The ins and outs of affiliate marketing

Before we discuss affiliate marketing I would like us to consider one of the older forms of promotions known as word-of-mouth. Put out a good word about something and the belief is people are bound to come try it out. This is a timeless marketing strategy which is still very much effective and is closely linked to affiliate marketing. In fact I like to think of it as a modern twist on an age old game.

Consider affiliate marketing as word-of-mouth in overdrive. Instead of relying on what people may say, it works by actually paying people to put in a good word. What many business owners often want to know is whether this will really work. Rewarding affiliates may not come cheaply but it will certainly bring in leads.

How it Works
Generally this type of marketing is patterned after revenue sharing or commissions. People are paid a certain amount or given rewards for every client that they bring in. Instead of working to find extra clients yourself you can just rely on the affiliates to do this for you. How they achieve this is entirely up to them. Many bring on positive reviews and articles about the company or product. Others build up the reputation through word- of-mouth. In the end you pay a small amount for each potential client.

Pros of Affiliate Marketing

1. Low Cost. One of the biggest benefits of this is that you do not need to invest a huge amount of money initially to get things up and running. In fact, very little capital is needed. This type of marketing scheme is fashioned in a sense that if there is no outcome then you don’t pay a cent. In short you pay your affiliates for results.
2. Easy to Do. There is no having to endure the stress of usual marketing schemes. With this process you set things up once and it moves on its own. Basically your affiliates do all the leg work for you. All you need to do is compensate them once they are able to successfully bring in clients.
3. Reaches a Broad Market. Most marketing strategies limit you to your local area or country. If you want to reach a larger clientele then you will have to invest more. With affiliate marketing you can reach a huge market globally with almost no initial expense. Most affiliate marketing occurs online and reaches a wide audience.

Cons of Affiliate Marketing

1. Inconsistency. You cannot control the amount of clients that come. There may be times when affiliates are able to bring in many clients, while there may be times when business is slow. If you rely on affiliate marketing alone then it can create an unreliable cash flow. Always consider it as an additional form of marketing which is not completely stable by itself.
2. Verifying Leads. There are some affiliates who can rake in a lot of potential customers. You are likely to pay a large amount for this. This can be good if all those leads that are brought in will surely do business with you. However, you cannot guarantee the percentage which will actually put the money where their mouth is.