The Economy and Affiliate Marketing: Should You Worry?
By Kathy Jackson
The U.S. government has finally confirmed what we already knew: the U.S. economy is in a recession. The world economy is in a recession. Homes are being repossessed at an alarming rate. Banks are failing — BIG ones! The Big Three U.S. automakers are in deep financial doo-doo. Is the sky falling on affiliate marketing, too?
How does this brick-and-mortar recession affect business in cyberspace, particularly in the world of affiliate marketing? Well, the world economy is, of course, going to have an adverse effect on the Internet retail market.
If people have less money to spend on nonessential retail merchandise in the "real" world, they have less money to spend on
nonessential retail merchandise being sold on the Internet as well.Affiliate marketers who make their living selling luxury retail
merchandise are only going to suffer. There’s no doubt about it.
But the news isn’t all bad. The sky isn’t falling. First it’s important to get a handle on the REAL facts. With good information, you CAN recession-proof your affiliate marketing business.
The news screams that unemployment could reach 10 percent, and that’s bad; but that also means that 90 percent of the workforce still has a job.
A single-digit portion of homes are being foreclosed upon; but most homeowners are making their mortgage payments. Some banks are in trouble; hardly all banks are in trouble — just the really, really greedy ones — but credit can be difficult to obtain anyway. Isn’t it fortunate that affiliate marketers don’t rely heavily on credit?
It’s always been true that when a recession occurs, some types of businesses and some people suffer greatly, while others not only survive, but thrive.
Affiliate Marketing Is, by Nature, Somewhat Recession Proof!
Here are some facts:
Those who work for manufacturers and merchants out in the brickand-mortar world can be "laid off." But you are your own
employer. You aren’t going to get laid off; you have a job
Those who own small brick-and-mortar business must depend on walk-in traffic. But as an affiliate marketer, the entire world
is your marketplace.
Your customer base is much, much larger than that of the proprietor of a small real-world business.
Out in the "real" world, rents can increase to the point that a business can no longer afford space to conduct business. But
the price of maintaining your affiliate marketing business address isn’t going to increase at all.
Fuel prices could rise high enough to make it impossible for people to drive to and from a job. But affiliate marketing is
done at home.
All of the equipment needed to conduct an affiliate marketing business is a computer, an Internet connection, a telephone
line, and electrical service. That’s it.
With just those four things and the information that you have in your own mind, you have the ability to earn a living.
For affiliate marketers, the sky is NOT falling. However, you must…
Diversify! Diversify! Diversify!
Relying entirely upon retail sales commissions could leave you in an affiliate marketing bind, because retail sales are very
likely going to decrease.
But as retail sales decrease, other sales are going to increase.
People will still spend money online. One thing that people will buy is information. What kinds of information, you ask?
-Information about money management
-Information about making money online
-Information about debt consolidation
-Information about lowering insurance costs
-Information about saving fuel
-Information about starting their own affiliate marketing business
-Information about online education opportunities
Also, businesses that have an Internet presence are still going to be paying for leads. You don’t have to make a sale to get
paid for a lead.
All your website visitor must do is complete an action (fill out a form or an application) on the vendor’s website for you to make a commission.
-Financial institutions pay for leads.
-Insurance companies pay for leads.
And hundreds of other types of businesses pay for leads. Remember this fact: When consumers "cut back" because of a
recession, they cut back on luxury items — not necessities. If your affiliate marketing business sells ONLY such items as
Playstation 3, you need to branch out and include items that people MUST have. Think food, clothing, health care, etc.
Advertise with Recession in Mind
If your advertising is focused on promoting ease of use or convenience of a product, change the focus of the advertising
and promote such advantages as:
-The payment plan offered
-The ironclad guarantee
-The long life expectancy of the product
-The way the product can SAVE money for the customer.
-Quality, quality, quality!
-Quality coupled with a low price
-Free shipping
-Overall value of the product
When consumers tighten the financial purse strings, it doesn’t mean that they aren’t going to purchase anything at all. It means that the selling points that will convince them to buy have changed.
