Reasons Why Your Tech Startup Should Use Affiliate Marketing

Reasons Why Your Tech Startup Should Use Affiliate Marketing

Marketing is one of the most important business functions today. It essentially informs and attracts individuals (new prospects) about the value created by the products and services of an organization.

It’s hard to imagine an enterprise achieving any success without incorporating some form of marketing into its processes. The following stats show the percentage of organizations that use several types of marketing strategies to grow their business:

Content Marketing – More than 90% (Statista)

Social Media Marketing – 91.9% (Statista)

SEO – 61% (iMPACT)

Affiliate Marketing – More than 80% (mediakix)

Affiliate marketing, in particular, has gained immense popularity in recent years. From these stats, we can see that it is considered one of the top marketing choices for all companies. Below, we discuss what affiliate marketing is and explain the reasons why your tech startup should use affiliate marketing.

Affiliate Marketing

Affiliate marketing involves an affiliate/marketer who promotes and sells another person’s or company’s products and services. The marketer earns a commission on each sale/lead they generate. The exact payment revenue model for such marketers may differ but the most common revenue models include pay-per-click, pay-per-lead, and pay-per-sale.

Marketers employ several channels through which they run their affiliate marketing campaigns. The most used channels include blogs, social media, video streaming websites, monetized microsites, email lists, and large media websites. Each of these channels produces tremendous results for both the sellers and the marketers.

Key Benefits of Affiliate Marketing for Tech Startups

Affiliate marketing produces remarkable results for all startups and even more so in the case of tech startups. This is because most tech startups are directly involved with the internet due to the nature of their products and services.

In this case, they need to build a vibrant online presence and promote their brand to an active online user base. This can be achieved through a successful affiliate marketing campaign. Below are some of the other key benefits that tech startups can enjoy through affiliate marketing.

1. Low Startup and Management Costs

Startups have limited resources at their disposal. They must make intelligent decisions regarding their capital expenses to better allocate their resources. Affiliate marketing can easily be the best choice for business promotions as it involves low startup costs and management costs.

There are four types of expenses that you must incur to successfully launch and operate an affiliate program. These include the costs of a management tool, marketing expenses, affiliate commissions, and the overall cost of operating a website.

The website costs are usually sunk costs as most businesses already have a website and commissions are only paid after the sale is made. The marketing expenses will be borne by your affiliates as they will be marketing your products and services themselves.

The cost of the Affiliate program management tool is the only expense that you’ll be incurring, which is pretty low and highly affordable. Due to such a low front-up investment, affiliate programs have become a lucrative option for startups.

2. Establishes External Connections and Collaborations

One of the major benefits of affiliate programs is that it allows you to establish connections and collaborations with external parties. As we discussed earlier, the most popular channels that most affiliates use as personal blogs and video logs. Most such channels are operated by online influencers. From famous sportspeople to Hollywood stars, social media is filled with such influencers.

The main reason affiliate marketing is so popular among many influencers is that it provides a win-win profit to both the marketer and the startup. Such a partnership can sustain organic growth which would otherwise be difficult for both parties. In fact, the success of an affiliate program is defined by the number of partnerships that are established with external partners.

3. Generates New Leads

Generating new leads is the immediate priority for any startup and all marketing strategies and campaigns are directed to accomplish this mission. Affiliate marketing is certainly no exception to this phenomenon. Furthermore, it is sometimes considered more effective than other marketing strategies including SEO, PPC, and content marketing.

The reason behind this consideration is that in the case of affiliate marketing, multiple sources are actively and simultaneously promoting products and services. Thus, unlike other methods, this one generates leads at unprecedented rates.

Keep in mind that all marketing efforts including affiliate marketing have the same goal of increasing web traffic so that those visits ultimately turn into sales. These methods do not diminish the success rate of each other by any chance and are in fact highly compatible.

They can work together in ideal proportions so that the site generates more revenue. So, there’s no reason to pick one method and abandon another, especially if a startup has sufficient funds to test multiple marketing methods.

4. Highly Effective Marketing Strategy

Affiliate marketing is one of the most effective digital marketing strategies today and it is showing no signs of rusting.  Yes, if you look at some of the stats involving this marketing method, you’ll be left quite a surprised. According to findstack, 16% of global e-commerce sales occur because of affiliate marketing. Because of this immense effectiveness, 94% of publishers are using multiple affiliate marketing networks to boost their revenue.

These numbers prove that affiliate marketing must be launched by a startup if they wish to compete in a tough market. Neglecting such a strategy will not only result in the loss of potential revenue but also make it difficult for the startup to raise awareness of its brand.

5. Involves Less Risk

As we discussed earlier, startups have limited resources. These not only include monetary resources but also include skills and the time required to perform the task effectively. More risk is involved, if more resources are at stake as sinking costs. What most startups generally do in the case of their marketing efforts, is avoid unnecessary risk and look for a less costly option.

The likelihood and impact of the risk in the case of affiliate marketing are pretty much non-existent. We have already looked at the monetary costs involved in this method. In the case of skills and time resources, the marketers also bear these costs themselves. The startup was saved from an unforeseen threat.

Final Thoughts

Affiliate marketing is a big industry with limitless potential and full of opportunities for tech startups. It is a global sales powerhouse and is only going to flourish even further in the future. They provide a much-needed head start to startups for driving traffic onto their websites and generating a sustainable revenue stream.

It is cost-effective, risk-averse, and an exceptionally reliable marketing method. If you are just starting as a web entrepreneur, this might be the best time for you to go ahead and launch your own affiliate program.

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