As Covid-19 disrupts “business as usual” and impacts consumer behavior around the world, companies of all shapes and sizes are discovering they must adjust their strategies in order to reach customers and capture lost in-store traffic.
Many brands have cut back on in-store and paid media spend and shifted their budgets to online channels, especially those that can drive cost-effective, measurable, bottom-of-funnel results such as affiliate marketing.
In the affiliate marketing ecosystem, brands partner with bloggers, influencers, publishers, even other brands to promote their products or services. By only paying for sales, leads, or new customers that their partners deliver, affiliate marketing allows brands to efficiently scale while optimizing their return on ad spend and cost per action (CPA).
Brands with creative and agile affiliate programs are the ones who will have loyal customers and partners long after this global crisis is over. With that in mind, here are some ways brands are adjusting their affiliate marketing strategies in the time of Covid-19.
1. Focus on in-demand product categories
Now’s the time for brands to focus on analyzing sales at the SKU level and promoting products or services that are in demand by customers. For example, shoppers are spending in double digits on food/drug, home goods, apparel and accessories, books, music, videos, and software, according to a recent survey released by Digital Commerce 360/Bizrate.
Savvy brands are also exploring categories that shoppers haven’t thought about yet, such as socks, kids’ shoes, dress tops, and tents. Walmart revealed they are selling more tops than bottoms as more people telework.
2. Liquidate aging inventory
As brands pivot their strategy to focus on what customers are buying now, some retailers are experiencing an aging inventory problem. With lower demand products sitting on shelves, it’s tying up their cash.
Affiliate marketing can help brands move their lower-demand products through strategic partnerships with affiliates who are highly effective at putting offers in front of their audience with a sense of urgency or scarcity. These campaigns can make it possible for brands to liquidate old inventory efficiently – and only pay their partners after sales on those products are generated.
For example, a leading sportswear brand with a large overstock in specific shoe sizes and styles liquidated all of the inventory on their website through their affiliate program. Their affiliate partners provided the opportunity to get stock off the books and gain new customers.
3. Offer Engaging Promotions
In this rapidly changing environment, most consumers are looking to save money and are attracted to discounts. Brands that are offering some form of an incentive that is relevant, contextual, and engaging are winning. Affiliate marketing is known for its ability to reach targeted audiences with the right offer in a way that is trackable, measureable, and aligned with the brand’s goals. Many brands are promoting free shipping codes, exclusive discount codes, flash sales, and limited-time offers through their affiliate partners to increase awareness while keeping their marketing spend in check.
For example, a brand might collaborate with a coupon partner to attract new customers by offering an exclusive discount for new customers (e.g. 20% off first clothing box purchase). Others may offer promotions on specific products for a limited time (e.g. 30% off shoes over the next 15 days). If a brand is looking to increase cart size and revenue, they can provide an exclusive code to an affiliate partner for free shipping once a certain threshold is met.
4. Build Brand Loyalty
Affiliate marketing is a highly effective channel for building customer loyalty. Many brands partner with loyalty partners, which provide consumers with a reward in exchange for a specific action such as a sale or a lead generated. There are a variety of loyalty partners; some provide cash back to consumers, contribute to a charitable organization, offer points for gift cards or ways to save for college. These partnerships help brands build loyalty with their customers and foster goodwill toward the brand.
5. Be respectful with partners
Relationships built on trust and respect are critical for successful affiliate partnerships. Pausing an affiliate program or reducing commissions in the short term can have long-lasting, negative effects on the bottom line and harm partner relationships.
If a brand finds they must pause their affiliate program or change commission rates, it’s important to show empathy and respect toward partners. Publishers understand these are unchartered times, and it can go a long way to communicate the why behind the changes and recognize the impact it has on their efforts to generate leads and sales. It’s essential to be clear with partners about what to do with their existing tracking links and provide details on the duration of the program changes.
Covid-19 will continue to change the world. As people gravitate to vital products and services, they will seek out credible brands that provide a great customer experience. By shifting marketing dollars to performance-based channels such as affiliate marketing, brands have the opportunity to manage costs, improve results, and emerge stronger than before