Affiliate marketing is a great way to make money online. Many legitimate businesses, like Orbitz, make their money through performance marketing, also known as affiliate marketing. Affiliate marketing’s dark secret has to do with the nature of doing business and how some “gurus” on YouTube portray performance marketing.

The Dark Secret.

Now, this is it. This is the secret about affiliate marketing. Affiliate marketing or performance marketing is all about customer acquisition. Which is simply getting new customers. It sounds easy, but it’s expensive and requires a lot of work. Invesp conducted a survey that found customer acquisition to be 5 times more expensive than customer retention. Also, Invesp’s survey found that the success rate at selling to a new customer was 5%-20% while the success rate was 60%-70% for existing customers.

This means as an affiliate marketer you’re taking on all the risk and doing the heavy lifting to get new customers. Especially when running ads.

Let me explain.

When it comes to what a business sells you can usually break it up into two categories. The Front-end and the Back-end. Many times affiliates promote the frontend offers with upsells and down sells but are left out of the backend offers.

Why does that matter?

It matters because of the competition affiliate marketers are up against. The business model of making money on the front end leaves an affiliate marketer at a huge disadvantage.

Here’s an example:

Let’s say you’re an affiliate marketer and the offer you are promoting sells for $80 and has an average one-time commission of $40. So you need to make a commission before you spend $40 on ads.

While your competition sells a similar offer at the same price of $80 but they’re willing to break even or even lose money on the front end. So they can spend $80 on ads to make a sale.

In this example, your competition can outspend you on ads and get to paying customers before you. Leaving you to pick up the scraps, hopefully making a profit on the frontend commission.

What’s the solution?

There are a few ways Affiliate Marketers get around this.

The first is content marketing. This can be a website like a blog that relays on search engine optimization to generate traffic to an offer. Social media platforms like YouTube, Instagram, Tiktok, Twitter, and Pinterest are also great ways to generate traffic to your offers.

Content marketing works because it’s cheap to make content but it cost time.

The second is list building. Most of the time when someone talks about list building they’re referring to email marketing. Basically, you create a list of contact information so you can maintain contact with people. This can be a list of names and phone numbers, emails, or friend lists on Facebook.

List building allows you to create an asset that can be used over and over again to make sales and earn commissions.

The third solution is to promote continuity offers that offer recurring commissions. Instead of promoting an offer with a one-time commission look for offers with recurring commissions. This will allow you to break even on the front end or even lose money but still make a profit as time goes by.

Conclusion

Affiliate Marketing’s dark secret is fixable. Though it may take some creativity. What I have learned through experience is that doing all three of these solutions gives you the best results.

Here’s what I do. I run ads to an offer and capture an email at the same time. Then I send the content from my social media accounts to build repour. (My social media accounts are also generating traffic.) Then give them an offer. Obviously, this is a simplified explanation but you get the idea.

Now the solutions I offered are not the only ones available and there is no guarantee that they will work for you. Always do your research.