So long as you are armed with the right information about how to best manage a programme, the fact is that affiliate marketing is a high performing and measureable way of driving sales that sustainably grow your business.
By Helen Southgate, affilinet UK MD
This article will cover:
• What affiliate marketing is
• What you can expect from affiliates
• Hints and tips for managing your affiliate programme
What is affiliate marketing?
In its simplest form, affiliate marketing is an internet-based marketing practice in which an advertiser (brand or merchant) rewards channel partners termed as affiliates (website owners or publishers) a commission for their marketing contribution towards a visitor conversion. Advertisers typically reward affiliates in two keys ways:
• Cost per action (CPA): An affiliate is rewarded when the site visitor that is redirected to the advertiser’s website by the affiliate makes a purchase. Usually the CPA cost is expressed as a percentage of the total value of the transaction
• Cost per lead (CPL): An affiliate is rewarded when the customer they refer enters enough information for them to qualify as a lead. For example, if the customer enters their personal details into a hotel’s website and requests a travel brochure. The affiliate is then rewarded for each brochure request made
What can you expect from affiliates?
A successful programme will generate increased revenues, number of sales and traffic. However, the success of the programme doesn’t rest solely on the shoulders of affiliates; advertisers have a key role to play too. Understanding whom you, as an advertiser, want to target is really important to establish up front.
The better an advertiser knows their market including demographic, online behaviours and what space their market occupies online the better they can target the right affiliates.
Affiliate marketing should be about quality, not quantity. Working with the right affiliates that adhere to best practice is advised as strategically quality has a huge role to play in underpinning programmes that support advertisers brand credentials, drive incremental sales and lead to customer retention and acquisition.
A focus on quality can also significantly increase the lifetime value of a consumer and convert them from one off purchaser to someone that is loyal to the advertiser’s brands – a rare and beautiful thing in today’s digital age.
Tips for managing your affiliate programme
Pay affiliates on time: Operating an efficient and timely payment model that ensures all affiliates are paid on time is crucial to ensure that you’re encouraging affiliates to reinvest the time and necessary spend on developing the partnership. Be transparent with affiliates and if you can cancel a sale explain the reasons why. Affiliates are the lynchpin of a good programme, so be sure to treat them well!
Optimise your site: As an advertiser it is important to ensure that the web pages customers click through to from the affiliate are optimised. This will ensure maximum conversion. This involves maintaining working links to up-to-date information and functioning pages.
Also give due thought to how you can improve the user journey such as using deep links directly to a specific product or category page. As mobiles become increasingly prolific and a device of choice for consumers, be sure you don’t overlook this channel and have effective tracking in place.
Incentivise your affiliates: It is important to consider what is attractive to incentivise both affiliate partners and site visitors. Generally, the higher the CPA, the more affiliates your programme is likely to attract. However, generally it pays to be dynamic with commission rather than setting a blanket rate as this allows for rates to be raised around seasonal peaks or to attract new affiliate partners.
Optimise your programme using data: The most successful programmes are those that are continually evolving. This requires a good understanding of what is selling, where customers are buying from and via what device. Affiliates now know more than ever about customers’ purchasing journeys and often the affiliate channel influences consumers much higher up the purchasing funnel, not just the last click.
Understand where and how your affiliate programme is impacting your customer’s purchasing decisions and you will generate a much more insightful understanding of your digital spend overall.
In summary, there are plenty of fantastic opportunities for small businesses within the space and for the affiliates that promote their products and services. The flexible nature of affiliates makes them able to adapt to changing market conditions and willing to react to opportunity – sounds like the ideal business partner to me!
For more information visit: affilinet UK