Skip to main content
  • Claims Center
  • Contact Us
  • Español
  • Brokers & Agents
Hiscox Insurance
Menu Toggle
  • Home
  • Small Business Insurance Toggle Menu Toggle Menu
  • Why Hiscox Toggle Menu Toggle Menu
  • Resources Toggle Menu Toggle Menu
  • Policy Management Toggle Menu Toggle Menu
  • Claims Center
  • Contact Us
  • Español
  • Brokers & Agents
  • About
  • Get a Quote Get a Quote
  • About
  • Get a Quote Get a Quote
  • Blog Home
    Start Your Business
    Grow Your Business
    Protect Your Business
    Celebrate Courage
    Search

    Twenty-Four Seven

    Sign up to get the latest small business news delivered right to your inbox.
    Grow Your Business
    Smart phone with dollar sign on the screen and with tubes protruding from it. Affiliate marketing for small business.

    Why affiliate marketing programs are good for small businesses

    Marketing | Finances
    By:
    Stephanie Casajuana

    Share Image

    Embed Image

    Copy

    Share Article:

    Don’t have a lot of capital to spend on marketing? That’s a common problem for many small businesses. It’s also a catch-22 because while you don’t have a lot of money in your marketing budget, getting your name out there is crucial to the success of your business. 

    That is why many small business owners turn to affiliate marketing programs to drum up business while keeping costs low.

    Related: How to start an online business

    What is an affiliate marketing program?

    Affiliate marketing is a strategy in which the vendor or product owner works with third-party marketers to advertise their products through various channels. However, the vendor only pays when the marketer delivers them a sale or lead. In marketing, this is known as cost per acquisition, or CPA. 

    Related: 6 Local marketing tips for small businesses

    So, how does it work? Affiliate marketers may work independently or in some cases they work for an affiliate marketing business. When you contract with them to deliver you leads or sales, they do this in a number of ways:

    1. Through blogs or review sites about your products to encourage people to buy
    2. Social media posts advertising your products
    3. Pay Per Click ads on Google
    4. SEO practices to help content written about your products rank favorably on Google.

    When the affiliate marketer gets you that lead or sale, only then do you pay them a commission. 
    Typically, you will also provide an offer, such as a coupon or discount code on your product, that the marketer can use to entice potential customers.

    How to recruit affiliate marketers

    The best place to start is with an affiliate marketing network. They will help you set commission payments based on your margins and help connect you with affiliate marketers ready to find you leads or sales. Some networks to look into are:

    • CJ Affiliate
    • ClickBank
    • Pepperjam
    • JVZoo
    • Rakuten Marketing
    • Awin

    Another way to recruit affiliate markers is by posting about it on social media. This lets marketers know that you’re creating an affiliate program and looking to partner with them. Lead them to a page on your website that provides an overview of your product so marketers can get a sense for your company and the industry you’re in.

    Structuring commission payouts 

    Although an affiliate network can help you structure your  commission,  you may want to consider basing it on the lifetime value (LTV) of a customer. If they buy from you once, are they likely to buy from you again over the years? If so, think about structuring your payout to marketers based on the overall lifetime value you place on each new customer. 

    Another good way to check if you’re offering an appropriate commission to affiliate marketers is to see what your competitors are offering. If you offer better commission rates, you will be more likely to get affiliate marketers to work with you.

    3 Reasons affiliate marketing is good for small businesses

    Big and small businesses use affiliate marketing programs -- Amazon has one of the largest. However, there are some key reasons why affiliate marketing is particularly valuable if you are a new or small business. 

    1.  Helps build your brand

    When you have a group of marketers pushing your products through video, blogging, and social media, it helps spread the word about your brand. With more content about your business out on the web, you will start to build name recognition, which is great for sales.

    2.  Cost-effective

    Affiliate marketing is extremely cost-effective because you only pay when you get a lead or sale. You could spend money running ad campaigns to test different markets, but with affiliate marketing, you’re looking at a much better ROI, which is essential for small businesses that don’t have much capital.

    3.  Easy to set up

    You could hire a marketing team from the ground up, but not only is this expensive, hiring and training takes a long time and who knows when you will start to reap the benefits by seeing more sales. Affiliate marketing programs are pretty easy to set up and require little maintenance once they get going.

