Under normal market conditions, businesses are wary about wasting marketing dollars or overinvesting in unproven marketing channels. In the current climate, organisations in nearly every vertical are tightening their wallets and taking extra precautions to minimise resource waste.
While global personal consumption expenditures have started to rise since January of 2022, fears of a looming recession have made business leaders more cautious than ever.
No decision-maker wants to be responsible for throwing their organisation's marketing dollars down the drain by pursuing channels that don't provide fruitful performance. However, businesses can't continue to stick with their existing channels that have become stagnant, especially in our ultra-competitive modern marketplace.
Fortunately, there's a way that businesses can test the performance of other marketing channels without stretching their advertising budgets too thin. The answer lies in affiliate marketing. Here's what you need to know about this important strategy and why you should be implementing it.
Why affiliate marketing?
Most brands know that affiliate marketing is a powerful tool for driving quality sales, acquiring new customers, and generating high-value leads. But many don't realise that it's also excellent for testing the performance of other marketing channels.
The affiliate model is unique from other marketing strategies due to its payout model. Whereas other marketing channels function on a pay-per-click or pay-per-lead model, affiliate marketing often leverages a cost-per-action model. In other words, brands don't incur costs unless their affiliates deliver on a previously agreed-up action.
The cost-per-action payment model makes affiliate marketing the ideal tool for testing new marketing channels, especially in times of economic uncertainty. Budget-conscious decision-makers can explore numerous channels, assess the viability of each, then identify which options best suit their organisations.
What brands would benefit most from this tactic?
Just about any brand in any vertical can use affiliate marketing to test out other marketing channels.
Emerging businesses, large brands, or mid-sized entities can all transform affiliate marketing into a useful testing tool. An organisation needs only some reliable partners and a moderate amount of brand awareness to leverage affiliate marketing.
However, while most industries could benefit from affiliate marketing, retail businesses tend to perform the best when using this tactic. This is likely due to two factors:
- Retail products, especially smaller ticket items, tend to have a very short consideration phase. Examples include sports and outdoor equipment, clothing and apparel, and home goods. Larger ticket items like appliances and mattresses can also have a short consideration phase under the right circumstances.
- Additionally, affiliate marketers in the retail space can use the brand names of the products they're advertising. When an affiliate showcases a well-known product, they'll have a much easier time developing trust among consumers and generating sales.
Which channels can marketers test with their affiliate programmes?
The simple answer is "any channel you want." Your organisation can use affiliate partnerships to try out a wide range of channels, including search, email, retargeting, customer-based integrations and more.
If you aren't already using a marketing channel to build your brand and want to assess its viability, connect with an affiliate and begin attempting to generate performance through that cost-effective medium. If it works, you can then build out a full-fledged campaign and to continue to see how the channel performs.
Not sure which channel to try first? We suggest setting your sights on retargeting, as this strategy has risen to prominence in recent years and can be an excellent addition to your marketing mix. The basic premise of retargeting is quite straightforward — you're trying to get your brand in front of potential customers after they've left your site.
Retargeting is great for improving conversion rates among first-time buyers and enhancing the lifetime value of existing customers by keeping your brand top-of-mind.
How to start testing new marketing channels with affiliates
Getting started with affiliate testing couldn't be easier. First, decide what channels you want to explore and then get in touch with an experienced partnership marketing agency that can help you find the right affiliate partners to test with. You never know — you may just stumble upon a powerful growth catalyst that can take your business to the next level.
At Acceleration Partners, our team can assist with everything from scaling your affiliate and influencer networks to developing a winning strategy for your business.