Affiliate Marketing

What is it?

Affiliate Marketing is relationship between a merchant web owner and an affiliate marketing associate. The affiliate attracts business to the merchant web owner’s site by posting links that connect potential customers to the merchant site. The merchant then pays a commission to the affiliate web site based on the amount of business generated by the affiliate site. Although the majority of affiliate marketing involves monetary exchange, it can be as simple as one site offering links to another site and that site returning the favor. This helps generate traffic for both organizations.

Once the potential customer has been connected to the merchant’s site, the responsibility is no longer in the hands of the affiliate marketing associate, but in the hands of the website owner to persuade the potential customer to make a purchase. But the affiliate will be compensated for the referral of business by way of whatever is agreed upon prior to setting up their affiliate web marketing relationship.

There are three common ways in which affiliate marketing can occur:

1) Pay per click
2) Pay per sale
3) Pay per lead

In pay per click affiliate marketing, you pay your affiliate a pre-arranged amount every time a person clicks on your product or service through the affiliate’s website. Pay per sale business presents the affiliate with a fixed amount or a percentage of the total sales that were directed to you through your affiliate’s marketing website. Pay per lead would be a percentage paid to your affiliate for every potential customer that they brought to your website for future business.

Affiliate web marketing has a structure of revenue sharing that can be extremely beneficial for the web owner and the affiliate, especially if the product or service you are promoting is in demand. Once the structure is in place, there is a minimal amount of work that needs to be implemented to maintain it. Changing your website into an affiliate marketing site will make it work for you, allowing you to generate infinite amounts of income from your daily flow of traffic into and out of your site.

Ms. Career Girl

On mscareergirl.com there is a side column that says “We Recommend”. In this area there are several companies listed. If you click on the link you will be redirected to that website. This generates traffic to these websites which can generate leads and hopefully future customers and provides a source of revenue for mscareergirl.com that is dependent on the number of users that are redirected to the other websites.
 

There are two prospective benefits to be gained from a small business utilizing affiliate marketing:


1) If the small business was the merchant, they would be gaining business with relatively low advertising costs and attracting a higher volume of potential customers than otherwise possible.

2) If the small business was the affiliate, they would be gaining a profit from the traffic they generate for the merchant’s website.









Questions:
1) How often does affiliate marketing catch your attention? In other words, do you ever click on links that take you to another site?  


2) Can you think of any reason why a company would use affiliate marketing other than receiving monetary compensation?

3) How do you think we could use affiliate marketing in our project?

4) What is a form of compensation we can offer alumni for participating in an affiliate marketing program with us? 


Resources:

• http://www.articledashboard.com/Article/Examples-of-Affiliate-Marketing-for-Beginners/549189
• http://www.mscareergirl.com/connect/
• http://www.robmcnealy.com/affiliate-marketing-basics-for-small-business/
• http://www.youtube.com/watch?v=pR1iomH6tTg
• http://www.startupnation.com/business-articles/1311/1/affiliate-marketing-basics.asp
• http://www.affilorama.com/introduction/examples-of-affiliate-sites-how-are-they-making-money
• http://www.amnavigator.com/blog/2009/08/04/affiliate-websites-types-and-examples/

Marketing through Bloggers

Why market through bloggers?
Getting bloggers to talk about your brand, gets at the true essence of Social Media. People tend to trust the crowd. Bloggers, by their own virtue of influence, make this easily possible. A smart way is to attract key influencers in your space and have them talk about you. This is the online way of influencer marketing, just getting a few prominent people to help spread the message aka word-of-mouth.

“Blogging is conversation, it’s personable, and it’s informative. Blogging is attractive because consumers (i.e., customers, clients, and patients) feel they are being told a story rather than sold a product or service; and, no one wants to be ‘sold!’ "

Being mentioned in blogs helps in viral marketing your company because most search engines take precedent to blogs in keyword search results instead of corporations or companies.

