Wednesday, May 17, 2006

Utilizing Affiliate Marketing to Sell B2B

Performance, or affiliate marketing, continues to be a big buzz phrase in the online marketing community. But what specific benefits can your business gain from it? Do you even have the correct type of business to pursue affiliate relationships?

Important questions to consider before you commit human and financial resources to the project.

We all know that B2B marketing is far different from traditional B2C marketing. You need to impart a different message, and you need to gain leads above all else. Consumers are initially more likely to buy on the first visit to your site if you’re selling flowers or shoes than is a company to purchase $200,000 worth of software without negotiation and discussion.

As part of your strategy in determining whether or not affiliate marketing can assist you, you need to determine the following:

What is our current cost of acquisition? Is it currently where you want it to be, or is it, like for many companies, sky rocketing out of control. If it’s currently too high, a good affiliate program could help you level it out, and bring it into the parameters that will allow you to show positive growth.

How long is your sales cycle? The traditional affiliate sales force is used to an instant turnaround for the web traffic they send your way. At the outside, most sales take place within thirty days from the initial click through. If your sales cycle ranges 2+ months and up, will affiliates be interested in promoting your brand? The answer is maybe. You could look at a per lead payout, leveraged by a sales commission at closing. There may be other opportunities as well. To say the least, though, you may encounter some resistance from the super affiliates, until they fully understand what they can gain from a relationship with you.

Will companies buy your product online? It may seem like a simple question, but unless you want an affiliate program that is intensely manual, you need your customers to click the Buy Now button. The option exists to manually add commissions for off line purchases through your traditional sales force if they were referred by an affiliate, but not only does that include work, it could also weigh against you with the super affiliates because of the increased possibility of over sights, mistakes, and even fraud. No one is going to trust you right out of the gate.

Are you willing to compensate sufficiently? The other challenge with B2B affiliate marketing is going to be a lower conversion rate than most super affiliates appreciate. If they are getting 3 sales every 100 clicks with a B2C program, they will be programmed to expect the same from you. More than likely, that’s unrealistic. So it must be made up for with strong payouts for the sales that do close, or at least a decent close payout coupled with a per lead payout. There are a couple of different ways to approach it.

With all of this being said, I want to stress that affiliate marketing is a viable sales channel for B2B. With the proper guidance, you can lower your cost of acquisition, fill your sales pipeline, and broaden your customer base dramatically.

Kevin Webster runs OPMWeb, an outsourced affiliate marketing management firm located in Rochester, NY. You can contact him through his site at
http://www.opmweb.com