The fact is that most people today check online before they make a purchase at a brick-and-mortar store. So, as an affiliate marketer, you get first crack at the customer. Take full advantage of that first opportunity. Hit the selling points that the customer is looking for now BECAUSE of the recession.
Continue to Advertise
The "advertising pays" admonishment of old is still viable today, even in the slowing economy…actually, ESPECIALLY in the
slowing economy!
There’s not much doubt that you are going to be tempted to cut your advertising budget to the bone. That’s a mistake that many
businesses, both online and off, make when the economy takes a downturn.
The marketing budget is usually one of the first things to be reduced when businesses begin searching for ways to cut expenses. But according to research, a marketing budget is directly proportional to a business’s gross revenue.
Basically, what all of the research tells us is that if you cut your advertising budget, you are automatically reducing your gross sales figures.
Therefore, advertising is the wrong place to cut your expenses. Find another way to cut corners. If customers can’t find you, they can’t buy from you.
Stretch Your Advertising Dollars
You shouldn’t spend less on your advertising through this recession, but you should spend your advertising dollars more wisely. You need to get the most bang for your buck!
Take a long, hard look at your ROI and determine what parts of your advertising are the most effective. Find out what advertising most often converts.
When you determine what advertising strategies are working and which are not, shift your advertising dollars to the most advantageous advertising venues.
You need to go against your first instinct. Rather than cutting your expense, but advertising budget, you need to increase it, if you can. Look at your advertising budget not as an overhead expense, but rather as an investment in your success.
Concentrate effort on boosting the effectiveness of your advertising by doing the following:
-Networking
-Offering customer incentive programs
-Offering customer loyalty programs
Should Affiliate Marketers Worry about a Worldwide Recession?
Well, I’m really good at worrying, so I hate to pass up such a good opportunity. However, I honestly do not think that as affiliate marketers we have a lot to worry about — as long as we make a plan and follow through.
But we DO need a plan.
- We must diversify. We need to represent and promote a variety of products that people NEED, rather than luxury items that they simply want
- We must change our advertising focus to necessity.
-We must keep on advertising
-We must make our advertising dollars stretch as far as they will go.
The Outlook for 2009 and Beyond
A few affiliate marketing storm clouds will gather from time to time — remember the CAN-SPAM Act and how everybody was certain it was the end of affiliate marketing as we knew it?
That turned out okay. CAN-SPAM actually helped affiliate marketers.
I have no doubt that affiliate marketers will face all sorts of "booger bears" in the coming years, but I don’t think that this recession is one of them.
In short, the sky is not falling!
In fact, I believe that this world wide recession can actually become a real BOON to affiliate marketers in 2009 — and maybe even far into the distant future.
About the Author
Kathy Jackson is a Texas rancher and a contributing author for several farm and ranch publications. She is also an experienced freelance writer of email newsletters, review copy, educational materials, and blog posts on a wide variety of topics, including many aspects of online business and affiliate marketing. Internet marketing is one of Kathy’s burning interests. You can read some of Kathy’s articles on the Affiliate . She can be Classroom Blog at http://blog.affiliateclassroom.com contacted via email at jacksokathy@gmail.com
Affiliate Marketing For Beginners
Affiliate marketing for beginners can be confusing and downright costly. But it doesn’t have to be.
Many new people to affiliate marketing don’t know how to get started so they end up jumping in to a program or system. Generally this leads to failure and they’re looking for the next quick money maker. They can spend a lot of money and time on programs that do not work. After they fail or make little money for their effort, they’re ready to proclaim to the world that affiliate marketing is a fraud and scam.
This doesn’t have to be the experience you take away from affiliate marketing. With a little patience and planning, affiliate marketing can be enjoyable and profitable. But it won’t be overnight!
Here are some mistakes I see new affiliate marketers making:
- Lack of patience: Many people come to affiliate marketing because they heard about someone who’s making $10,000 a week with affiliate marketing. They think “How hard can it be?” They soon find out it’s not as easy as it sounds. Affiliate marketing should be a long term endeavor if you want to make money with it.