Basic Reasons for Marketing vis-à-vis Bloggers:

1. Trust: The audience reading the blog deliberate takes time to listen to their opinions and ideas. There is gives an inherent value and trust in what the Bloggers say.
2. Targeting: Finding the right niche is crucial in selling a product. When you market through a blogger associated with one’s company or interests, the market segment is built in and makes an easy way to find your target segment. Also, connecting with the blogger can help you better  understand the type of customer you attract and what they want.
3. Engagement: With the mass amounts of ads thrown at us daily, a way to actually reach the customer for more than .2 secs is by being mentioned in a blog. When people visit a blog, they want to read it and spend time on the content. Also, bloggers tend to analyze which is much more impacting than surface explanation. This engages the viewer on a completely different more concrete level, much better than mass advertising.
4. Word-of-Mouth: The chance of people talking about something they saw on a blog or was recommended to them is much more likely than the chance of someone showing an advertisement to a friend.
5. Its cheap! Advertising on a large-scale level is priceyyy....creating a relationship with a blogger? Well that’s priceless.
6. Being innovative in marketing! The idea of marketing via bloggers is still fairly new...get a head start on creating relationships with bloggers as a marketing tool early before it catches on.

How to Engage Bloggers:

Understand that as the company it is not a standard corporate pitch that is best to captive a blogger. Approach bloggers more as a customer. Explain why they would want your product and how they personally would benefit from it. Bloggers want to agree with and see the value in the company or product for their readers.

Examples:

Forever 21 Campaign with Fashion Toast’s Rumi Neely:

When the Times Square location of Forever 21 opened in June of 2010, Forever 21 teamed up with infamous fashion blogger Rumi Neely to promote the store opening.

This quote from another blogger on marketing explains the efficacy in the campaign:


“The use of bloggers, such as Rumi Neely here, is so much more personal than the use of a celebrity or model – because of the connection we have with them through their blogs. We’re genuinely interested in bloggers too because we like them for their style, not because they’re constantly being pushed in front of us. And that is making this campaign a success.”

-- Joanne Faith via http://joannefaith.com/2010/06/17/rumi-forever21/

KixandtheCity.com:

"KixandtheCity.com (KATC) is the premiere online destination for readers seeking an unbiased, un-opinionated, unique, timely, accurate, and in depth look into the products, people, events, and locations that combine to form Sneaker Culture."

Intel Visual Life The Sartorialist’s Scott Schuman:
This video follows a day in the life of premiere street style blogger, Scott Schuman. It gives you a personal recount of Schuman and connects the idea that Intel is the perfect engine for expressing one's Visual Life.

Questions:

1. What blogs do you follow?
2. Have you ever tried a product/taken interest in a company because of a blogger's mention?
3. Does anyone see a potential downfall in marketing through bloggers?
4. How can we take advantage of bloggers in our Alumni Engagement project?

Links:

http://theiqmom.wordpress.com/2011/06/16/how-to-market-with-mom-bloggers/

http://groupskie.com/blog/bloggers-blog-readers-read-connect-with-your-readers-through-blog-groups/

http://www.therisetothetop.com/davids-blog/why-spend-your-marketing-budget-with-bloggers-new-media/

Loyalty Programs/Retention Strategies

What is it?
According to Collinson Latitude, a web loyalty program provider, a Loyalty program is “the management process of identifying 'best customers' and utilising customer data and insight to create, retain and grow profitable relationships”


The idea is to create a relationship with the customer, learn what they truly want from your store, and give them benefits based on those wants. Hopefully those benefits will keep them coming back, thus creating a loyalty program.  


Three categories for a Loyalty Program:
1. Routinized

• Expected discounts based on commonly held consumer beliefs regarding the nature of economic transactions.

Examples: Grocery store loyalty cards

       Automatic cash back savings

       x % savings for the use of the retailer’s credit card.

