Starting and building a new company can be one of the most challenging tasks a person could ever face. The sheer size of competition among companies these days is intimidating. Thankfully the internet has become almost a level playing field for brands. Thanks to the internet, sales aren’t determined by whose store s larger or whose billboard is the biggest.
Brands can now directly target their customer base through online marketing. One of the ways that brands can get a farther reach on the internet is through affiliate programs. In this case, affiliate marketing is the term to be used. Affiliate marketing has been described as one of the best online marketing programs that are available to small business. This form of marketing has no risk involved in it. Fees are paid to affiliate marketers after results have been seen.
The Boohoo Example
A perfect example of the importance of the use of affiliate programs in establishing a brand is Boohoo. Boohoo clothing is a large e commerce site which sells its products in mainstream fashion. This e commerce site has a large affiliate program through which regular people can earn commissions by referring new customers via the Boohoo website. The Boohoo brand was started in 2006 making it about twelve years old. In twelve years Boohoo has gone from a small retail brand to large and well recognized ecommerce store.
In 2017 boohoo reported a 97% rise in its pre-tax profits making almost £31 million. A major part of the success of boohoo clothing can be attributed to the internet. Boohoo has invested in a substantial amount of affiliate programs which have driven their profits up.
Boohoo share price climbed by 4% taking this years improvement to about 35%. Majority of this growth can be attributed to boohoo’s affiliate programs that offer 7% commission for referrals and a bunch of other perks. The boohoo affiliate program has converted almost every shopper into a potential marketer. This has given boohoo stock an added advantage.
The Boohoo clothing affiliate program model is proof that affiliate programs can turn companies to brands. The brands high profile celebrity affiliations have sparked a market climb which at some point put it toe to toe with Asos.
Applying Affiliate Programs
Taking a page from the Boohoo book, upcoming e-commerce sites and entrepreneurs in general may need to consider significant investments in affiliate programs as a strategy to boost growth. However, adopting the affiliate program might be complex. Affiliate programs have to be well structured. The Boohoo clothing program clearly identifies benefits of referrals and has a proper method for tracking referrals. Anything less applied can have a disastrous effect on the reputation of a company. The inability to track and measure compensation for affiliate programs ca have an adverse effect on a company.
Before an affiliate program can be successful. It must first have a proper structure. Affiliate programs may not be particularly favorable to all company models. It is important to understand your company product and consider if its marketing will be successful with an affiliate program. More often than not affiliate programs will be helpful to the growth of an upcoming company.