- Lack of focus: I’m guilty of this myself. I’ll start one project and soon I’m distracted by another project. I love to start projects, but I’m not a strong finisher! Pick your niche and stick with it till you’re done. This includes periodic following up to make sure your project is on a long term success track.
- Lack of funds: I’d say a majority of people starting out in affiliate marketing believe they can get started wtih no money of theirs being spent. Perhaps there are a few who’ve pulled this off, but to have long term success you need to treat affiliate marketing like a brick & mortar business. Capital will help ensure your long term success!
- Lack of Knowlege: I see beginners jumping into all sorts of programs and systems that they have no idea how it works. All they can think of is all the money they are going to make! Then when they fail or go broke, they want to blame someone else. Before starting any program or system, you should thoroughly research all angles of that particular program or product. Knowledge is power!
These are just a few things I see people doing wrong. I’ve been guilty of all of them at one time or another. Hopefully through this blog I can help you from making some of the same mistakes I made when getting started!
source: http://www.affiliatewatcher.com/affiliate-marketing-for-beginners/
How to Use Your Holiday Shipping Information To Reduce Risk and Boost Your Seasonal Sales!
by Joe
Regardless of what is happening with the economy on a macro level, people are still going buy gifts this holiday season. There may be fewer dollars spent this year than in previous years, but there are still thousands of purchases waiting to be made. Now, your challenge as an SEM manager is to acquire as many of those precious sales as possible. With competition getting tighter, you need to utilize every facet of your website to enhance the user experience and build trust with your audience. Even seemingly mundane information like shipping details/information can be used as a weapon to boost your sales this holiday season.
As part of our holiday shopping blog series, I will be discussing how to use shipping information to boost your holiday sales!
One of the common roadblocks that keeps users from purchasing online is shipping. Everyone who purchases a gift online wants it to arrive safely, and more importantly, on time before the holidays. Using price points, sales and discounts, and a wide selection of products, are all great tools to peak your user’s interest. But once you have their attention you need to allay any fears/concerns about shipping.
If you have done everything right by enticing the user with the right products at the right price, don’t let the last step of the buying process be your downfall. Here are some tips to utilize your shipping information as a sales tool:
Clearly display your holiday shipping schedule. Yes, this is basic, but this is what users want to know. Since the user is already thinking about arrival time for their order (”Will get here in time?”), why not go ahead, be pro-active, and address their concerns. You can list this information on the front of your site, as well as on every product page. Clearly state, “If you place your order today, your package will arrive between these dates…”
Clearly display shipping deadlines. You can display your holiday shipping schedule, but you should also add on deadlines for purchases in order for those packages to arrive on time before the holidays. Doing this sets the proper expectation of when an order needs to be placed. And this can also give the user a sense of urgency. If they like your product, they will make an effort to meet this deadline.
Clearly display shipping costs. If you can offer free shipping during the holidays as well as a time line for delivery, that is a winning combo. However, if you can’t offer free shipping, you should set the proper expectation of how much shipping will cost before the user gets to the check out page. Since we are trying to create a sense of trust, the goal here is make sure there are no surprises when a purchase is being made.
The overarching goal of these tactics is to minimize risk for your users. When they arrive at your site you instantly want them to know that they are in the right place, that you have the right products at the right price, and that you will get their package to them on time as promised.
Remember, make sure that you use every element of your website to aide in the sales process. Nothing is mundane when it comes to convincing a user to make a purchase during the holidays (or any time of year for that matter!).
Criteria for choosing an entry-level product
Now that you’ve got a list of all kinds of possible entry-level products, it’s time to decide which ones are worth promoting. Here is the checklist of criteria I use to decide:
1. Is this a QUALITY product? This is your HIGHEST priority. If possible, purchase the product yourself to see what it’s like. At the very least, do thorough research.
Read reviews, check consumer sites like Epinions.com, or get in touch with the merchant.
