2.3 Decide on Resources & Risk
Now that you are aware of your strengths and opportunities, it is time to decide on the resources you are willing to invest.
The most valuable resource available to affiliates is their time. We already discussed in section 2.1 of this series how important it is to distinguish between committing time regularly versus in blocks. Your campaigns need to reflect your investment behavior.
However, you will not be surprised to hear that it's not only relevant how routinely you invest your time, but also how much of it. Let's look into some examples.
- 1.Creating videos or other visual content will take longer than to send out written tweets.
- 2.Preparing daily price comparisons for certain regions will take longer than to recycle old ones.
Your strategy should reflect the investment you want to make on a daily basis. Sometimes the same message can be conveyed more effectively via a short tweet and there may be no need to enliven it with visuals.
On the other hand, if you want to set up an email list with daily deals, you won't be able to satisfy your target group with recycled and out-dated samples.
Sure - you will likely come up with better results when investing more of your time. But don't be afraid of choosing a less demanding path if it better fits your time management.
A common mistake is to choose a strategy that demands more time than you are able to invest.
Sometimes it is not obvious whether an element is worth the additional effort, but you will not know for certain before doing sustained testing. Having a simplified and advanced version of your strategy can provide you with flexibility until you find out.
Think about scalability to aid with time constraints. The best strategies are those that can be replicated with little effort.
The second valuable resource is money. Financial investment can greatly enhance your chances for success. Indeed it is a requirement for a number of strategies.
One of the final tasks before deciding on your path is to think about how much you are willing to invest financially, because this will either have a limiting or enhancing impact on the strategy you choose.
A common thought process is the following:
"Let's see how it goes and I will decide on the financials later."
If this is what goes through your mind, bare with us. That thought will become relevant in the chapter below, which also marks the final consideration before you can finally decide on your strategy!
In this section we want you to focus on the upper limit you would consider investing. Ask yourself the following question:
What financial resources am I willing to invest in the best case scenario? A scenario in which my campaign works as intended and all that's left is scaling.
The answer to this question will be another important guide when planning your affiliate career. It will help you aim for the right targets.
Don't aim for methods that require too much capital, as this could jeopardize your efforts. At the same time it may limit your potential to ignore financial resources completely. Find a balance that suits you.
Let's assume that you want to partner up with a popular YouTube channel, which only accepts fixed monthly payments. You have a budget of $5,000 and the channel asks for $2,500 a month. After 2 months of promotion, you notice a solid revenue stream of $500 per month. This means your investment will have completely paid off within only 10 months! But since you ran out of money within the first two months, you need to pause your partnership. Five months later you have accumulated enough money to finance another round of promotion. However, you find out that the YouTube channel has partnered up with another business in the meantime.
An otherwise working strategy may fail if there are not enough resources available to sustain it.
You maintain an Instagram page within the travel niche and reach 10,000 users every month. Thanks to a conversion rate of 0.1%, a new referral joins LockTrip every 3 days. You are happy with the results, especially since there was no financial investment involved.
What is missing in this scenario is that using a simple automation tool could triple the number of users reached, for a monthly subscription fee of just $20.
Ignoring monetary resources completely may limit your potential.
Above we explored the importance of being aware of your budget in order to be ready when everything works out as planned. Now that we know our financial limits, it is time to get back to reality. Truth is, things rarely play out as planned. This is why you need to think about the risks you are willing to take as a vital component of your strategic planning.
Money is just a tool. Success depends on how well it is used.
In section 5.2 we will discuss how to work with your resources responsibly to maximize your chances for success. In a nutshell, it is important to experiment with small amounts and only grow when validating success. This approach reduces your risk exposure significantly.
However, some strategies (examples below) don't allow for small-scale experiments.
- 1.Sponsoring an add campaign with your local public transport company or billboards. These usually ask for a minimum commitment of several weeks. If the cheapest option is $500, this is the amount you need to risk before being able to gather any data about your campaign.
- 2.Setting up a private website. Acquiring a domain is involved with a mandatory fee. Popular domains cost more. You will not be able to test your website before making some form of payment upfront (possibly including additional paid services).
- 3.Networking in a travel conference. In most cases you will need to pay for a ticket to join the conference.
In all of these cases you need to make some form of upfront investment, without having a guarantee or measure on the actual outcome. Your risk tolerance is thus an important factor as it defines the maximum risk you can take before getting the preliminary results.
If you've read through this and the previous sections, you should now have a good understanding of what you need to pay attention to when deciding on your unique path.
Identify your limits, strengths and opportunities and let them guide you.