Sound Crazy? Then pay attention because you are looking at affiliate programs in the wrong light. Affiliate Marketing is the ULTIMATE business tool!! To appreciate fully the benefits of affiliate programs its crucial to understand business processes. If the only thing that mattered was getting the sale, you would go broke trying. Online Customer acquisition costs are astronomical, at up to $170 per new customer. Unless you're financed like the big boys you'll be out of business before you really get into it.
So, how can affiliate programs help your business even if you never make a sale?
Think about how business is done in the offline world: Lets say you sell gift baskets and you want to run an after Thanksgiving special on the latest gift baskets for the holiday season. You would like to see which ad copy pulls in the best results, how do you proceed?
Lets assume you want to send out your offer to 15,000 people from a mailing list. In the offline world you write your first ad copy, contact a graphic designer, and have them put your ad copy to paper. This takes about one week and costs (based on past personal experience) $2,000. Plus you've already lost one week of selling opportunity.
Say you have three headlines to test and you'd like to see which one pulls best. You can't send them all out at the same time, because you'll never be able to track which ad is bringing in the best results. So, you have to send one out one week, give it another week to see the results (although, you can never be sure which buyers purchased because of the ad and which ones didn't). Two weeks later you send out the second headline and two weeks after that the third. So, instead of sending out 15,000 all at once you've wasted 6 weeks of time!
On top of that, each direct mail piece you sent out cost at least 20 cents to as much as 33 cents to mail. That's an additional $3,000 - $4,950 in postage costs. Is this problem starting to make sense?
Summarized, here is your non affiliate program marketing campaign for the holiday season: $5,000- $6,950 in actual costs 6 weeks to test the program No way to measure results
What are your associated costs when using an affiliate program to test your ad copy?
Say you have 600 affiliates. You contact them via email (no cost) break them up into three groups, using different ad copy for each. Have them put it on their sites, in their newsletters, etc. Within 3-7 days you know the results. You know exactly what worked, who purchased, from where, at what time and from which ad! Even if nobody purchased, you now know these ads won't work and it cost you nothing, except a few days. Moreover you reached at least a hundred times more potential customers. Affiliates who sell your products have sites that are related to your own products and services, offering a greater opportunity to reach your prospective customers. On the Net, you have both the burden and the blessing of knowing how poor advertising really is. You also have the power to test headlines, test product development and ad copy at no cost to you, and in a timely manner.
Think of it this way; If you only used your affiliate program to test what you are doing in the real world, you would save thousands of dollars each time you offered a new promotion. You would also know conclusively within a few days if the promotion is working.
What do you really get with an affiliate program? The most cost effective solution for rolling out your advertising campaign, even if you never make a sale!
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