With Affiliate Summit West 2014 underway, we thought we’d use this week’s E-commerce Eye Candy to delve into a topic related to affiliate marketing.
This infographic from The Ambassador Blog makes the case for independent software vendors to consider the costs and benefits of investing in affiliate marketing or referral marketing programs.
On one side of the graphic we have affiliate marketers. These are the professional publishers helping their trusting audience find the right product that suits their needs. Wondering which is the best antivirus software for you? Check out MajorGeeks or CNET’s download portal. These authoritative resources help their audience find the right product and earn money for each successful conversion. They have skin in the game, so to speak, and a significant interest in keeping their customers happy.
On the other side of the graphic we have referral marketers. These are your family, friends and professional acquaintances who are happy to direct you to their favorite products. As with your professional affiliate marketing partners, it’s in a merchant’s best interest to reward these referrers in some way, like a discount on future payments for example.
Now most software companies depend on their effective affiliate networks. But an important statistic to keep in mind comes from the Wharton School of Business. They published a study that says that referrals have a higher life time value than sales from other channels.
Referral marketing programs can also be more cost effective than affiliate marketing. Another academic report out of the University of Chicago says that non-cash reward programs are even more effective at obtaining referral sales than cash based ones.
However, high-tier affiliate networks reach much larger audiences than your typical Facebook friends list. Developing a close-working, mutually-beneficial relationship with trusted affiliate programs and blogs can boost sales significantly.
In the end, it’s all about offering a great product that people, both professional affiliate publishers and close family networks, are proud to offer their audience.