Boost Your Business with Affiliate Marketing and Sponsorships

Scaling Your Business with Affiliate Marketing and Paid Sponsorships

In this episode of the Quality of Life podcast, host Erin Olson dives into paid word-of-mouth advertising methods. Erin highlights her experiences with affiliate marketing and sponsorships from her businesses, Rebel Footworks and Hay Chix. She provides detailed insights on how to implement affiliate marketing, differentiate it from network marketing, and leverage sponsorships effectively. Erin emphasizes the importance of adjusting pricing structures, ensuring alignment of values with sponsored individuals, and utilizing tools like Shopify apps for managing affiliates. Listeners are encouraged to explore affiliate programs and sponsorships to grow their businesses exponentially.

00:00 Introduction to the Quality of Life Podcast
00:20 Transforming Word of Mouth into Paid Advertising
03:06 Affiliate Marketing: A Beginner's Guide
04:22 The History and Evolution of Affiliate Marketing
05:49 Leveraging Influencer Marketing
06:43 Implementing Affiliate Programs with Shopify
07:44 Maximizing Affiliate Marketing Strategies
09:58 Exploring Sponsorship Opportunities
11:37 Lessons Learned from Sponsorships
14:50 The Patch Program: A Unique Sponsorship Strategy
17:04 Finding and Managing Affiliates
19:23 Conclusion and Final Thoughts

