In our last post, we spoke about how to generate word of mouth marketing for your eCommerce business. Your customers’ trust recommendation from friends and family more than any ads you put out, so directing your efforts towards generating word of mouth is more profitable.
One of the strategies we discussed was setting up an affiliate marketing campaign. Ideally, customers should be raving about your store and products already, but a good affiliate program makes it much easier for them to spread the word about you.
Some companies have spent years perfecting affiliate marketing strategies, and you can learn a lot only by studying their successes and mistakes.
But what’s affiliate marketing?
Affiliate Marketing is a type of marketing in which a business rewards its affiliates via compensation for driving sales/leads.
Small businesses can use this model for marketing their products. Or affiliate marketing can earn revenue for a small business like a web publisher. Experts predict the spend on affiliate marketing could hit USD 8.2 billion by 2022.In a nutshell here are the PROs and CONs of affiliate marketing:
- Earn a passive income
- Low upfront investment needed.
- No Expertise Needed
- Can be easily scaled up
- A lot of work involved
- No guaranteed returns
- No consistent income
- Competitive field
Companies that grew through affiliate marketing
Let’s look at eleven companies that have grown on the backs of their affiliate programs.
Whether you’re a small business or large corporation, there’s hope for your affiliate program. Just ask the folks who launched programs for the following companies:
With cars in more than 63 countries around the world, Uber is officially one of the leading ride-sharing services on the planet. How has it grown so quickly? After all, it’s only been a company since 2009. If you guessed affiliate marketing, you’re correct (partly).
It wouldn’t be right to say that all of Uber’s success is contingent upon its affiliate program, but you’d be right to give it some of the credit.
In the beginning, Uber had a double-sided incentive program, with both parties getting a $10 credit when new users signed up. Since then, Uber has made the program even friendlier by offering $20 credits to both the referrer and referred. With more than 8 million users and 3 million drivers in over 700 cities, it’s safe to say that Uber is doing something right.
In the following documentary, Four Corners investigates how the company has been outfoxing regulators and outmuscling its competitors around the world.
In a span of 11 years, Airbnb went from being a company that rents 3 mattresses to a company that counts 150 million users, arranges 2 million bookings per day, and whose value is estimated at $38 billion.
Is evident that Airbnb takes its referral program very seriously. After their first attempt failed, the second system reportedly took a five-person team three months and 30,000 lines of code to develop. However, it appears to have paid off. Before the coronavirus pandemic, the company was worth an estimated $38 billion, and much of the business is indebted to the referral system that’s in place.
Their system works by giving users custom referral codes and encouraging them to share their codes with potential users by giving the referred a $25 credit. Even better, the referrer gets a $25 credit when the new user makes a qualifying reservation as a guest, and $75 more when they make a qualifying reservation as a host.
If Airbnb lost more than half of its value during the pandemic, there is a company that was skyrocketing. I’m talking about Amazon. Consumer spending on Amazon between May and July was up 60% from the same time frame last year, according to the financial data firm Facteus. The company’s extraordinary power — it has 38% of the e-commerce market.
Here is an inside look at how Amazon CEO Jeff Bezos built one of the largest and most influential economic forces in the world — and the cost of Amazon’s convenience.
Not many know that Amazon derive almost 40% of its revenue through Affiliate Marketing according to this report which is a little bit outdated being launched in 2013. SimilarWeb, an online competitive intelligence tool, attributed in 2018, 22% of traffic to Amazon.com to “Referrals.” Multiply that 22% by the estimated 2.3 billion visits, and it equates to 500 million visits per month.
Amazon’s affiliate program pays affiliate sites based on the number of people they send to Amazon, who also make purchases on the site within 24 hours. Check our complete guide on how to monetize your blog with Amazon associates.
Similar to Amazon Affiliates is the Target Affiliate Program. Target is another big business with a wide variety of products, which makes it easy for affiliates to link naturally to items within their content.
The challenge is that Target has many physical locations. So if someone sees an item on an affiliate’s page, they might choose to buy the item in-store themselves, leaving the affiliate without any commission.
