Affiliate Marketing, great marketing or perceived scam?

BradleyBradley Posts: 2subscriber
edited March 2015 in Marketing
Hey everyone,

This has been a new concept introduced to me. It is actually one of the tools that we have been trying to use to get our name out there.

Affiliate Marketing is essentially paying individuals to share or sell another companies product. Usually they get paid some type of commission.

But I really wanted to get some feedback on this strategy because it seems like one of those "too good to be true" scams, but there are many companies (like Small Business Deacon) who are legitimate and using this strategy.

So Startup Nation users, what do you think about Affiliate Marketing?

Comments

  • BradleyBradley Posts: 2subscriber
    smallbusinessdeacon.com is the site we are trying to promote with this tool
  • BradleyBradley Posts: 2subscriber
    http://sbdgro.ws/ is another site of ours we are trying to promote. It's a link shortener but also a data tracker that will inform the user where everyone is accessing their link.
  • BryantHarperBryantHarper Posts: 0subscriber
    Affiliate marketing is the way to go. I've been at it for over 10 years and couldn't be happier. All you need is a good product that you believe in and some get up and go to promote it.

    There's a new course hitting the market in about 10 days from one of my mentors that will knock your socks off.

    It even has a "don for you" piece.

    Check it out here http://www.codeamber.org/commission-machine/

    And if you want access to the absoulte best sales material for affiliates check out the Swipe Vault here http://www.codeamber.org/swipe-vault/

    To your success!
    Bryant

    <blockquote><strong><a href="/community/profile/Bradley">Bradley</a> said:</strong><br />Hey everyone,

    This has been a new concept introduced to me. It is actually one of the tools that we have been trying to use to get our name out there.

    Affiliate Marketing is essentially paying individuals to share or sell another companies product. Usually they get paid some type of commission.

    But I really wanted to get some feedback on this strategy because it seems like one of those "too good to be true" scams, but there are many companies (like Small Business Deacon) who are legitimate and using this strategy.

    So Startup Nation users, what do you think about Affiliate Marketing? </blockquote><br />
  • cmarkjohnsoncmarkjohnson Posts: 0subscriber
    Great information, Bryant. To Bradley, I believe that like anything else, some affiliate programs are better than others - some outstanding and some not. The lens that I evaluate an affiliate opportunity through is: 1) Is the offer something that I love and believe in. You have to sold on the product yourself before you have enough belief to sell it to others, and 2) Does the product offering truly add real value to someone's life? If all these are true and the company behind it is legit - that's when I see it as a green light to move forward. Hope this is helpful, Bradley.
  • StartupCoachStartupCoach Posts: 0subscriber
    Bradley - Personally, I assume any product that is sold via affilate marketing to be one that is inferior, regardless if that's true or not. It seems to me that if a product is so good that people truly want it, you don't need to have your friends pressure their friends who then pressure their friends to buy the product. Also, if the company producing the product is making most of its money selling its wares to resellers (as opposed to end users), that's a bad sign. In many of these arrangements, whether it be diet products or water filters, only the top 5 to 10% of people make money, while every else takes a bath when they buy inventory and can't actually sell it.
  • BradleyBradley Posts: 2subscriber
    Hey StartUp Coach,
    What you were talking about at the end sounded more like a pyramid scam. The way our model works is our affiliates get paid a commission per member that comes on board through their reference link and since our company provides a service to our members, there is no inventory to worry about.

    what would you suggest then to a start up company trying to spread the word about the awesome services we provide and the community we are creating?

    smallbusinessdeacon.com
  • cmarkjohnsoncmarkjohnson Posts: 0subscriber
    Hey Bradley,

    I agree with you. That is MLM being described and not affiliate marketing. Pressuring friends and family is not the method of affiliate programs in my experience. I once was an affiliate for HostNine and did that for making extra money on a great hosting service that I used as a consumer. I used organic SEO to attract people and put a link in my email signature at the time.

    There are many very high quality services and/or products that offer affiliate programs. Surprisingly, one brick and mortar world-class dog training company in NY markets videos of their actual training through ClickBank. These guys are truly expert dog trainers, as seen in the way their dogs respond to their commands and the affiliate offer they had was used as a way to extend their brand and to get in-person clients for personal protection dogs as well as train the trainer classes in-person in NY at their business. This was an excellent way to increase their marketing reach and help dog owners wanting to self-train at the same time.
  • StartupCoachStartupCoach Posts: 0subscriber
    The companies I were referring were real companies that I have seen. My sister in law signed up to sell cosmetics because her friend was selling them. She was required to buy $1500 worth of inventory, and at the end of the day she only sold about $1000 worth of stuff. So no, it was not a pyramid scheme, but it was true that most sales reps never made any money. That sounds a little different than what you are trying to do.