Remember, if the entry-level product is poor quality, bye-bye upsell.
2. Will you get CUSTOMER INFORMATION for each sale? This is your other HIGHEST PRIORITY. You’d be surprised at how many affiliate merchants make it difficult, if not impossible, for you to know WHO bought something from you. Remember, you can’t DIRECTLY upsell customers if you can’t send them a follow up, like a thank you note or a satisfaction survey. (Note: Actually, there ARE ways to acquire customer information BEFORE a sale occurs - but that’s an advanced technique, so let’s keep it simple for now.)
3. Is this a LOW-RISK purchase? Remember, your goal is to make an initial, quick, stress-free sale - for both YOU and your CUSTOMER. Try not to offer something your customer will agonize over. Look for money-back and satisfaction guarantees. And don’t offer something that has a high potential for returns, problems, etc. In general, you’ll find that going with established merchants with big web sites, brand names, and lower-priced items means less risk - and a quicker initial sale.
4. Is the price LOW enough? The whole of idea of an “upsell system” is to offer the highest priced products LATER - not now. The more expensive the entry-level product, the tougher it will be make an initial sale - and the longer you’ll have to wait to offer a higher-priced item. I try to look for entry-level products that cost under $100. In fact, there’s nothing wrong with offering a VERY low-priced item -such as a magazine subscription - as an entry-level product, as long as you know who your customers are.
5. Can you find ways to make this product RELEVANT, USEFUL, OR EXCITING to your target market? Sometimes you find clever, cute, or cool products that you simply fall in love with. Or you’ve found a neat product related to one of your own hobbies or interests. But remember, your goal is to fill a need or solve a problem for
Researching an entry-level product
There are three basic categories of entry-level affiliate product:
• Hard goods (sporting goods, furniture, electronics, cell phones, clothing,
magazine subscriptions, toys, videos, pet supplies, etc.)
• Digital goods (anything that can be delivered via immediate download -
ebooks, software, web hosting, autoresponders, etc.)
• Services (credit repair, check cashing, loans, debt consolidation,
consulting, coaching, etc.)
Choosing the right entry-level product can take quite a bit of effort, especially if you are interested in selling information products delivered in digital format (ebooks, special reports, e-courses, etc.). This is because the quality of information products, particularly ebooks, is extremely uneven. And QUALITY must be your highest priority when choosing an entry-level product! You must also be able to pinpoint appropriate products or services to upsell to the people who buy the entry-level product. This means that while you search for an entry-level product, you must also think about your target market - WHO will
buy this product, WHY, and the potential DOLLAR VALUE of each customer.
Of course, if you happen to discover an excellent entry-level product, build a web site for it, and find that it sells extremely well, it’s not a total disaster if you don’t happen to upsell any of those customers! Far from it. You’ve probably created what is known as a successful affiliate mini-site. If that happens, congratulations! Sites like this can be wonderful little cash cows, producing income month after month for many years.
But since the big money is in your upsells - those high ticket follow up sales - you should always be thinking ahead. The good news is that there are hundreds -perhaps thousands - of ways to create exciting upsells, even for the most basic entry-level products. All it takes it a little imagination. Here is the process I use for researching and choosing an entry-level product:
First, think about WHO is actively buying high ticket items online.
If you begin by thinking about your CUSTOMER, you’ll save yourself a lot of hassles with dead-end products. The more savvy you become about who you’re selling to, the more likely you are to succeed.
So I always begin my product research by thinking about customers. The most critical question I ask myself is: Who is likely to spend hundreds of dollars ON A SINGLE TRANSACTION online?
That’s right. Even though my entry-level product is going to be a fairly low-cost item, I need to target customers who will not be afraid of my upsells! Of course, not every person in this “target market” will buy my upsells. But the potential has to be there.
I believe this is where many “niche marketing” projects fail. Just because people are searching a particular keyword online, it doesn’t mean that they are ready to spend money on products related to that keyword. They might be satisfying their curiosity, looking for free information, or researching a term paper! (If the whole “keyword” thing doesn’t make sense to you, hang on, we’ll be talking about that in Step X.)