However, since Target does offer free and convenient shipping (above a certain amount), many customers will opt to make their purchase right away.
Not to be outdone by Uber, Lyft also uses a referral program to incentivize existing users to attract new customers. They also started with a $10 two-sided credit, but now offer even more liberal rewards.
According to the most recent offer, referring one friend gets you a $20 credit, two friends equals a $60 referral credit and $25 bonus credits. If you refer five friends, then will amount a $100 referral credit and $50 bonus credits, and ten friends equal a $200 referral credit and $100 bonus credits.
One of the genius aspects of the Lyft referral program is that the referee is required to take their first ride before either party is rewarded. This limits the risk for Lyft and ensures that the referral is a profitable one.
Zulily offers thousands of deals daily- from up and coming brands to household names.
They have an excellent copy and a simple to follow call-to-action that makes the process of sending a referral easy and quick. Zulily breaks it down into simple steps and already has a well-crafted email waiting for the user to send.
Launched on the Web in April of 1995, Match.com helped pioneer the online dating industry and now services 24 countries and territories and hosts websites in 15 different languages.
Btw, do you know that Match Group, Inc owns and operates a global monopoly of all major online dating services including Tinder, Match.com, Meetic, OkCupid, Hinge, PlentyOfFish, Ship, and OurTime totalling over 45 global dating companies?
Match.com affiliate program allows all affiliates to earn 50% of all new subscription revenue PLUS up to an additional 50% bonus opportunity for a total of up to 100% commission. This affiliate program is optimally marketed to energetic singles looking to make a lasting social connection with others.
Bodybuilding.com is an American online retailer specialising in dietary supplements, sports supplements and bodybuilding supplements.
Bodybuilding.com grew out of wholesale-creatine.com, an online storefront created by teenage web marketer and amateur bodybuilder Ryan DeLuca in 1997. Since then the company grew exponentially in many ways, including through its affiliate program.
In 2008, DeLuca sold a controlling stake in the company for more than $100 million. Despite the acquisition happening at the start of the economic crisis, the website’s performance flourished till Amazon started to sell supplements as well.
Wix is a classic template website builder and an AI platform rolled into one. According to its owners, they have over 180 million users, both free and paid. Also, they hit 1 billion USD revenue in 2019.
The Wix Affiliate program offer their affiliates with $100 per sale to start and feature a lot of great landing pages to use in multiple languages.
Fiverr bills itself as the world’s largest digital services marketplace, with over 11 million users in 190 countries. Services offered on the site include writing, translation, graphic design, video editing and programming.
The Fiverr’s services start at US$5 and can go up to thousands of dollars with gig extras. On February 19, 2020, the company reported $107.1 million in revenue for the 2019 fiscal year.
Vered Schwarz, COO of Fiverr, explains how the company connects an extensive network of freelancers to businesses across the globe.
Fiverr has a generous commission plan, with a CPA (Cost per Action) of up to $150. Plus, there’s no referral limit, and you get lifetime attribution. Besides affiliate marketing, CPA marketing also offers you lucrative ways to promote your products and services.
We can’t end the list without adding a gambling company. That’s because casinos and betting sites are banking a lot on the benefits of the affiliate programs.
Even people who don’t visit casino sites will have heard of Bet 365. That’s because they’re one of the largest online casinos in the world, and also one of the most popular. Bet365’s reported figures to March 2018 show amounts wagered on sports at £52.56 billion, revenues of £2.86 billion and an operating profit of £660.3 million.
Affiliates get a flat 30% revenue share, unlike the sliding scale offered by other casinos.
Ready, Set, Go
You’ll never achieve growth like these eleven companies unless you try. Learn from these examples, and don’t be afraid to start an affiliate program for your company.
However, keep the lessons you’ve learned here in mind as well. There seem to be some common trends for each of these brands.
You can start your affiliate program even before you launch your eCommerce store! That way, you can get people excited about your store and launch a massive list of potential customers. Check out our guide on creating a pre-launch campaign to get started.
Do you know any other company that grew exponentially using affiliate marketing? Let us know in the comments below.