Affiliate Marketing: The Confusing, Powerful System of External Sales Reps

When most people think of affiliate marketing they think about skeevy Internet marketing products. Many of these products have a small army of affiliates running various micro-sites such as the ones that mask themselves as unbiased product reviews. Not cool. Because we have a strong (usually negative) opinion about these type of tactics, we mark them down in our brains as the most noteworthy examples of this marketing channel. In reality, this is pretty far from the truth.

The Truth About Affiliate Marketing

  The vast majority of affiliates market other peoples’ products to you without YOU even realizing they’re doing it. They either look like normal ads or they appear to be someone else’s products, and you never think twice about it. In the few cases where you DO recognize that a product might be an affiliate promotion, it often seems to fit as a compliment to the core offering of the person or brand you’re following. And once again, you don’t think twice about it. We don’t remember these positive scenarios when we hear the term “affiliate marketing” because they don’t stir up any high-arousal emotions within us. They just come off as your typical, everyday, acceptable forms of marketing. And as a result they don’t register as something worth remembering. Which can be a good thing, and means you’re doing affiliate marketing right. But we’re getting ahead of ourselves. Let’s back up first.

Affiliate Marketing: Sales Reps You Don’t Hire

  In a nutshell, an “affiliate” is essentially an external sales rep. If you were to become an affiliate for my product, I would typically pay you a fee for every product of mine that you sell to your (or any) customers. That’s it. Plain and simple. This engine can actually help you scale quite a bit. For example, if you’ve saturated another marketing channel (i.e. hit a brick wall) or you’ve reached a ceiling in the performance you’re able to derive from your internal digital marketing efforts. (Though a common mistake is starting to use affiliate marketing too early, and paying a fee higher than the cost to market to customers internally.) Ever go on your favorite blog and see a widget box showcasing a recommended product on Amazon? More than likely if you click the box, go to Amazon, and buy that product (or any other) – the owner of your favorite blog will get a cut of your purchase. That’s affiliate marketing. And that blog owner is an affiliate marketer. But many of us assume affiliate marketing only takes place on smaller websites pushing Amazon products, or Internet marketers pushing digital products for other Internet marketers. This is only a fraction of what affiliate marketing actually is.

An Affiliate Marketing Use Case

  Take the Southwest Airlines VISA Card. Patrons of Southwest Airlines know the value they’re getting from the airline. They pay Southwest to travel to and from destinations because of the things they do differently from other airlines (e.g. open seating, customer service, bags fly free, no change fees, etc.). Because of this, Southwest has grown into a very large, popular brand. (Rightfully so. Baggage fees are the worst.) VISA recognized this. Concurrently, they realized that their own marketing for a normal, everyday VISA card could only take them so far. However, if they brought on other brands as affiliates to market their cards as well, the sky would be the limit. (Pun intended.) Not only would VISA gain a portion of the revenue from the sale of those cards, but they would also drive some serious customer loyalty as card users would drum up free “miles” they could use on flights. So VISA pitched those brands on selling their own branded VISA cards that they could then market to their own customers. In this way, VISA made Southwest an affiliate. Every time you sign up for a Southwest Airlines VISA Card, you’re now a VISA user. Southwest gets some great benefits from it, but at the end of the day, VISA is leveraging Southwest’s audience to promote their own product.

Is Affiliate Marketing Technically Viral Marketing?

  If we’re currently trying to find non-viral means to ignite virality, why are we talking about something that looks blatantly like viral marketing? (Note: We’re currently on #12 of our 16 Ways to Feed Your Viral Engine with Non-Viral Marketing Sources.) I’ve fielded this question before, and it’s a valid one. It usually goes something like:

“Company A is asking company B to join their affiliate program, and then company B exposes company A to their customers for an incentive. Isn’t this just viral incentive marketing?”

Great question, and I’m glad you’re thinking about things in this way. But NO. This would not be viral incentive marketing. If it were, you could likely make the argument that all advertising is technically viral incentive marketing, which it isn’t.

Affiliate Marketing and Virality

  There is one, and only one, difference between affiliate marketing and viral incentive marketing:

• The promoter of the product is NOT a user who signed up to derive core value, then recognized the viral value and began sending invites.

An easier way to look at it is the way a virus spreads. (Gross, but true.) One person is exposed to the virus from somebody else who has the virus. They then become infected themselves, and expose others. Both, at one time, were normal people who came into contact with a carrier of the virus. But because of those interactions they each became a carrier of the virus as well. Southwest Airlines wasn’t simply a VISA user that saw so much value in VISA that they decided to invite their network. It was a dynamically different process involving many hours or purposeful negotiation, planning, engineering, and promotion – which is why we categorize the two channels differently. All that being said, something that IS worth considering is the fact that an affiliate program itself can be seen as its own product. Which means it can spread virally if it’s engineered correctly.

Engineering Virality Using Affiliations

  Here’s an example of how one could use affiliate marketing to fuel their viral engine. Many great affiliate programs have “tiers” of affiliates. This means that if Company A starts an affiliate program, and Company B joins – Company B would get “Tier 1” incentives from promoting Company A directly to consumers. Additionally, if Company B recruits Company C as an affiliate of Company A as well, Company B would get “Tier 2” incentives for every sale that Company C makes for Company A. Of course, Company C would still get the same “Tier 1” incentives. With an affiliate marketing program structure like this, one could theoretically engineer many forms of viral marketing in addition to viral incentive marketing. I’ll leave the possibilities up to you!

What’s Next

  Not every form of marketing works with every type of product. That’s why it is so important to know what your options are and pick the ones that fit best with your business. Which brings us conveniently to our next non-viral marketing tactic – niche search.