Affiliate Program KPI’s Optimization Crash Course

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Understand your affiliate program’s health indicators and what influences them. Learn how to drive the program to reach your revenue and exposure goals.

Experience level: Beginner
Target audience: Affiliate/Publisher, Merchant/Advertiser
Niche/vertical: Optimization

Cristian Miculi, Affiliate Network Coordinator, Avangate Inc (Twitter @affiliatedoc)

Published in: Business

Affiliate Program KPI’s Optimization Crash Course

  1. 1. Affiliate Program KPI’sOptimization Crash CourseCristian MiculiSr Affiliate Marketing Manager
  2. 2. What we will cover todayKPIs for your Affiliate Program Importance of monitoring the affiliate program KPIs What are the KPIs you should watch? Revenue-based KPIs Exposure KPIs Performance & Product KPIs Partnership KPIswww.avangate.com 2 2
  3. 3. Who are you? Merchants AffiliatesAffiliate program management agencies / OPMswww.avangate.com 3 3
  4. 4. Strategic investment requiring adequatemonitoring and often positive ROI Affiliate programs are the 3rd largest marketing budget behind PPC and email …www.avangate.com 4 4
  5. 5. Strategic investment requiring adequatemonitoring and often positive ROI US affiliate marketing spending will reach $4.5 billion by 2016 and will increase at a compound annual growth rate of 17% from 2011 through 2016www.avangate.com 5 5
  6. 6. www.avangate.com 6 6
  7. 7. What are important KPIs to affiliate programs?Take into account all the pieces Conversion Acquisition Retention Revenuewww.avangate.com 7 7
  8. 8. What are important KPIs to affiliate programs?Focus on your true business goals Revenue KPIs: weigh the amount of revenue you get / spend  Sales volumes / orders  Leads, installs (for digital goods only) Acquisition KPIs: get customers through affiliates  Exposure KPIs: clicks, views  Network KPIs: recruited affiliates, active affiliates, power rankingwww.avangate.com 8 8
  9. 9. What are important KPIs to affiliate programs?Focus on your true business goals Conversion KPIs: how efficient is your affiliate program  Conversion rate – Orders / Clicks  EPC – Sales volumes / Clicks x 100  Average order value (AOV) via affiliates – Sales volumes / Orders Retention KPIs: get a view from the customers’ perspective  Refunds  Renewals (digital goods)www.avangate.com 9 9
  10. 10. Getting down to business… Affiliate program management KPIs should be tuned in with your overall business KPIswww.avangate.com 10 10
  11. 11. The faster you react, the faster you grow Get dedicated help (in-house or OPM) to handle this.www.avangate.com 11 11
  12. 12. Revenue KPIsMoney talkswww.avangate.com 12 12
  13. 13. Revenue KPIsSales – the engine for ROI Sales trend Further investigationsLow sales Check number of affiliates in program, check conversion rateDeclining Check top affiliates, check platform tracking issues, check seasonality patternsConstant See other KPIs to increase salesIncreasing Be sure you know why this is happening and try to replicatewww.avangate.com 13 13
  14. 14. Sales – the engine of ROILow sales How many • Promote your affiliate program on your website • Accelerate the recruitment process – in affiliate affiliates do network, direct contact, services • Get more top affiliates to promote your you have in products • Get affiliates to promote in specific territories. your program? • Run a test on the tracking platform. • Be sure that affiliate links direct to Are there valid landing pages, affiliates aretracking issues? addressing the correct target audience (e.g. based on territories).www.avangate.com 14 14
  15. 15. Sales – the engine of ROIDeclining trend for sales • Get in touch with them if their sales are getting Check out your down – see how you can help. top affiliates and • Try to offer affiliates better conditions than your competition – commission, incentives (*).how they promote • Help them get original content on their website – sample products for reviews, unique selling your products points, etc. • Conversion rate dropping – shopping cart funnel analytics, see where people abandon the Check the purchase. conversion rate • Conversion rate constant  exposure is getting lower also – find out which affiliates are not trend sending traffic anymore to you and why.www.avangate.com 15 15
  16. 16. Sales – the engine of ROIDeclining trend for sales • Run affiliate special campaigns to increase sales during off-season: sales Sales contests, special bundles, discounts • Offer a complementary product / seasonality? service in order to compensate the sales drop • Check level of refunds for the product Product • See what your competition is offering as similar products and if they are end-of-life / successful with it • Too many competitors? Focus on a saturation? certain niche – functional / geographicalwww.avangate.com 16 16
