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Are the Wrong KPIs Hurting Your Affiliate Programme’s Profitability?

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PerformanceIN's Matthew Wood argues that it's essential to think long-term in order to have a balanced, diversified affiliate partner base - 'don't just go for the quick buck.'

A recent debate over at the Affiliate Cockpit highlighted from some corners, the ongoing concern that a majority of affiliate managers - while smart and eager to learn - are often at the start of their career path within digital.

Handed big targets and revenue KPIs by internal leaders, it’s arguable that the culture of some companies enables them to take the ‘easier’ route by working with a small number of publishers, where volume can be achieved by business models that have evolved heavily around the last click.

Why should they not take this straightforward and legitimate route, though? A smart and coordinated campaign with tenancy payments and a exclusive offer in the market will have the big players promising the world in terms of exposure to their audiences. Run one after the other, and this can easily tilt your revenue in the right direction, enabling targets to be hit, especially at month or quarter-end.

Job done! Everyone seems happy…

I would argue that this short term view could in the long run damage the diversity, breadth and profitability of your affiliate programme, and in turn reflect on the industry as whole. This goes back to KPIs in the first instance; it should not be all about revenue.

Last week we asked the PerformanceIN community, ‘what KPIs should be given to affiliate managers to run a successful and profitable affiliate programme?

Here are some of the suggestions that were put forward:

  • Average basket size (especially rewarding engaging with partners who are above average).
  • Percentage of revenue generated from incentive vs. other demographic types.
  • Micro-influencers engaged.
  • Tenancy + CPA aggregated customer cost.
  • New vs. existing publishers engaged.
  • New vs. existing customers engaged.
  • Mobile sales tracked.

The outcome highlights the fact that advertisers must continue to diversify partners, encourage adoption by new media owners and technology start-ups, and continue to embrace influencers who can funnel profitable long-term customers to a brand. That’s unlikely to be achieved by most, unless smart KPIs are set in the first instance.

I’m sure that these responses just scratch the surface, and that there’s plenty more discussion to be had on this subject. Whether you agree or disagree that affiliate managers should work to a different set of KPIs, let us know your thoughts over on our social channels below. #AffiliateKPIs

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Matthew Wood

Matthew Wood

Matthew is a 20-year industry veteran and behind the PI LIVE, the Influencer Marketing Show and the UK and International Performance Marketing Awards.

Matthew is co-founder and non-executive director of Optimus, an award-winning digital performance marketing agency and co-founder of vouchercloud.

Read more from Matthew

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