Second, appeal to the customer base with the HIGHEST consumer potential.
For example, does it make sense to choose an entry-level product that appeals to high school kids? Let’s consider it on the basis of their consumer potential - how likely they are to purchase your backend products. What are the odds of your average teenager having $500 or more to spend on an upsell? Hmmm, probably pretty small. Take it from me, a teenager who has the discipline to hold on to $500 is probably saving that money for a car!
It might make better sense to look for products that appeal to affluent parents of teenagers. On a consumer potential basis, those affluent parents are a much better bet. So what are those affluent parents interested in? What are they concerned about? ALL parents worry about their children. And parents of teenagers have hundreds of things to worry about!
Third, look for creative spins on your target market’s problem.
It’s with the mindset of this worried, affluent parent of a teenager in mind that I would start to research products. I would do some Google searches. I wouldn’t necessarily search on “worried parents of teenagers.” I’d start by looking at some
sites oriented towards teens, families, and fun. Then I’d go to one of my favorite affiliate program providers to check out their affiliate merchants, looking around for products related to teenagers and families and fun.
Now wait -why don’t I try to find some self-help books for parents of teenagers with problems? Because my logic, imagination, and overall “gut feeling” tells me that these affluent parents of teenagers are not necessarily going to be searching online for “how do I talk to my teenager about sex?”
No, something tells me these busy, stressed, fast track parents are people with more money than time. They don’t want more therapy or advice. They want to take some sort of positive, uplifting action with their teenager. So instead of focusing on self-help products that emphasize PROBLEMS, I’m going to look for activity-oriented products that emphasize FUN.
Fourth, brainstorm backwards from your upsells!
So as I look around at possible products, I notice that the sale of sporting goods online is extremely popular. Specialty affiliate merchants like REI offer hundreds of outdoors products in all price ranges. They even offer occasional incentives to affiliates like me. And it’s clear from looking at the size of an average sale that their customers are not just ordering one pair of hiking socks for $10.
They also buy hiking boots, clothing, foul weather gear, tents, kayaks…
I wonder, could outdoor activities be a FUN solution for those affluent parents of teenagers? Skiing, hiking, mountain biking, kayaking, etc. are the sort of activities less likely to result in friction, tension, and all the other potential time bombs so common to parent-teenager relations. If I can find a simple, low-risk entry-level product that appeals to these parents, I can eventually upsell them on everything from snowshoes to luxury tents to family vacations.
Of course, I haven’t actually found the entry-level product - yet. But now I’ve gotten into the mindset of these parents. Now I know where my upsells will come from. So my search is limited only by my imagination and the marketplace.
I now know that I want to hook these parents in and eventually upsell them on outdoor family activities and related products and services. At this point I make a list of as many potential entry-level products as I can. Since I haven’t actually researched this “niche market” or these products, I have no idea whether the following possibilities are real. Maybe one of YOU will pick up this idea and run
with it!
Possible Entry-Level Products For Affluent Parents Of Teenagers:
• Books on outdoor family vacations
• Books on “extreme” outdoor sports
• Magazines like “Outdoors” or “Backpacker”
• Sports/outdoors related gifts for their teenager (a new snowboard, a gift
certificate for hiking boots, etc.)
• How-to DVDs on hiking, backpacking, kayaking, etc.
• Electronics for outdoor adventurers (handheld GPS, satellite phones, etc.)
Of course, this list is just a start. As you research possible products, be open to other ideas, including ways to narrow your target market. For example, maybe this outdoor sports idea would appeal even MORE to affluent FATHERS of teenage BOYS. Or affluent MOTHERS of teenage GIRLS.
Summary of how to research an entry-level product
• Look for a market that is actively buying high-ticket items online.
• Focus on a segment of customers with high consumer potential.
• Look for a creative spin on solving problems within that market.
• Work backwards form the upsells to your first, entry-level offer.
