Think of it this way - your website is like a post office box waiting for people to find your address and send you money. However, your address is just one out of millions of others and not everyone who finds it will be willing to send you money.
There is a special group of people who are searching for your address with money in hand ready to spend. You have to help these people find you. Getting these people to your site is generating targeted traffic. You want to get as much targeted traffic as possible without spending a lot of money on advertising. That is your challenge.
A perfect way to get free targeted traffic is to start your own affiliate program.
According to Forrester.com, affiliate programs will account for 20% of all ecommerce sales by 2005.
An affiliate program enables other marketers to promote your products for you in exchange for a commission. The most common type of affiliate program is the pay per sale program, where affiliates only get paid when they bring in sales. You can determine what percentage of the sale to pay your affiliates.
If you are not familiar with how affiliate programs work, let me explain. Each affiliate signs up for your affiliate program and is given a unique affiliate link to your website. Whenever someone clicks the link and purchases your product, the sale is automatically tracked for that affiliate link. You pay the affiliate a percentage of each sale.
To demonstrate the power of affiliate programs, consider this example:
• Your product sells for $50 and you decide to pay out 60% (you're pretty generous ;-) to your affiliates.
• You have 10 affiliates each averaging only 5 sales per week (conservative estimate).
How much will you earn at the end of the year?
Ok, at 60%, you're paying out $30 per sale in commissions and keeping $20. That's $100 per week (5 sales at $20) x 10 affiliates = $1,000 per week.
Multiply that by 52 weeks and you're cashing out at an extra $52,000 per year from the efforts of 10 affiliates making only 5 sales per week.
For your business to be successful, you only need a handful of active affiliates who are effective marketers.
Having a few motivated affiliates can cause your sales to explode overnight. There have been several occasions where I’ve gone to bed disappointed and discouraged about my sales for the day. The next day I woke up and had made $1,000 or more overnight. It can happen just that fast. All it takes is one affiliate to endorse your product to his/her opt in email list and you’ll wake up with money coming out the wazou.
Your affiliates are your bread and butter. They are your sales team that will bring in sales that you may not have gotten without them.
The mistake that many new online businesses make is they spend all of their time promoting their product and not enough time promoting their affiliate program. Think about it. If you're running a company, would it be more effective to spend 40 hours a week selling products yourself or spend 40 hours recruiting a sales team who will each spend time selling your products for you?
The most effective strategy for recruiting affiliates is to contact other marketers and create Joint Venture (JV) agreements. A typical JV that marketers agree on is an increased commission payout and a free copy of your product in exchange for endorsing and promoting the product.
The challenge is to find sites that have complimentary products and contact them with an irresistible offer. If you sell peanut butter you’ll be looking to partner with a site that sells jelly. You know that their customers will also be interested in your product. This silly example is a no-brainer but it’s a simplified version of what you should do. Contact as many potential affiliates as you can and let them know why they will make money promoting your product.
Want to really impress potential affiliates? Here are some tips:
Speak their language - know your stats related to the performance of your site.
• What’s your EPC? Total earnings divided by total unique visitors for a given period of time.
• What’s your Conversion Rate? Meaning how many click-throughs to your site does it take to make a sale? Ratio of sales to total unique visitors.
Make it easy for affiliates to promote your product by giving them promotion tools that work. Give them text ads, banner ads, email ads and any anything else that will help them generate sales.
Ron Douglas is a rising young star in the Internet Marketing world. In his book “Cracking the Internet Marketing Matrix,” you’ll learn the strategies and the tools that 14 Pros use to find and recruit affiliates. You’ll discover a strategy for closing JV deals that doesn’t involve contacting well known marketing gurus or “super affiliates.”