Ok, so if you’ve read the last post you now understand the two basic types of purchases consumers make and the difference between customer acquisition and customer retention.
That leads us to the first affiliate sales rule:
Affiliate Sales Rule #1: Target New Brand Customers
Finding new customers is the largest potential market segment for affiliates.
Normally, new customer acquisition is an extremely expensive proposition for brands. Think about the billions of dollars spent on marketing in the US every year, or even about personal experiences where you’ve seen an ad and then made a purchase.
New customer acquisition is a brand’s way of “getting it’s foot in the door” for generating significant long-term sales from a consumer. Because it’s so important, brand’s are willing to pay through the nose for anyone who can get them a purchase from a new customer.
Brands Will Pay Significantly for New Customers
Many brands will even lose money on new sales just to have the possibility of converting a potential consumer into a habitual customer.
From an affiliate standpoint, that means that there is a tremendous opportunity. While the numbers vary greatly depending on the industry and cost of goods, it is not uncommon to find products that offer affiliate commissions of 50% or more!
This feature is especially true in the case of digital products, where the cost of goods is comparatively low, and every additional customer (after a certain sized base) is essentially extra profit. For one example, look at website hosting (which is an extremely competitive market) where companies will pay affiliate fees of $70-100 for a $5-10/month purchase!
These numbers are very different when physical products are involved, but you’ll still see a lot of opportunity for bringing a targeted consumer in the door, showing them the product, and walking them up to the cashier!
You’ll see this evidenced in programs that offer a percentage of revenue over time, giving the affiliate commissions for product sales made at a later date.