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Can Affiliate Marketing Improve Customer Retention?

Can Affiliate Marketing Improve Customer Retention?

How to use affiliate marketing to acquire new buyers and purchasers.

The affiliate channel has, for a long time, focused on the acquisition of new buyers and purchasers. Yet through this focus there is a fear that we could be neglecting those all-important existing customers?

To consider this, there needs to be a better definition of what classes as a new or existing customer, however due to diversity within the industry, it is difficult to cover this with one blanket term. A good way to address the issue is discussed below.

Retail

A versatile vertical thanks to the broad range of products available, the types of customers and purchase frequency. As a result, the best way to determine whether a customer is new or existing is to consider the time and frequency of an online purchase. You can then look to utilise the affiliate channel to maintain an existing customer.

Common to this vertical is Fashion, and as many customers will look to make repeat purchases from specific brands, the affiliate channel can be used to keep this base engaged. Retargeting can be used to reward loyalty and exclusive discounts for repeat purchases can also be offered.

When looking at more considered purchases such as larger pieces of furniture, a brand may choose to take a different approach entirely by looking at the time when a customer should no longer be seen as existing. By this, an advertiser could consider customers who haven’t purchased for a prolonged period of time (such as 5 years or more) as a new customer once more. Alternatively, brands could use the affiliate channel to retarget new promotions for customers after a similar period of time based on their current purchasing behaviour.

Finally, when it comes to purchases made in the grocery space, customers may look through an affiliate site before deciding to make a purchase, therefore more advertisers should consider rewarding the different types of customers using a tiered commission structure for example:

  • New customers 10%.
  • Existing customers 5%.

In this way, brands will be able to reward both affiliates and their customers for engaging with the brand.

Utilities and services

Within this vertical, often a customer’s lifetime value is considered and used to decide whether the affiliate channel is driving incremental sales or not. As a result, brands may choose to utilise tiered commission structures as above.  In this case however, customers who choose to commit should be offered a higher commission for example:

  • Short: £20.
  • Medium: £40.
  • Long: £60.

Additionally, brands can work closely with different affiliates to retarget these customers who are due to renew to offer either an exclusive discount or higher commission again to keep the customer.  Another example of where affiliates should be rewarded and used to keep existing customers engaged is for content affiliates who specialise in specific content such as particular sporting events. They will drive useful traffic and conversions often for customers that class as existing and this is activity which should be rewarded to gain more exposure.

Travel

Within this sector, the affiliate channel can be utilised in similar ways to those above in order to engage the existing base. However, a really useful advantage of using the affiliate channel to engage this base is the depth of data which is available to affiliates. By using data which in some cases can’t be provided by advertisers themselves, affiliates can profile customers based on their purchasing behaviour which can allow for advertisers to retarget customers who are more likely to convert. This can be especially useful in off peak seasons.

The ever-evolving affiliate channel should be considered for more customer acquisition. As is briefly highlighted in this article there are more creative ways in which it can be used to maintain and engage the existing customer base.

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Anita Byekwaso

Anita Byekwaso

Anita joined the ​affilinet team in September 2016. As a Senior Account Executive her main responsibilities are to manage a number of Utilities and Service Sectors including First Utility, Lumo and TV Player. Anita is responsible for the strategic development as well as the new and existing opportunities on the programmes.

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