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Summary : Through affiliate programs, the online marketplace has also introduced a new idea: performance-based advertising.
The principles of offline advertising are equally true online: target your market, encourage customer loyalty, and address customer's needs. But through affiliate programs, the online marketplace has also introduced a new idea: performance-based advertising.
When you advertise through flyers, billboards, commercials or newspapers, it's difficult to know if your ads are really working. Short of speculative and highly inaccurate market surveys, you have no way of finding out where customers are learning about your business - and so you're forced to spend marketing dollars on a broad publicity blitz, while simply hoping for the best.
On the other hand, affiliate programs are based on commissions. Links from other sites (your affiliates) direct visitors to your storefront, and only if one of those visitors becomes a buyer do you actually pay for the referral. Since you only pay after the sale has been made, you won't spend a cent on useless advertising. And in addition to the cost-effectiveness of affiliate programs, there are several other notable advantages.
One of these is that you will probably only pay for the first sale. Clients who discover your business through an affiliate will likely visit your site directly when making future purchase - so you won't have to pay for the same customer twice. And because shoppers tend to develop loyal relationships with companies that earn their trust, the first sale is always the hardest.
Another advantage of affiliate programs is the potential for targeting. For instance, if you operate an online music store, you can establish affiliate relationships with music fan sites, band home pages, and radio stations. Because those sites' visitors are necessarily interested in music, there is good reason for you to view them as potential clients.
Finally, consider the issue of exposure. If your affiliate is already well known or trusted within your client community, then partnering with that company is an excellent branding opportunity, since visitors will bring some of that trust to their dealings with you. Moreover, if your business is being promoted by off-site affiliates, you've effectively outsourced a portion of your publicity needs - and as industry watchers are starting to realize, business decentralization works.
Sourced By: MarketingFind.com