Your Guide to Affiliate Marketing

Affiliate marketing is selling someone else’s products for a commission, it’s one of the many ways you can make money online.

Affiliate marketing isn’t easy but with the right kind of audience and a strategy you can make it work. I interviewed Pat Flynn for Making Money Online last year, he consistently makes $30,000-$50,000 a month from affiliate marketing via his blog smart passive income.

An Audience

The first thing you need to be successful at affiliate marketing is an audience. Affiliate marketing works on the basis of your audience buying things you recommend, in return you get a commission.

A Large Audience

Ideally you don’t just want an audience, you want a large one. If you have an audience of 100 and you expect to have a conversion rate of 1% then you’ll only make one sale. And what if the conversion rate is 0.1%, that means it might take ten promotions to sell just one product.

A Large Buying Audience

Beyond just a large audience, you need a buying audience. A buying audience is one that likes or needs to buy things. For example a cycling blog will have an audience of people that need bikes, helmets and other accessories to allow them to pursue their passion. A blog on thrifty lifestyles will attract people who are not in the business of buying things, it’s not a buying audience.

A Large Buying Audience with Money

Finally it’s important that your large buying audience has money to spend and trusts you enough to spend it on products you recommend.

This is what Pat says about trust and recommending products “I must have used it myself, and secondly, it needs to be good. My readers trust me and I don’t want to jeopardise that”

Finding the right affiliate marketing opportunities

It’s important to find the right products and services to recommend to your audience. Amazon has an affiliate marketing system which gives you access to a huge range of products. Many individual shops run their own schemes and you can usually find these at the foot of their homepage. Clickbank is a great place to start if you’re looking for information products. Affiliate Future is a warehouse of affiliate marketing schemes where you can find the schemes of hundreds of businesses.

The figures that matter

There are three figures that are important when working out which affiliate product to promote. These are; price of product, commission and conversion.

The price of the product will affect the amount you make. A £10 product with a 5% commission makes you 50p. A £100 product with a 5% commission makes you £5.00. Price matters.

Commission rates vary, look at the commission on offer and the average price and work out how much you’re likely to make.

Conversion is the amount of sales you make. It’s shown as a percentage. One sale from a hundred is 1%, five sales from a hundred is 5%.

To work out the best opportunity you need to combine the three figures, I’ve assumed we have an audience of 100 for simplicity;

Example 1 Bike that costs £100 with a 1% conversion and 5% commssion = You make £5 from your promotion

Example 2 Bike that costs £200 with 3% conversion and 3% commission = You make £18 from your promotion

Example 3 Bike that costs £300 with 2% conversion and 1% commission = You make £6 from your promotion

The most lucrative opportunity is Example 2

You will have the price and commission information from the outset, your conversion rates you will learn through trial and error and running your affiliate marketing promotions.

Running an affiliate marketing campaign

A lot of people think that you can get away with popping up a banner or embedding a link and that’s enough. Sometimes it will be, but you’ll be a lot more successful if you remember the marketing part of affiliate marketing.

A useful strategy to use is AIDA, which stands for Attention, Interest, Desire, Action.

Let’s imagine that we’re using our blog or email list to do an affiliate marketing promotion on bike 2. It’s a new to the market, more affordable version of a very high spec bike that’s been very popular amongst those that have been able to afford it.

Affiliate Marketing Step 1

– I could mention the launch of this new bike within another blog post or email. Alternatively I could do a short news post about this exciting new development in the bike world (you can tell I’m not a cyclist, bear with me!). I am gaining the attention of my audience, sometimes the first A can stand for awareness. This email or post achieves both.

Affiliate Marketing Step 2

– I do a ‘spec’ email breaking down all the features of this bike and how nothing else like it is available at the £200 price point. I’ve gained the interest of my audience.

Affiliate Marketing Step 3

– The third touch should be aimed at creating desire. What can the bike do for the audience? Videos are great for demonstrating the benefits of products and how they will improve the buyer’s life.

Affiliate Marketing Step 4

– The final email or post is the call to action to buy. ‘Grab this fantastic bike now, it’s available at Better Bikes for 10% off – Today only’.

By doing the first three steps my audience are already aware of the product, they know what the benefits are and they have probably decided whether they want it or not. All the objections have been overcome, all that is left to do is buy the product.