    How to reach potential clients is the million dollar question for any budding business. I checked out your website, and it looks like you help people start businesses (as do I). If you want to spread the word about what you do, forums like this are a good start (which you obviously figured out). You good also use google adwords, which could be pricey considering that small business startup advice is a crowded market. Your website is pretty slick, so I assume you did the requisite SEO stuff, but if not, definately get that sorted out. The best SEO trick I know is blogging. I built an entire business on a blog that made it to page 1 of Google. It's time consuming but effective in the long run.

    Overall, my understanding is that building a critical mass of customers for a site like your can be an expensive proposition. To get enough people using your forum reminds me of an article I read about Match.com and Eharmony.com. Both spent MILLIONS on ad campaigns to bring in the critical mass needed to get their concepts to work.

    But to get back your original question, I personally believe that the general public is wary of the affiliate marketing model due to the example I gave earlier. It doesn't mean that it wont work, or hasnt worked for some people. I think the problem you will have is that once you recruit people to refer customers, the people you recruit will have the same issue you will have....where to find people who want to sign up. The product you offer is a niche compared with diet products or tupperware, which has a much broader audience.

    If you do try it, I would love to hear how it goes...I love the opportunity to learn just how wrong I can be sometimes!
  • cmarkjohnsoncmarkjohnson Posts: 0subscriber
    StartUpCoach,

    I have seen the practice you are talking about many times. It is called front-loading. It is seen in both direct sales and multi-level business model. In my experience, affiliate programs don't usually front-load, requiring a large inventory purchase; in fact most affiliate programs are totally free to join.
  • BradleyBradley Posts: 2subscriber
    Startup Coach,

    So far it has been a good result. We have a lot of people interested in the position. Our daily views and number of sessions have been slowly climbing. But you do bring up a good point about populating the site. One thing I think we are considering is allowing professionals to come on and use our site for no charge to add content and give us feedback. It would accomplish both fixing the potential bugs as well as getting that credibility/population we need to attract other users.
  • BradleyBradley Posts: 2subscriber
    Hey everyone,
    Our marketing seems to be working as we are getting a continuous stream of views and sessions. The Affiliate Marketing is not working as well as we would like. To help encourage visitors to sign up we dropped the price down to $5 a month. I think it will help people reconsider and want to learn more of our services. Thanks for all the help so far! Does anyone have any suggestions to decrease the bounce rate of visitors?
  • cmarkjohnsoncmarkjohnson Posts: 0subscriber
    Hi Bradley,

    Let me first tell you that I think your site is outstanding. Nothing lacking there at all. You, or someone you hired, did a fantastic job - so the reason for high bounce rate visitors is not anything to do with your site, to be sure. So what is it? Here's my take on it ...

    The question is: who is your competition? The answer, at least one competitor, is the SBA (Small Business Administration) www.sba.gov What is their cost? Free, ... so you are competing with a free service by charging a fee. I tried this to test it years ago and ran into the same thing - high bounce rate and no sign-ups, but I didn't want to discourage you from trying it, as your site is far better than mine was.

    Unless you can do something that the SBA, their free advisors, SCORE and their free advisors can't do, I believe the concept has this fundamental flaw. Now, if you could marry this service with something the SBA doesn't do, and is fee based elsewhere, and charge a lower price, you may have something that people will pay for. If people will not pay for it at all or very little, they don't perceive the value to be at that level. Then ask yourself why? Competition with a free resource, especially a giant entity like the SBA is not likely to work unless you can do something they cannot do.

    Not being negative Bradley. I commend you for an outstanding effort and a fantastic website, but I believe that you should re-think your concept, strategy, and execution based on what you have said. This is my honest assessment.
  • BradleyBradley Posts: 2subscriber
    Hey Everyone! Thank you for all your feedback and suggestions, it has really been helpful and has allowed us to really improve the service of our community. Right now we are offering one year for only 19.99. Please check it out and give us any feedback that will allow us to further enhance our members experience.
  • JLevittJLevitt Posts: 0subscriber
    A great example of someone doing affiliate marketing the right way is Pat Flynn. You can find his blog, podcast and earnings reports at SmartPassiveIncome.com.

    He's transparent and honest. Great person/site to model for affiliate marketing.
  • BradleyBradley Posts: 2subscriber
    Affiliate marketing has been a tough challenge for us. We haven't really been able to drum up the interest we wanted for our site. We have made some changes to our site (smallbusinessdeacon.com) to make it appeal to a broader audience. We decided not to heavily pursue the affiliate marketing as much because it is tough to find the right kind of employees to carry out that role. But check out our site and let me know what everyone thinks!
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