investors, saying, "Having weathered every business downturn for nearly 50 years, we've learned an important lesson--nobody ever regrets making fast and decisive adjustments to changing circumstances."
As you evaluate what changes you may need to make in order to stay nimble, you'll want to focus the budget on initiatives that drive the best possible return on investment.
When it comes to marketing, rather than investing in channels that require upfront investment, you can avoid unnecessary risk through affiliate marketing, which only requires brands to pay partners once they've achieved the desired result.
What is affiliate marketing?
Affiliate marketing (often called partner marketing) follows a simple framework. Here's how it works:
- An affiliate or "publisher" promotes your brand's products or services on their site. For example, a blogger reviews a specific brand of mattress on their blog.
- A consumer clicks the brand's promotion on the affiliate site and the potential customer is sent to your company's website through a tracking link.
- The consumer purchases a product/service from your company.
- Based on that sale or lead, your company automatically pays a previously-agreed-upon commission to the affiliate for driving the sale through the tracking platform.
The competitive advantage this channel offers is a cost per action (CPA) payment structure, as opposed to cost per click (CPC), or cost per impression (CPM). As a brand, you only have to pay for converted sales and leads--and your marketing fee is paid after the sale. Whether or not you are facing tough times or an unexpected crisis, you should always be on the lookout for incremental revenue.
Affiliate marketing offers a unique opportunity to broadcast your product to a wide variety of potential customers with this pay-for-performance pricing model. There are some programs where the affiliate also offers to promote your brand via Facebook or Google, but still only be paid for performance, which allows you to maintain exposure through social platforms without an upfront investment.
Affiliate marketing is built on transparent, trusting relationships where brands and partners set clear expectations--and don't demand upfront money for empty promises. It's a lucrative way to stay ahead of the game, maximize your ROI, and make sure you're paying for outcomes that matter.
For information about financial support available to companies hit by the coronavirus crisis, read Inc.'s Coronavirus Financial Assistance Tracker, updated daily.