It's no secret that the last few years have been tough on small business owners. Since the global pandemic kicked off in 2020, small- and medium-sized business (SMBs) have had to contend with supply chain hurdles, labor shortages, and a variety of economic challenges. While the pandemic is in the rearview mirror, rapidly shifting economic conditions have made Q1 of 2023 tumultuous for entrepreneurs and SMBs.
Fortunately, SMBs can overcome these roadblocks and pursue growth using affiliate marketing. Affiliates can help buyers weigh the potential advantages of investing in new services, technologies, or products, which can lead to more sales for your brand. Let's examine the challenges many SMBs are expecting to encounter throughout 2023 and how affiliate marketing can help you navigate them.
3 Challenges Facing SMBs in 2023
There are three interconnected financial challenges predicted to negatively impact many SMBs in 2023. They are:
1. High Inflation
High inflation is diminishing SMBs purchasing power, making it difficult to buy the materials they need to stay afloat. Rampant inflation is also increasing small business owners' operating costs, eroding profit margins and threatening organizational continuity.
According to Morning Consult, 46% of SMBs classified inflation as a "major challenge" during a recent survey. Other top concerns among survey participants were committing to bigger brands, finding customers, and finding qualified employees.
2. Lower Sales
SMBs aren't the only ones being hit hard by inflation — consumers are also feeling the effects. In response to inflation, consumers are spending less on retail goods and services, according to The Real Economy.
Reduced consumer spending impacts all brands, but it can be particularly detrimental to SMBs with thin profit margins.
3. Increased Financing Costs
Not only has spending power decreased, but interest rates have also risen significantly. As such, taking out business loans, financing equipment, and engaging in other financed-based purchases costs more than it did a few years ago.
Increased financing costs can make SMBs hesitant to pursue growth opportunities, especially in light of rising inflation and decreased consumer spending.
Why Now Is the Right Time to Embrace Affiliate Marketing
Although economic conditions could be better, it's the perfect time to embrace affiliate marketing. Working with a partnership marketing firm like Acceleration Partners and investing in an affiliate program is a great way of overcoming the challenges caused by inflation and rising interest rates.
While consumers are spending less, they're still buying services and products they view as important to their quality of life. Affiliate partners can encourage your target audience to explore your products and make purchases. They can also help you connect with new leads by lending you their online influence and reach.
Although the initial investment may appear challenging, taking this leap can unlock the following major benefits for your business.
Increased Operational Efficiency
Once established, affiliate marketing programs are incredibly efficient. Your partners are paid based on performance, which incentivizes them to promote your product. A performance-based payment model also eliminates resource waste and optimizes efficiency.
After you absorb the initial investment associated with launching an affiliate marketing campaign, you'll enjoy long-term cost savings. You can spend less time and resources on volatile marketing efforts and instead focus on what you do best: serving your customers.
Launching an affiliate marketing program while other SMBs are scaling back their digital marketing efforts can help you stand out within your target market. You can gain a distinct edge that will support your growth goals long after economic volatility subsides.
While 2023 brings no shortage of economic challenges, forward-thinking small business owners can power through those hurdles and learn to thrive in the current financial environment. You can use affiliate technologies and services to increase competitiveness and scale up when other SMBs shift into survival mode.
If you're ready to seize this opportunity, begin exploring partnership marketing services and solutions that align with your business goals. By doing so, you can make 2023 your most productive year yet.