Reach Out to New Customers with an Affiliate Program
ADOTAS – As an advertiser, have you ever stopped to think about what type of customers your affiliate program produces? Do you know if you are acquiring new customers or returning customers, or are you concerned that you may be repeatedly paying for customers you have already acquired? This article investigates how affiliates can respond to specific campaign objectives, especially at competitive times of year, in spite of increasingly unpredictable online shoppers.
Valentine’s Day has recently passed and Mothers’ Day is fast approaching. Unlike Christmas, these two seasonal holidays traditionally involve the sale of a limited number of products, sold by a limited number of retailers (flowers, chocolates and fragrances, to name a few) and are almost completely unaffected by new products in the market.
Valentine’s and Mothers Day highlight two particular challenges faced by retailers, whether or not they generate high volumes of transactions during these times of year. Firstly, how can advertisers leverage these kinds of opportunities to attain new customers? Secondly, how do they turn them into loyal, repeat customers? Finally, how can advertisers of all kinds succeed in selling the same limited selection of products to the same consumers?
A common misconception among advertisers is that affiliates tend to cause them to pay for the same customer twice. This, they believe, occurs in one of two ways: Either advertisers pay affiliates for returning customers that have been acquired initially through other marketing channels, or they pay affiliates repeatedly for the same customer that has repurchased through the affiliate channel.
Does this perception tend to assume an overly simplistic model of consumer behavior, out of line with how shoppers actually make purchasing decisions, especially apparent during competitive trading periods? What needs to be challenged is the assumption that a new customer is going to become a returning customer, and that an existing customer is going to automatically become loyal.
Valentine’s Day and Mothers’ Day demonstrate the characteristics of the modern online shopper. They are likely to search in a number of different places before they decide where and what to buy. As such, their pre-purchasing activity touches on a wide range of marketing channels and activities. This is obvious at Valentine’s Day and Mothers’ Day because customers tend to know what kind of product they want and therefore conduct research to find the best deals.
It’s here that affiliates display prominent strengths. Because affiliates utilize various promotional methods, advertiser affiliate programs offers numerous opportunities to capture new customers or retain existing ones. Combined with the fact that affiliates only get paid when a sale is made, they have a vested interest in doing all they can to convert the browser to a buyer.
How can affiliates respond to these conditions to help advertisers win, or win back, customers where competition is fierce? Let’s look at three examples.
Using affiliates to obtain new customers
A well-known department store ran a seasonal campaign that they arranged to be advertised in the newsletter of one of their affiliates, a true content site with a highly-engaged and deal-conscious community of users. The retailer was pleased to find that, not only did this result in a large number of new customers as opposed to existing ones, but that these new customers were mostly men, despite the fact that traditionally their brand had appealed predominantly to women.
Using affiliates to ensure existing customers are returning customers
Cash-back affiliates offer an attractive incentive for new customers. This can work to an advertiser’s advantage when customers are first captured, but also against them when the opportunity to repurchase takes place. To counter a competitor’s offer of increased cash back to acquire their customers at the point of renewal, one insurance provider introduced a bonus cash-back rate for members taking out joint or multiple policies. The thought process was that if the customer was happy with one product, they were likely to remain with the brand for all three. While attracting new customers, this strategy helped shift focus away from cost and onto service for customers looking to renew.
Using affiliates to establish brand loyalty
The affiliate channel is a great way to access true content sites that provide authority on a subject matter they are passionate about. This is why one fashion advertiser concentrates its affiliate recruitment efforts on fashion bloggers. The best fashion blogs have a trust among their readers that cannot be easily engineered by a brand alone. This is what makes such sites and the customers they refer so valuable. They are able to create a bond between the customer and the brand that lasts beyond the first sale being made, even if the affiliate is not rewarded for successive sales.
To summarize, there is no single type of customer that affiliates can be said to produce. Success depends crucially on knowing what kind of consumers the affiliate is good at targeting, and working to their strengths, while leveraging the diversity and breadth of your affiliate base for different campaign objectives.
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