  17. 17. 2. Use Performance IncentivesUse Performance Incentives to drive peakAncestry.comperformance from key affiliates With 7 billion genealogical records from across the globe and millions of family trees, we are the world’s largest online family history resource.www.avangate.com 17 17
  18. 18. Affiliate Tiers for Memberships • 25.00% for up to $3,000 per month net • 35.00% for $3,001 to $9,000 • 45.00% for $9,001 to $18,000 • 50.00% for $18,001 to $25,000 • 55.00% for $25,001 to $30,000 • 60.00% for $30,001 and above Plus tiered gift membershipswww.avangate.com 18 18
  19. 19. Sales – the engine of ROIConstant sales volumes • Higher number of clicks? You’re getting more exposure to non-targeted audiences. Get the affiliates to send more traffic to your targeted audience. • Lower number of clicks? Get more traffic sent Check other from affiliates and you will increase sales.KPIs and tune • Increase the AOV by offering complementary products in the shopping cart or bundles.them to grow • Constant number of affiliate partnerships? Recruit more – basically this will increase your sales. sales • Get more affiliates in your program activated, so that you will get more sales. • Offer your affiliates other tools to promote your products (*)www.avangate.com 19 19
  20. 20. The Right Tools right tools Give them theArgos provides acustomers and make affiliates,for them Engage their dedicated portal for it easier with a plethora ofresources: how to guides, creative resources (banners), PPC word lists, well as top 10 reasons to be an Argos affiliate webinars, asUK multi-channel retailer Argos.co.uk - www.argos-affiliates.co.uk Present in the affiliate landscape since 2001. Offers a dedicated portal for affiliates, with lots of resources: how to guides, creative resources (banners), PPC word lists, webinars, etc. www.avangate.com 20 20
  21. 21. Sales – the engine of ROI Sales volumes on the rise • Have you run a campaign lately? What did you offer to customers? What were the incentives you offered affiliates and which category of affiliates performed best? (coupon affiliates, niche, etc.) • Did you manage to attract top affiliates in your program? How did you find them and what was the approach? What did you offer them?Understand • Are you getting more exposure? Segment your customers and reach out to affiliates that can drive more purchasingthe causes customers • Find association patterns among the causes and replicate them to similar audiences • When in doubt, try replicating one thing at a time: increased commission, sales contest, discount coupon, etc. Replicate thesuccess actions www.avangate.com 21 21
  22. 22. What are important KPIs to affiliate programs?Take into account all the pieces Conversion Acquisition Retention Revenuewww.avangate.com 22 22
  23. 23. Leads / installs also influence the revenueHybrid revenue-acquisition KPIs Leads / installs can be viewed as qualified clicks  B2B products – affiliates generally paid per lead  Digital products – affiliates can also be paid for installs  Some merchants pay affiliates for both sales and leads / installs Leads / installs numbers rising If sales numbers are dropping, you might have a problem on the product side: price, offering, etc. Closely monitor the balance between the costs and the revenue coming from sales Leads / installs numbers dropping – lower interest for your product Check the correlation with the sales numbers; incentivize affiliates if necessary Check to see if it’s worth it for you to also paywww.avangate.com affiliates 23 this for 23
  24. 24. Acquisition KPIsGet customers through affiliateswww.avangate.com 24 24
  25. 25. Exposure KPIsSee the attention your products get online Exposure trend Further investigationLow exposure Check number of active affiliates promoting your productsDeclining Check top traffic senders / affiliatesConstant Expansion possibility to new marketsIncreasing Be sure you know why this is happening and grow revenue along with exposurewww.avangate.com 25 25
  26. 26. Exposure – see the attention your products getLow exposure from affiliates • Make sure affiliates have the necessary tools Attract the • Recruit affiliates – from website, affiliate network, direct contact, via professional affiliates’ services • Send promotional launch campaigns to speed attention up the adoption of your products by affiliates. • Incentivize affiliates to promote your brand Get more • Get more traffic on your website through direct sources also, to boost its popularity exposure for and attract affiliates • Engage on social media your brand / productswww.avangate.com 26 26
