Affiliate marketing

Affiliate marketing is a route to market for your small business.  Put simply, you sell digitally through a partner. Affiliate marketing is a process where a small business attracts customers by rewarding some third parties, known as affiliates, for marketing their goods and services, and/or for driving traffic to their website. It feeds your digital marketing funnel by driving potential customers to your website or social media, or it markets and sells products on your behalf.

Affiliate example – Amazon.com

Develop your own affiliate program

A straightforward example from the corporate world, would be that of Amazon. If you have a website about hunting and fishing, and you attract and retain many visitors who associate themselves with these hobbies, you can become an Amazon affiliate.  Amazon is the merchant. You are the affiliate.

What would this entail?  You would need to go to Amazon’s website and sign as an affiliate.  Then you can search for the books and other products which are suitable for the hunting and fishing fraternity.  Having selected suitable products, and here is the clever part, you cut the relevant code from Amazon’s website and paste it into your own pages.  Then it will look as if you have a series of products to sell to your visitors, in the same colours and livery as your own pages.  However, once the customer decides to buy the products, he or she is rerouted to Amazon’s own website.  They take payment from the customer and supply the goods; you, as the affiliate, will receive a commission.  Other than that, you do not participate in any part of order fulfilment.  This is a simple affiliate process.

Promoting and advertising your start-up

There are many tools and techniques that will be useful to you when communicating with the outside world.  Think about these tools as another type of mix, let us call it the promotions mix!  Again, you will balance and blend these approaches to suit your business’ needs best.

Ask yourself ‘why?’ are you trying to communicate with your customers, and what are you trying to say?  The whole purpose behind promoting your small business is to persuade your customers that your product or service has value to them, and more importantly to build long-term relationships with customers.  How you do this is down to you.

There will be some trial and error, and unfortunately you may invest in some promotions which deliver less than you invest.  You will learn from your mistakes and develop effective promotional tools that suit you and your customers best.

Which promotions work best for you?

How do you select the best approach?  There are a number of factors that you need to take into account when selecting the best way to promote your products or services.  Let’s take a look at a few of them:

Cost.  Of course if you have bottomless pockets you can do plenty of promotion.  Therefore, you need to look at what are expected returns based upon your communications.  Don’t overspend!  Look for ways that you can get your messages across by spending as little as possible. That’s just good business.

Your target market.  The promotional tool that you select should be the most suitable one for your target market.  For example, if you have a local business, then the local advertising will be better; that would include local newspapers, local Pay-Per-Click (PPC) advertising, local billboards, local sponsorship, and any approach which will directly hit your potential customers.

Availability of communications.  Not all promotional tools will be available to you.  Their may not be a local radio station in your area for example.  A particular keyword in relation to Pay-Per-Click may be too expensive simply because your competitors are willing to pay more for it. More on this later.

Look for innovation.  Always think to yourself, how can I get some really effective marketing promotion by spending as little as possible?  It might be as simple as sponsoring a local junior football team.  You could send some very targeted e-mails to opinion leaders in your area that might have an interest in your product or service, and they might blog about your product.  It is the role of the small businessperson or entrepreneur to look for ways of networking and maximising big bangs for small bucks.

Offline tools for promoting your small business

  • Personal selling
  • Sales promotion
  • Advertising
  • Public relations
  • Trade fairs and exhibitions
  • Sponsorship

With all small businesses personal selling is likely to be an underpinning marketing tool.  Personal selling will be used for every stage of the marketing process for your product or services, from the early days when you are sounding-out others about your new ideas, right up until the product is withdrawn and replaced by new one.

Don’t be afraid of personal selling!  Anyone can learn it, and there are many tools and techniques that can be used to make sure that you get to a sale.  Let’s have a look at a typical personal selling process that you can use today to sell your product or services to your customers.

The idea is that you match the benefits of your product, service or solution to the specific needs of your customers, and remember that you want to build a long-standing relationship.  That might mean that you do not sell today, but you sell many products and services in the future as you nurture the relationship and maintain a dialogue with your clients.

Value Proposition Canvas

Value Proposition Canvas

Let’s investigate the Value Proposition Canvas: a business tool that can help you create, design and implement value propositions. It is a tool which is used by tutors, trainers and business start-ups to look at the ‘fit’ between customers and our products/services. It is used as a bolt-on to the Business Model Canvas, and credit it given here to its creators Ostwalder, Pigneur, Bermarda and Smith  – and Strategyser. It is part of the Lean Start-up Movement. So how does it work?

 

The Value Proposition Canvas

Value proposition canvas has two sides: the customer segment who you intend to create value for and the value proposition which will help you attract customers. The canvas draws a parallel between products and services offered and customer needs. With the customer profile you clarify your customer understanding with value map you describe how you intend to create value for that customer. You achieve fit between the two when one meets the other.
The profile is composed of customer jobs your customers are trying to complete, related pains that picture the negative aspects they may face while trying to complete it and third the gains that show the positive outcomes which your customers may have.

Customer jobs involve functional, social, personal and supporting factors. Customer pains revolve around undesired outcomes, obstacles and risks that can be faced. Customer gains can be classified into required gains, expected gains, desired gains and unexpected gains. Care must be taken to identify the importance of customer jobs, level of severity of pains and relevance of gains obtained.

Now let’s look at the value proposition map that describes the features of a specific value proposition in your model in a more structured and detailed way. It breaks your value proposition down into products and services, pain relievers and gain creators.

Products and services can be tangible, intangible, digital, financial etc. Pain relievers describe how your services and products can soften the specific pains your customers face and gain creators how customers can benefit from your company products and services.

Thus, when the features of your value proposition map perfectly match the characteristics of your customer profile you achieve the fit. Fit can be achieved in three stages:

  1. First when you identify relevant customer pains, jobs and gains to address them with your value proposition.
  2. Second stage presupposes a positive customer feedback and the last stage is about finding a profitable business model.

So, do you feel like having a go at your own Lean Start-up? Begin by completing the Business Model Canvas, and then consider the fit between your products and services using the Value Proposition Canvas.