2. Incremental/Deferred

• Does not necessarily drive true loyalty
• These programs might encourage continued patronage over time, they do not drive permanent patronage

Examples: Airline miles programs

       Travel rewards programs

       Every X meal free cards

3. Substantive

• The most effective loyalty strategies
• Drive loyalty through innovative methods of surprise and delight, as well as more general methods of making their customers lives noticeably better
• Surprise and delight is used when giving gifts of meaning and significance.

Example: Giving consumers a personal aspect to the their experience

     i.e chocolates and champagne at a hotel

Kroger

http://www.youtube.com/watch?v=bLpW8ISxu80
Kroger loyalty card program is unmatched in the industry, providing customers with savings on groceries, gasoline, general merchandise, pharmacy needs and Kroger brands. The reason they are so successful is that they use their data to give back savings to their customers. The savings speak directly to the customer trends, so the Kroger plus rewards always are relevant.
For bigger stores it is difficult to produce a unique substantive experience for cultivating loyalty. Kroger successfully uses Substantive types of loyalty by providing up to $1 off each gallon of gas. This is savings and an experience that customers don’t see very often at big chain stores, so they continue to come back.

Starbucks


1. Being Stingy With Payout  
Notoriously stingy, members need to make 15 purchases to earn 15 stars, which then gets them just one free coffee (15 transactions, not actual cup purchases)

2. Changing the Program for the Worse
Starbucks re-launched its program to the version described above, whereby the key reward is one free drink for 15 purchases, an extremely weak reward.

3. Making Redemption Very Difficult
The reward for getting 15 stars (a free drink) is distributed via mail (that’s right, mail), in the form of a coupon for a free drink. 

Other common mistakes in loyalty programs:
1. Not Rewarding the Right Behavior
2. Not Rewarding Every Purchase
3. Having Too Few Rewards Choices
4. Having Complex / Confusing Rules in Place
5. Offering Too Narrow a Rewards Earning Period
6. Pretending to Treat High Value Customers Differently
7. Not Treating High Value Customers Differently


Future of Loyalty Programs

1. Integration with Mobile
    Scanning QR codes for loyalty cards
2. Rewarding Influencers
    AHAlife
3. Encouraging Social Engagement
    PunchTab
4. Comprehensive App Integration
    Chatterfly


The goal of loyalty programs is Customer Retention!

Customer Retention is imperative to a companies success as 80% of most companies revenue comes from 20% of their customers. (The 80/20 Rule) Customer loyalty is weakened by this poor economy, so retention strategies are key.

By Implementing retention strategies properly your customers will have:


10 Best Customer Retention Strategies Proven to Increase Sales (Ron Dunne, Product-ivity):

1. Welcome the complaints you receive
2. Instigate loyalty programs
3. Send out questionnaires and surveys to existing customers
4. Check for repeat sales often to instill your company’s brand
5. Reactivate dormant customers
6. Have you scheduled a frequent communications plan to your customer base?
7. Provide exceptional customer service This one is easy!
8. Make a good first impression
9. Make courtesy top priority with all customer-facing staff
10. Do regular reviews of your loyalty programs and strategies  

And Remember: YOU GOTTA SERVE SOMEBODY!

Questions:
Have you ever experienced a small business that has some sort of loyalty program/benefit? Was it effective?
How effective do you think loyalty programs are? How loyal are you to the program you are apart of?
Do you think loyalty programs will be a growing trend in the future?
What is the best loyalty program that you have been apart of?  What are the benefits?



Resources:
http://www.collinsonlatitude.com/loyalty-marketing-definition.aspx
http://www.hartman-group.com/hartbeat/loyalty-programs-what-works-what-doesn-t
http://forteconsultancy.wordpress.com/2011/02/28/loyalty-programs-gone-wrong-%E2%80%93-ten-common-mistakes-to-avoid/
http://www.thekrogerco.com/corpnews/corpnewsinfo_pressreleases_02122010.htm
http://product-ivity.com/customer-retention-strategies/
http://bewelldogood.wordpress.com/2011/09/18/four-examples-of-innovation-in-loyalty-programs/
http://www.dreamstime.com/stock-photo-customer-retention-image17628620