Skip to content

Performance Marketing

The ideal scenario for any advertiser is to only pay when their ads are successful. That way, they can afford to invest more and more money into their campaign and not lose any money. This will give them guaranteed ROI, which will ensure their business will keep growing. That is what is meant by performance marketing.

In performance marketing, an advertiser will only pay the publisher or the marketer on a ‘performance basis’. This effectively means paying commission on sales or leads, rather than paying a flat rate.

For instance, a banner ad is not a form of performance marketing. Here, you are paying a flat fee to the publisher who owns the website regardless of whether they get a lot of clicks on that ad or not. That means that you can end up losing money if the ad appeals to the wrong audience and is not properly targeted to the buyer persona – or if the publisher takes advantage of the set-up.

On the other hand, we do consider something like affiliate marketing to be an example of performance marketing. That’s because you are paying on a commission basis. The publisher/marketer will now only earn money for the sales that they refer to your website. And because of this, you don’t lose any money if the ads are not successful!

Affiliate Marketing Explained

Affiliate marketing is an ideal option for internet marketers on both sides of the equation. If you own a website, then promoting other products is an ideal option.

Looking for a way to earn money online that will carry minimum risk, require minimum up-front investment and generally be suitable as an option for anyone to start earning a healthy profit? Then you should definitely consider affiliate marketing.

Affiliate marketing is in many ways the ‘perfect business model’. This is an easy method to earn money that literally anyone can try and can potentially be infinitely scalable. It’s far more profitable compared with AdSense and it has far less risk or difficulty compared with selling your own product.

So what’s the catch? Actually, in this case, there really isn’t one. This is a rare example of a business model that is literally ideal for you as the marketer. Let’s take a look at how it works and why this is possible…

If you’re already in the world of digital marketing, then you’ll likely have a good idea of what affiliate marketing means. For everyone else, this is essentially a form of marketing where you are selling a product that you did not create. In that way, being an affiliate is very much like being a door-to-door salesman who earns commission on a product. The only difference is that you aren’t going door-to-door: you’re letting billions of people from all around the world come to you.

And what’s more, is that you have a nearly limitless supply of different products to choose from.

So essentially, you pick a product from a digital content creator of business that has an affiliate scheme. This means that said product is offering commission on sales and the precise value of that commission will vary depending on the type of product you choose and the nature of the deal. In some cases, you can earn 75% of the profit or more, meaning that you’re actually keeping the lion’s share of the cash!

Why would a product creator be happy to give away 75%? The answer is that they want to attract as many affiliates as possible. They’re already selling their product themselves and they’re making 100% profit from those sales. Anything extra that you sell for them then is a bonus on top of that. And if the more affiliates like you they get to sell their products, the more they can increase their sales – effectively creating a legion of professional marketers to help them make money.

So, by offering good commission, product creators can attract more affiliates. That means more sales, more brand recognition and more money!

And that also means more money for you! This really is a win-win situation and it’s what makes affiliate marketing so effective!

Other Forms of Performance Marketing
Otherwise, different forms of performance marketing include things like CPA. CPA is ‘Cost Per Action’ meaning that you are only paying each time a particular action is carried out. No longer do you pay monthly for an ad and no longer do you pay for clicks that might amount to dead ends. Instead, you only pay if someone actually subscribes to your mailing list, or if someone actually buys your product.

There are CPA networks around the web, all of which provide this option – but you can also use CPA via Facebook ads. In that way, you’re making Facebook perform for you!

Of course one of the great benefits of any form of performance marketing is that it incentivizes the marketers working with you to do their best work and to try harder – rather than to stagnate. Their success becomes yours and vice versa.

Fulcrum Resources-Tip: You can also encourage this in other ways. For instance, you can offer bonuses for your partners that are performing particularly well, or even run competitions for the people that are helping you to promote your goods.
More Ways to Make More Money From an Existing Digital or Physical Product
Very often, performance marketing techniques such as affiliate marketing can be used as a way to gain extra money from an existing digital or physical product.

After you have reached the point where you’ve sold to all the regular visitors to your site, how do you bring in more sales? Simple: you expand and let others start selling your product too.

But actually, this is just one way to increase sales for an existing digital OR physical product. Here are some more considerations…

If you want to grow and expand your business then that means earning more money so that you have more to invest back into your company. That in turn somewhat necessitates a windfall of some sort: either some kind of massive success with regards to what you’re selling, or perhaps some outside help in the form of an investment or a purchase.

But what if neither of these things come and you still want to grow your company? Are waiting for lightning to strike, or begging for support the only options available to you?

Of course not. If you want to expand your business by growing your profits then there are lots of options available that you can use right now and that don’t need a miracle to work. Let’s take a look at how that might work, and at how you can get more blood out of this particular stone.

Automation and Scale
One option of course is to increase your output to increase your turnover – perhaps by automating more of your workflow so that you can complete more work and make more sales. For instance if you are currently producing products using a manual assembly line, then you could start using digital manufacturing instead in order to make more products that you can then sell in more stores. Even if you perform a service, you may find that some aspects of that service can be automated with the use of the right software. Or perhaps they can be outsourced cheaply?

Alternatively, you can simply increase efficiency to once again reduce overheads. This is another benefit of automating your production, but there are other ways you can achieve the same effect – by using a more efficient design for instance, or by being more energy efficient in your office. To increase efficiency you really only need to use financial management software and then work out where the ‘leak’ in your cash flow lies.

Diversifying, Bundling and More
Another option is to alter your product so that it appeals to a wider audience, or so that you can charge more for it. One way to do this is through ‘bundling’, which essentially means combining several of your products into a single ‘package’ which you can then sell at a slightly decreased price. Likewise if you currently sell a package, then consider selling aspects of that package individually so that you can appeal to a wider audience.

If you want to charge more for your package deal on the other hand then you can always make it into a gift set. If you sell cosmetic products for instance, then you could package these together with a ribbon and find that people are willing to pay much more for this nice gift than they would have done otherwise.

This works for digital products too. Got a lot of different ebooks? Then combine them together as a big package!

You can also try taking your existing product and offering it to a slightly different market. Ask yourself which markets might be willing to pay more for products, and then how you could potentially make your offering more appealing to that group. With a little imagination you can come up with a unique proposition that will face minimal competition as well.

And once you’ve tried all this, then you can start sharing your profits via performance marketing.

Open chat
Scan the code
Can we help you?