So, you’ve set up your affiliate marketing program for success. You’ve vetted your partners, checked all the links, and have a great network in place. Now you just sit back and relax, right? Nope, not even close. If you want all this to work (and keep working) smoothly, you have to crunch some numbers. Key Performance Indicators (or KPI’s) are the certain sets of data that keep you in the know about how your program is succeeding…or coming up short. Here’s a few affiliate-specific indicators to measure how your campaign is doing.
What’s Going Out?
Before you start drooling over your tasty sales numbers, you should take a hard look at what you’re paying out. Typical numbers on any marketing campaign include return on ad spend (ROAS) and the old favorite, return on investment (ROI). These numbers can be a bit nebulous when you have a wide variety of strategies in place, so try to keep the data specific to each campaign. The best KPI to keep straight are the commissions you’re paying out. Smaller commissions might be dragging down the affiliate’s motivation and cramping sales, and giant commissions are likely taking a bite out of your profit margin. Try to find a mean average, and stick to it. Then, take a peek at your cost per acquisition (CPA) and, depending on your end goal (either sales, clicks, or opt-in/sign up form), you should be able to pin down your best (and worst) affiliate performers. Simply divide the total cost spent on this specific campaign by any particular affiliate’s conversion rate, and you’ve got it. Note your best and worst performers.
Who’s On First?
Now, you’ve got some numbers to look over and some decisions to make, because now we’ll check how our individual affiliate partners are doing. Using the above metrics, you can establish a top ten list. Where this really becomes useful is when you track them month-to-month or year-to-year. Have you rewarded your consistently great performers with bigger percentages and praise? Have you tried to coach up your lower half with advice and incentives? And lastly, you may need to make a decisive move if you have a few bottom draggers…give them some time to improve, but don’t let them drag down your bottom line.
Once you’ve optimized your team, try to take a bigger picture look at your strategy. Should you trim down to the absolute best team and run lean? Or is it time to expand and multiply that affiliate power? More links could mean more sales…and could also mean more supervision, and a greater chance that someone new could make some errors in judgement. Steady conversion rates and increased click traffic are good indicators that your program is maturing nicely, and watch the timing for each affiliate. Some put a lot of effort in at first, and then tail off; constant gentle pressure, as Danny Meyer says, is the best way to guide and lead. Don’t let up, but don’t be harsh. When you see steady growth across the board, it may be time to recruit a few more partners.
Now, The Good Stuff
Here we get into the best part: conversions and sales. Now, these numbers are what everyone’s looking for, but don’t neglect some other crucial indicators that should factor into your measurement of success. If your affiliate partners are talented and advocating for your brand, you should be seeing increased clicks, web traffic, and brand awareness…all positives for the campaign. Harder to quantify, but don’t ignore them; even if a consumer clicks on a link, becomes familiar with who you are and what you offer without buying, that’s a good thing. Data in all these forms may be beyond your reach to get hard numbers for, so you may want to enlist the help of an expert affiliate marketing company to help you mine this valuable information. Once you’re on to the conversion rates, there’s lots to check out. Are there lots of new customers, or are people coming back for more? Is the average order value (AOV) low? If it is, you might want to consider adding incentives or deals for customers to put more in their cart. And then, of course, the straight up conversion rate. Look carefully at various landing sites and promotions to see if there’s a way you could tweak it to give the customer a little boost to click the “buy” button. Social proof is always good; by listing how many other people have bought the product or some good reviews; it might give the buyer that added confidence to make the purchase.
What KPI are you looking at? Any important ones we missed? Let us know what you think, and let’s start a conversation!