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Erin

Transcript

Speaker: 0:00

Hey guys and welcome back to the quality of life podcast. I'm your host, Erin Olson, and my goal is to get you from your business idea to big business. Be sure to subscribe right now and click that little bell for notifications so that you don't miss out on any of our new episodes. last week we learned all about how to transform your word of mouth into the best advertising possible and this week we are going to dial it up a notch and we are going to talk about paid word of mouth advertising. And by paid word of mouth advertising, I mean things like paid sponsorships, affiliate marketing, and some of those types of programs that are so easy to implement in your business and can help bring a whole new batch of fresh new customers to your website. Back in the day when I had Rebel Footworks, which was my hoof trimming and farrier business, I had an idea to help encourage people to tell others about me. And that was to offer them a discount if they referred several people. So if my customers referred enough people, I would give them a free trim in exchange for referring all those people. Now that is great and dandy and it helped grow my business exponentially. However, when I started growing, Hay Chix, it was a little bit different because You could only incentivize people so much before they had no more friends to tell about you. so we had to come up with another way to reach our new customers. And actually we weren't even ready for this because we had so many of our customers who actually were big names and we were so proud to be able to name drop that they were our customers to advertise for us, but we just weren't ready. And part of that problem was the fact that our pricing structure was definitely not fixed yet. We were actually losing money on some products and not making nearly enough on others. so we had to adjust our pricing. Structure just so that we could absorb anybody who wanted to be a wholesaler or a retailer and our people who were interested in, selling our products for us via affiliate marketing and sponsorships. So that is the first thing you really have to know. Now in Hay Chix, when we started having affiliate marketers, what we ended up doing was treating them just like salespeople. Since we were our only salespeople in our business, we had no idea how it really worked. And so we learned the hard way that in order to sustain payroll for people in house to do sales, you have to make quite a bit of money and you have to have really good margins. Now, once we addressed our margin issues, we ended up figuring out a way to not have to add them to payroll So we ended up using affiliate marketing with our customers that were coming to us that wanted to get rewarded for telling other people. started doing paid sponsorships. Now, I just want to let you know that if you are interested in doing paid sponsorships, the price to get into it is going to be a little more up front. But first, we're going to talk about affiliate marketing and how that can be a great way to get your foot in the door and to learn how to compensate people for telling others about you. so first and foremost, affiliate marketing is not to be confused with network marketing. Now, network marketing is like those pyramid schemes or multi level marketing, but that's what people call them with like Amway or Shackley back in the day, Young Living and a lot of these other companies where the people at the top make the most amount of money because they make money out of everybody's commission underneath them and all of the products that those people sell. We are talking about affiliate marketing. Now affiliate marketing is a lot different because affiliate marketing just pays others to talk about you, but it is completely commission based, Now commission is just business lingo where People don't get paid until they make sales for you. So as your sales go up, then you can afford to pay their commission. So it's a really easy way to get your foot in the door because if they don't make any sales for you, you don't have to pay them. Now we want to encourage our affiliate marketers to do as much advertising and make as many sales as possible because it's going to help them and it's going to help us. Now, how did affiliate marketing get started? Actually, it started right before the internet really became a thing. Back in the late eighties and early nineties, a company called PC flowers and gifts. started affiliate networking. They started paying people on radio and other spots to suggest their products in exchange for money. now by the time 1990 rolled around they had already had 2, 300 affiliates that were selling their products for them. soon as the internet came around and started gathering steam and it became a well known platform for people to sell their products, Jeff Bezos jumped in with Amazon and he actually started an affiliate marketing program called Amazon associates. And that has boomed so much. I don't know about you guys, but if you aren't one, you probably should be one. Because anybody who suggests anything on Amazon can get paid commission for suggesting that. Now with social media has become such a huge thing with the influencer population out there, people can make upwards of a hundred thousand dollars a month. Being influencer marketers, really, that is their sole job And holy crap, they can make so much money and grow businesses in the drop of a hat. just think about people like the Kardashians. Chloe just has to name drop one company and boom, they sell millions of products in hours. It's crazy. Now in your business, how does influencer marketing work Well, influencer marketing is kind of like I said, a salesperson, but you don't have to have them on payroll. So there is no need for an office. There's no need for you to have workman's comp. you just have to 1099 them at the end of the year. There is very little upfront cost, but in order to do it properly, you need to provide them with the materials and resources to sell your product in the same tone with the same messaging that you do. So a great thing to do is to have a PDF a PDF is really handy that has some of the terms that you use, stock photos that you can give them so that they can put them on their Facebook their Instagram, or even Tik TOK. That way your branding is consistent throughout. You can also give them specific terms that you use and make sure that their tone is similar to yours. Now, to get somebody to sign up as an affiliate marketer, it's really pretty easy. And Shopify, they have so many third party apps that you can use to be able to do this seamlessly. One that they have is called UpPromote and that is a great app that just folds right into your existing website. And it tracks all of the sales that your affiliates make. It also gives them a link that tags every sale made by them. And it is actually very easy. there are tons of apps that are available to manage affiliates, and it makes it so easy. So be sure to go in and look at their apps that they have available and pick the one that's right for you. Cause there are tons of different structures and pricing. The best part about most of these apps is that The fees for your implementation on your website and management processes really gets more expensive only as you make more money through these influencers and affiliates. so there are a few things in your business that you have to make sure that I alluded to earlier that you have, and one is the margins to sustain this. So as a business, I know we talked about pricing a few episodes ago, but you have to make sure that you have enough margin, which is the difference between your cost of goods and your overhead. to what you're actually selling it for to be able to sustain the percentage of what you're promising your affiliates. A great way to encourage people to market your business more is to have different levels or tiers of affiliates. Like a, gold, silver, platinum, and diamond levels, and each one of those can have their own percentages associated with them. Now, like a gold you could pay 5% and a platinum be 8%, and a diamond be 10%, and 10% would be the total of the sales, Not the shipping and tax, but the actual sales of the products and they can be actually automatically paid through this platforms at the end of the month with little to no work from you. Very handy. One thing to keep in mind is that if you are going to do affiliate marketing with these platforms, you don't have to do your whole website worth of products. You can focus strictly on certain high ticket products say you have a product that's 500 and they're at the highest tier, they could make 50 just by selling that product for you. And it's amazing what power that gives people. And eventually you can do all of your products, which is what we ended up doing at Hay Chix. And it really helps. The best thing about affiliate marketing is that they are commission based, which means you only pay them if they make sales. And if you have to pay them a lot, that means they're bringing in a lot of sales for you, which is, whoo, great, right? More sales, more money, right? And like I said, a lot of times you're going to want to supply your logos, you're going to want to supply stock photos and links and stuff like that so that they have the ability to market your products efficiently and with the same messaging and tone that you do. So another type of paid word of mouth advertising. sponsorships. Now