    What to look out for

    Affiliate marketing isn’t a magic bullet, and there are risks. To get the most out of an affiliate marketing programs, watch out for these two things. 

    1.  Make sure you have a way to catch fraudulent sales or leads. Bad actors may try to collect on non-existent sales, so be sure you have a way to confirm that you’re only paying for actual sales (or leads, if that’s what you’re looking for.)

    2.  Don’t recruit sites that already link to you naturally. Affiliate links aren’t valuable for SEO, so don’t give up a natural link for an affiliate one. 

    Bonus: Make sure your website is optimized for sales

    A good way to support your affiliate marketing program and help ensure its success is to make sure your website is always up-to-date and has a good user experience. If a marketer sends a lead to your website, your site should be able to convert them.

    Related: How to start an online business

    For tips and advice to make your business a success, check out our Grow Your Business page.


    Protect Your Business

    Protect the business you’ve worked so hard to build. Get a fast, free quote and your business could be covered today.

    Get a Quote
    Get a Quote
    Subscribe to our newsletter

    Related Articles

    3 Min Read
    Surety bond card on desk with coffee to help you learn all you need to know about surety bonds

    What you need to know about surety bonds and whether you need one

    Management | Entrepreneur

    Here’s what you need to know about what a surety bond is and whether or not your small business needs one.

    Read More

    7 Min Read
    small business owner sitting at desk reviewing her business finances on screen.

    Small business owners offer advice on finances

    Finances | Small Business Intelligence

    We surveyed 140 small business owners to learn their thoughts about business finances. See what they had to say and gain some insights for your own business.

    Read More

    7 Min Read
    female entrepreneur works on her mobile device in office

    Useful apps that will make small business life easier

    Technology | Tools & Templates

    We’re living in a technological renaissance, to help you navigate we've researched some of the best apps for assisting in the day-to-day management of your small business operations.

    Read More


    We’re here to help.
    We provide tailored insurance for the specific risks you face, so you can take the right risks to grow your business.
    Get a Quote
    Get a Quote

    Footer menu 1

    • What We Cover
      • Business Insurance
      • General Liability Insurance
      • Professional Liability Insurance
      • Errors and Omissions
      • Cyber Security Insurance
      • Workers Compensation
      • Other Coverage
    • Who We Cover
      • Small Business Owners
      • LLC
      • Sole Proprietors
      • Entrepreneurs
      • Side Hustle
      • Contractors
      • Home Businesses
    • For Our Customers
      • Refer a Friend Program
      • Covid-19 Response
      • Claims Center
    • For Business Owners
      • Save with our Partners
    • About Hiscox
      • About Us
      • Careers
      • Contact Us
      • Hiscox Corporate
      • Investors
      • Foundation
      • Newsroom
      • We Stand Together
      • Affiliate Partner Program

    Footer menu 2

    • Accessibility
    • Site Map
    • Privacy Policy
    • Terms of Use
    • Legal Notices
    • Español

    Feefo Reviews: Hiscox rated 4.7/5 with 1,067 reviews between January 1, 2022 - January 1, 2023

    * Any cost, premium, or coverage stated before an official customer quote are estimates and an approximation and are not guaranteed. Actual cost, premium, and coverage are subject to the unique considerations of each individual risk. Customer quotes are based on the information provided to Hiscox, and are subject to required underwriting and rating factors. Until an official customer quote is provided, all communication on this website or advertisement is provided as an example for informational purposes only, and is neither an offer nor a guarantee of available premium or coverage. Any coverage afforded by the products described are subject to and governed by the terms and conditions of each policy issued. This information may not be used to modify any policy that might be issued. Any information provided to assist in understanding the coverage we offer does not modify any insurance policy, nor does it imply that any claim is covered.

    © 2023 Hiscox Inc. All rights reserved. Underwritten by Hiscox Insurance Company Inc., 30 N. LaSalle St., Suite 1760, Chicago, IL 60602. As of December 31, 2021, HICI had admitted assets of $1,250,758,353 and policyholders surplus of $332,792,666. Total liabilities were $917,965,687 (inclusive of $433,752,764 of loss reserves) and paid-up capital stock was $4,242,000.

    icon-facebook
    icon-youtube
    icon-twitter
    icon-linkedin