You’re leaving money on the table. The sad thing is you don’t even know it.
In some cases, you’re missing out on millions of dollars.
For example, take Ground Up – SS396, a previous web hosting client of mine.
Ground Up sells restoration parts for classic muscle cars like the 1970 ½ split bumper Camaro I used to own.
On the surface, the business is selling parts to fix old cars, but in reality, there’s much more to it than this.
Ground Up’s true business helping old people (mostly men) who are trying to relive their youth. Among this demographic, there’s a whole rabid culture built around automobiles.
Ground Up has a captive audience, but it can’t be an expert in everything. Nor should it be.
The business can make money just by referring its customers to other services that complement its business.
For example, I noticed Ground Up sells only OEM (original equipment manufacturer) style tires and rims. These are made to be identical to what would have been available when the cars were first released.
Ground Up doesn’t offer new-style tires and rims, which perform much better than 1970s technology.
What if you’re like me and want a restomod (an old automobile that has been upgraded to today’s improved technology)?
That’s when I thought about Tire Rack, a mail-order business that sells after-market rims and tires. Your tires can come fully mounted and balanced, and the pricing is very reasonable.
Best of all, Tire Rack offers an affiliate program through Commission Junction.
I’ve ordered from this company many times and would happily set up an affiliate program with it if I had an auto-related business.
So now, instead of completely losing restomod customers to another vendor, Ground Up can keep them engaged and recommend other products and services. This further strengthens its brand and customer relationships.
Ground Up becomes the “go-to” source of all things car-related.
But here’s another idea. After a customer restores their car, they still need to maintain it. Car aficionados love to clean and polish their cars. Why doesn’t Ground Up recommend to its existing customers cleaners, polish, and tools to keep their cars dirt-free?
All of this can be accomplished without adding more overhead or inventory. It can be done via Ground Up’s existing Facebook group and mailing list and via other communication media. It could even be during the ordering process by upselling an affiliated service.
Let me use another example that’s even closer to me. I started affiliate marketing through my web hosting business in 2002.
My hosting customers needed two things: a domain name and an SSL certificate.
I could set myself up to supply them, but that would be too expensive to do on my own.
So I opened up an affiliate relationship with OpenSRS for domain name registration and RapidSSL for SSL certificates. Combined, these two programs increased my revenue 20% and profit margins 10%.
All just by offering a link on my site. Both affiliate relationships filled the needs my customers had without sending them somewhere else.
With affiliate marketing, you can recommend businesses that complement your primary business and, in doing so, build closer relationships with your customers.
Affiliate marketing can also be an easy way to test out the market for a vertical product or service that you may want to venture into in the future. It takes minutes literally to get up and running and sell an affiliate product instead of building your own. If the idea turns out to be a bust, you can quickly move on to the next one.
Bottom line: Every business should add affiliate marketing to the mix.
With affiliate marketing, you can recommend highly regarded products and services that you’ll never offer. This will make you the “go-to” not only for what you do offer but for recommendations for what you don’t. Grow and cultivate this trust with your customers.
Affiliate marketing is simple to do, and many businesses already have programs in place. If not, ask — they might not have even thought about creating an affiliate program but would be interested in starting one.
As other online marketing methods decrease in effectiveness (*cough* ad banners *cough*), affiliate marketing can be an easy and cheap way to capture leads.
Yes, as in the case of my former site, Investor Junkie, affiliate marketing can be a business model unto itself. 100% of our revenue came from affiliate marketing. We had zero ad banners on our site, which was a conscious decision.
I would even argue that affiliate marketing is even easier for an existing business. After all, it’s already a captive audience. You can increase the LTV (lifetime value) of your customers by introducing affiliate marketing.
What affiliate relationships can you add to your business to increase your revenue? Use them to rev up your business with little overhead.