with paid sponsorships, you're going to have a little bit more, or it could be a lot more of an upfront cost. You can have sponsorships of events, you can sponsor people, you can sponsor all kinds of things. you can start for as little as a hundred dollars sponsoring an event near you. Now, when we started back in Hay Chix, we started sponsoring different fun shows, or we would sponsor certain. Events within a show, you can sponsor venues, which would be like, say in the horse industry, you can sponsor a rodeo or a barrel race, which would be the whole event. You could sponsor the venue, which would be the rodeo grounds or the arena that it takes place. You could sponsor the prizes from the person who has the worst time all the way up to the winner of the whole thing it's kind of cool because you're only limited by your imagination. Now, we also did sponsor riders and we sponsored people that were trainers. we also sponsored products, believe it or not. And we sponsored people who had TV shows. So back around 2012 ish, I think, We sponsored a pretty large TV horseman to the tune of 40, 000. That's a lot. Now in exchange for that 40, 000, he would drop our name and our website and our products every time he did a TV show. He also did commercials with us and we were also able to use his likeness and say, Hey, This guy uses our products. You should too. Maybe not as cheesy as that, but one thing that we realized and it was a whole lot of learning in this is that that was for one year worth of sponsorship and we actually didn't have it in our contract that he was required to use our product at every event and on the road and at his home. And we realized about six months in when he started using our product. Really, he called us and said, holy crap. I just got to tell you the story about your product and how my horses picked your product over just loose hay on the ground. And that's when we knew that he was just using our product for the first time. And honestly, my heart was a little broken and it's okay because We learned so much in that situation. But one thing I want to urge you to do is to make sure that whoever you sponsor, that they are an existing customer, because if they don't use your products, You're paying for empty advertisement and I'm sorry guys, but people know no matter how good of a salesperson you are, if you do not use the product and you don't know it intimately. So just keep that in mind. If you do sponsorships. Another thing that we did at Hay Chix is we sponsored the pink buckle race, which is a really cool barrel race that actually turned into more than just a barrel. They offered roping and all kinds of things. And our sponsorship at that point was a dollar amount so that we could sponsor the whole event. But we also sponsored prizes and we sponsored a product that was free to everybody who ended up signing up. And one thing about that is that In my belief, I don't think you can out give God. And so if you give enough things to people, it's going to come back. And that's not, that was not our intention, but honestly, getting our easiest and one of our least expensive products into the hands of people to give proof of concept and to get people addicted to our products was so great because it created just a wonderful word of mouth, but it also helped get them hooked on our product. In fact, we called it our gateway drug. And if you have something that is small, that actually gets people really on your side, as far as branding, do it because I'm telling you, you can't outgive God. He will always Give you more to give Now, I was telling you earlier about another person when we were totally not ready, who wanted to be sponsored and an affiliate of ours. And she was an excellent barrel racer. And since we were in horse products, she had a very small platform to start. But honestly. We could see the potential because we knew that her marketing strategies and her, viewership was crazy. we stalked her on Facebook and we found out exactly who she was. And she had quite a few people that followed her at the time. So we ended up doing, sponsorships with her. And over time, her customer base, Exploded which then made it so that we exploded along with her She was a marketing genius and holy crap I hope she's watching because you helped us so much you taught us so much. Another thing that we did that really helped grow our business in other niches is we started something we called our patch program. Now in the rodeo and horse world, people like to have patches on their shirts, like sponsorships, NASCAR drivers, even, baseball players and stuff. They all have patches or stickers of the products they use that they're being paid for, right? Well, we had our patch program, which is where we did a contest every year and had people fill out why they should be one of our patch affiliates. And so they had to write an essay and tell us a little bit about themselves. And then we chose people to, at a smaller level, get free product and some of them would get help for entry fees. And that program grew so much that we would get thousands and thousands of applicants every year just to be sponsored by us for that year. It was crazy. gave them an affiliate link so any sales that they made through all of their marketing and word of mouth, they ended up getting a check at the end of the month. And it was so great because that also helped them. And guys, that was very little out of our pocket expense up front. And let me tell you, it worked. And those patch program people, Oh, I just love them. The one thing you have to know is that if you are going to put your name on somebody, you have to make sure that their values align with yours. you have to make sure that your messaging is consistent. you want to make sure that your values as a business come through in their marketing and their lives. after we had a few people that didn't necessarily align with our values, we ended up adopting a code of ethics so that people knew that if they were going to mention our product. In any advertising, any Facebook posts, anything, they had to make sure that the product was displayed in a specific way. They had to make sure that there was no swear words. They had to make sure that they were living our values as a company and to have an uplifting presence on the internet Because we didn't want people to cheapen our brand and our brand's values. We knew what we stood for and we wanted everybody else to know that as well. So how do you go about finding these people? Like I said you could do a contest like we did. another way you could do it is with your email list. Now I talked about the email list a few episodes ago and how to grow it. But your email list is usually going to be people who are your customers or at least very interested in your products and services. So you could easily do an email campaign discussing that people can make money selling your products and that it was at no risk. And that's a great way to get your foot in the door with affiliate marketers. You can also go and do a social media campaign. Basically, you want to find people who are interested in your products, and you can also do paid ads to find people who might be interested in your products. However, caveat, make sure that you use people who use your products and services before you pay people who don't. you can also go on to affiliate networks, Things like Rakuten and ShareSale, and those are websites that have all kinds of affiliate marketers and influencers who are looking for like minded products to supplement their online offering. But sometimes you might be required to send them product first so that they can use it to make sure that they love it before they sell it, which is actually a very cheap way to pay for people to affiliate market for you. Or if there is somebody out there that you love their presence online, you can actually DM them and just ask them if they'd be interested in taking a look at your product. Here's the thing that I would tell you, make sure that you offer no strings attached at first. send them your product or give them your service with no strings attached and then see what happens because you have to add value or you're just going to be another person in their inbox that gets moved to the bottom. with any program that you start or any existing program, you have to make sure you track, you manage, and you optimize your programs to make sure that any tweaks that are needed are made and to make sure that it is still worth the time and effort that you're putting into it. My suggestion is to take a look at all of these apps and programs quarterly, just to make sure that your return on the time and investment that you've put into them is worth it. Well guys, I hope that this helped you to see another avenue, actually two avenues to growing your business in niches that Maybe aren't your existing following. It's a great way with affiliate marketing and with paid sponsorships to get word of mouth out there in a way that is so new. Well, it may cost you a little bit more upfront. It can definitely be a game changer in your business. Well, guys, I hope this episode helped you and please be sure to like, subscribe, and hit that notification button so that you get all of our notifications. Please share this episode with anybody who is looking to get from their business idea to big business. Thank you guys so much for joining me today I'm Erin Olson, and I will see you next week on the Quality of Life podcast. See ya!