How Affiliate Marketing Is Helping Direct-to-Consumer Brands Grow in the Stay-Home Economy

How Affiliate Marketing Is Helping Direct-to-Consumer Brands Grow in the Stay-Home Economy

Many brands who sell directly to consumers (DTC) are suddenly experiencing increased demand for their products and services as people are faced with changing their shopping behavior. As consumers embrace the idea of “couch commerce,” searching for discounts and products that can be delivered directly to their doorstep, brands must also adjust their marketing approach to reach those consumers effectively and efficiently.

At the same time, brands with DTC and subscription-based models are scrutinizing their marketing budgets to ensure they are spending in areas that are both prudent and offer a strong return on investment.

For many of these brands, affiliate marketing’s pay-for-performance model is what’s helping them address these needs and concerns. Here are five ways brands are using their affiliate programs in the rise of the stay-home economy:

 

1. Attract New Customers.

Although affiliate marketing is highly effective in helping drive conversions for brands – be those sales or high-value leads – affiliate is also a powerful channel for helping brands bring awareness of their products and services to consumers. Too often affiliate is perceived only as the “closer” within the buyer journey, but on the contrary, there are endless opportunities to introduce brands to new segments of consumers, while also functioning on a pay-per-performance model, making it a win-win for brands looking to cut costs.

For example, many direct-to-consumer and subscription-based brands work with content partners within their affiliate programs to get the attention of consumers who might be unfamiliar with their brand and offerings. These content partners could be bloggers, influencers, product review sites – even large mass media publications. Some content sites can be general interest sites, others focus on a specific niche.

To attract new customers for brands, content partners tend to leverage sponsored posts, emails, banner advertising and more to promote brands to their audience as well as social media channels such as YouTube, Facebook, Instagram and Pinterest.

Because these partners focus on creating content that educates and informs, they tend to have highly engaged audiences and can be extremely influential in a consumer’s decision to purchase. Often, these content, product review and mass media sites have strong SEO authority and rank highly on keywords that are likened to a brands’ product or services, and in turn, open brands up to a new segment of shoppers.

 

2. Offer Consumers Exclusive or Limited-Time Promotions.

Regardless of what’s happening in the economy, most consumers want to save money; DTC brands that are offering some form of an incentive to convert are winning. Many DTC and subscription-based brands provide their affiliate partners with exclusive or limited-time promotional codes to share with their audiences.

For example, to attract new customers, the brand might collaborate with a coupon partner to offer an exclusive discount (e.g. 50% off first meal kit delivery) to new customers only. Others might offer a promotion on certain products for a limited time (e.g. 30% off yoga mats over the next 30 days). Additionally, if a brand is focused on increasing cart size to boost revenue, brands can provide an exclusive code to affiliate partner that offers free shipping once a certain cart size is meant.

Working with select coupon partners in strategic ways also helps prevent various offer sites from posting all types of discounts and promotions of your products or services that may be off-brand or invalid.

The affiliate marketing model has long been valued for its ability to get the right offer in front of the right target audience and do so in ways that are trackable, measurable and aligned with brands’ goals and objectives.

 

3. Curtail Marketing Costs.

In the affiliate marketing model, brands only pay for marketing that generates a desired action. Those actions are driven by their affiliate partners, be they content-focused, a school, an influencer, a coupon site or even another brand.

Because all partner activity is tracked and measured within the affiliate model, brands only spend their marketing dollars after results are generated—results are defined by the brand. As brands look to reduce overall spend in today’s economic climate, more and more brands are moving other more traditional marketing channels into the affiliate model. For instance, due to sophisticated technology partners that now play within the affiliate space, brands can run shopping cart abandonment and upsell campaigns via affiliate. Moreover, there are also opportunities to run display, social and PPC search, all via an affiliate model.

In turn, the cost per action (CPA) compensation structure helps brands keep their marketing costs in check.

 

4. Build Brand Loyalty.

Affiliate marketing is one of the most effective channels for helping brands build loyalty with consumers and strengthen the lifetime value of their customers. One way many DTC and subscription-based brands do this is by working with loyalty partners with their affiliate program.

Loyalty partners, which could be a site, app or company, incentivizes consumers with some type of reward in exchange for a desired action. Most of the time this action is based on a sale. However, the incentive can be also given on actions like a free trial, sign up, a form fill, or even numerous steps within the client’s customer funnel.

For example, there are loyalty partners that offer cash back to consumers, points for things like gift cards or a special offer and even ways to save for your kid’s college education or contribute to a charitable organization. These are all things that help brands build loyalty with their customers and foster feelings of goodwill toward your brand.

Direct-to-consumer and subscription-based brands also leverage their loyalty partners to help them move customers down the purchase funnel. For example, if a brand has a free trial for their subscription-based product or service, they can not only reward consumers for signing up for the free trial, but the brand is also able to retarget those consumers that their affiliate partners attracted and convert them into a paying subscriber.

To learn more about how brands work with loyalty partners within their affiliate programs, check out this short Outperform podcast episode.

 

5. Track and Measure Performance.

A brand’s ability to track and measure the performance of their marketing has never been more critical. Brands who don’t know whether their marketing is actually driving desired outcomes are essentially wasting their marketing dollars.

This is where affiliate technology providers play an essential role.

Affiliate technology providers act as an intermediary between brands and their affiliate partners. They handle the tracking and reporting of affiliates’ activities and automatically pay out commissions to these partners based on the rules set by the brand.

Particularly at this time, all brands, not just those with direct-to-consumer and subscription-based business models are being especially careful about how they’re paying their partners and on what actions. Many are also having to make strategic decisions such as pausing campaigns with some partners and ramping-up initiatives with others.

Affiliate technology helps make all that possible at scale.

 

There are a number of brands in wide-ranging industries whose products and services can add value to people’s lives while they are confined to their homes or who are on the front lines helping those afflicted with COVID-19. The affiliate marketing model is helping many of these brands efficiently and cost-effectively reach these individuals and connect them with the resources they want and need.

 

Amelia Glynn is an Account Director at Acceleration Partners