Whether you are just getting started or evaluating an existing affiliate marketing growth strategy, it’s essential to identify your objectives and create a strong plan tied to desired results early on. This year, every decision you make within the affiliate channel should leverage best practices in partnership and technology to create an integrated performance marketing approach that supports your corporate goals and brand KPIs.
Since knowing where to start can sometimes be overwhelming, we have created an easy three-step checklist for you to kick-start your affiliate strategy this year.
Step 1: Define your KPIs
Revenue
Most companies focus on revenue as their main KPI, and often this is the result of optimising other KPIs well. Net new revenue from affiliate can be the result of increasing conversions, earning placements that reach specific audiences, increasing average basket value, or extending customers’ lifetime value.
New vs returning customers
Acquiring new customers, engaging them and retaining existing loyal buyers is essential to growth, and affiliates can contribute to both. Having the right strategy and tracking to achieve growth in both segments will be essential to your success.
Category and product level ROI
If your company has multiple category levels and product SKUs, you can optimise your program and ROI with category and product level tracking. Most affiliate networks and tracking platforms allow this level of reporting and crediting, meaning you can optimise your program’s margins and product feeds, manage inventory as needed, acquire new customers through new product releases and personalise the user experiences based on individual buyer behaviours.
AOV
There are several strategies that can help increase your average order value. In the travel and hospitality sector, length of stay can be an important metric that drives increased revenue for a brand. Mapping out some increased AOV strategies to test with different partners can help drive desired revenue targets.
Lifetime value and frequency of purchase
With more robust tracking capabilities available today, companies can track Lifetime Value and Frequency of Purchase for individual shoppers. Understanding this data will help you make strategic decisions and test different affiliate campaigns to maximise both LTV and Frequency of Purchase, positively impacting the bottom line.
Other (market share, brand exposure, engagement)
Companies can enjoy added benefits of increased brand exposure, market share, and consumer engagement because of affiliates, however not every brand tracks these KPIs. Many companies are now creating strategies and tracking approaches to understand and credit the entire click-to-consume path, not just last click conversions. These top and middle funnel benefits should be considered and built into your affiliate marketing plan.
Step 2: Identify which technologies you will need
Attribution and click-to-consume path analysis
Different affiliate networks and tracking platforms have different attribution, click-to-consume path analysis, and cross-channel tracking capabilities. Attribution can be a powerful addition to a strategic affiliate marketing growth plan.
Personalisation
Personalisation is a growing trend online. In particular, millennials now make up a larger percentage of total online shoppers, and they expect a more personalised user experience. Some affiliate networks and affiliates now have these capabilities, often using AI and API integrations to create a personalised user experience, driving increased sales and increasing other KPIs. Investigate your options here and choose technology solutions that can provide the personalisation capabilities you will need.
Strategic segmentation
KPIs related to category and product level segmentation can be better optimised when the tracking and reporting technologies allow for customer segmentation at a granular level. Companies are realising, due to the many personalisation variables, that there are thousands of personas out there, not just one or two per brand. It’s important to have a strategic segmentation plan in place to effectively optimise all consumer and campaign groups.
Step 3: Identify your ideal affiliate partners
Different partner types will benefit the affiliate program in different ways. Some affiliates partners may not be an appropriate fit for a brand, while others with true potential may be overlooked without a clear partner plan in place. Here are a few common partner types to consider:
Coupon & loyalty
Incentive, cashback and coupon websites including deal distributors.
Content & influencer
Online magazines, review sites, bloggers, social channel groups (private and public), and social influencers all fall into this category.
Conversion & search
Paid search, paid social, paid shopping and conversation rate optimisation (CRO) partners that will work on a performance basis.
Brand to brand
Other complementary brands that drive sales and cross-sell each other’s product offerings, technology integrations and deals.
In closing
Without a well-thought-out strategic growth plan, it is difficult to grow a profitable and meaningful affiliate marketing program tied to overall corporate and brand objectives. By following these three steps each year, reviewing them every quarter, and re-aligning action items to your affiliate growth plan, you stand a better chance of competing in the market, growing sales, and achieving your desired results.
If you need help creating or refining your strategic affiliate growth plan, you can seek help from your affiliate network, agency partner or in-house affiliate manager.