A study by Business Insider shows that affiliate programs account for around 15 to 30% of online sales. In fact, Statista reports that in 2019, US businesses spent over 6.4 billion dollars on affiliate marketing and this figure is projected to hit a spend of $8.2 billion by 2022 – these are staggering amounts.
Why is affiliate marketing so popular?
Businesses need recurring sales. Loyal customers are helpful, but to avoid tanking, there is a need for an influx of new customers too. Affiliate marketing helps businesses get out of the start-up phase seamlessly by ushering in new customers and retaining recurring customers, at the same time.
Affiliate marketing is a proven way to increase sales and expand brand reach.
How does this happen?
When prospective customers come across content by actual people that markets products (or services), it creates a positive brand value. Buyers are more inclined to purchase a product or a service when they see it being used by people they like and follow online.
Let’s explore this in more detail:
- Affiliate programs expand brand reach through user-generated content.
Basically, user-generated content is created by people outside a business. It is natural content that promotes a brand. This works, because buyers turn to influencers or people they know for service and product referrals.
So, if you want to begin affiliate marketing, start encouraging user-generated content and then re-share them on your social media profiles to promote them further. Buffer, a leading social media management company, takes advantage of its affiliate community for helping businesses grow.
- People take affiliate marketing as instant social proof
Having affiliates serves as an instant form of social proof. BrightLocal reports that as many as 91% of people between 18 to 34 years trust reviews as much as personal recommendations.
Affiliates are perfect leverages for social proof because:
- One, they showcase the positive experiences of people who used certain products or services;
- Two, once someone signs up with affiliate signup pages, other affiliates also get attracted. This expands the audience reach and boosts sales.