  27. 27. Get the affiliates’ attentionIObit launched a new software product and created a campaign tooffer the affiliates in the Avangate Network a $30 end-user discount.Result: new product was picked up by more than 50% of their affiliatesplus the ones joining along with this campaign www.avangate.com 27 27
  28. 28. Exposure – see the attention your products getExposure declining Get in touch with • See their reasons for this affiliates that • Offer them better conditions than the competition if they were convertingdropped their clicks • Incentives for best performers / leads / installs(digital goods only) • Contact the big affiliates that you Activate have in your program who are not sending clicks to your products affiliates with • See what they need to get started no / few clickswww.avangate.com 28 28
  29. 29. Exposure – see the attention your products getConstant / rising exposure • See where your clicks / views come from and expand to new markets Understand • Grow the sales by running special campaigns, offeringwhat led to this incentives to affiliates, getting new power affiliates, etc.and replicate it • Get quality exposure / leads for your products based on your target audience • Use the “unqualified” traffic: segment your offering to Monitor the have more users that can spread the word on your producttraffic qualitywww.avangate.com 29 29
  30. 30. Network KPIsLeverage your products’ potential via strong partnerswww.avangate.com 30 30
  31. 31. Network KPIsRecruited affiliates • higher • Website, commission, • affiliate forums, • better incentives, • PPC, • products with • direct approach better stats (conv. big affiliates rate, EPC) Recruit via Look at every competitors channel Engage with Affiliate recruited network affiliates recruitment • welcome emails • newsletters, • starter kit tools • direct contact, • asking for • list of power feedback affiliateswww.avangate.com 31 31
  32. 32. Affiliate network recruitmentSome affiliate networks provide “start-up” kits: lists of power affiliatesto begin the self-service network recruitment process. You can contactthem and get your products promoted on their websites. www.avangate.com 32 32
  33. 33. Network KPIsActive affiliates Incentivize Actions to get them to promote your products Motivate big fish with performance incentives Provide exclusive conditions Give them the right customized tools to drive sales Engage and Educate Affiliateswww.avangate.com 33 33
  34. 34. Network KPIsAffiliate Network Power Ranking Based on internal network algorithms Helps affiliates determine the best products / campaigns to promote based on conversion rate, previous sales, # of affiliates promoting it Speak with your network representative to see how you can grow itwww.avangate.com 34 34
  35. 35. What are important KPIs to affiliate programs?Take into account all the pieces Conversion Acquisition Retention Revenuewww.avangate.com 35 35
  36. 36. Conversion & Retention KPIsHow efficient is your affiliate program?How good are your products / services when compared to others?www.avangate.com 36 36
  37. 37. Conversion KPIsEfficiency of affiliate program Conversion rate: orders / clicks  Indirectly shows the value of your product / service  Average conversion rate: 2%  Grow it by optimizing your website, offering affiliates the necessary materials to promote your products EPC: Sales / clicks x 100  Shows the theoretical value of a click for affiliates  The higher it is in conjunction with an average price, the more attractive is for affiliates  EPC can be increased by growing sales and optimizing the conversion ratewww.avangate.com 37 37
  38. 38. Conversion KPIsEfficiency of affiliate program Average Order Value: Sales / orders  See how much people spend on our products on average  Used to compare actual AOV to your products’ prices. If too low – your affiliate channel sells mostly discounts  Grow it by offering cross-sells, bundles at special prices, initially free products with renewals (digital goods)www.avangate.com 38 38
  39. 39. Retention KPIsHow attractive is your product to customers / affiliates Refunds  Too many refunds – look at why this is happening and stop this  Refunds usually associate themselves with negative reviews  See the correlation between the drop in revenue / exposure and refunds Renewal rate (digital goods)  Affiliates mission: bring new customers to you  You can reward your best performing affiliates with crediting them for the renewals  See the ratio between new customers vs. renewalswww.avangate.com 39 39
  40. 40. Takeaways Convince top affiliates that your affiliate program can bring them more money Help affiliates help you – give them the right tools to promote your products Be aware of the numbers (KPIs) in your affiliate program – there’s always room for better Stay in touch with affiliates to react rapidly Realistically align your affiliate program goals with your business goalswww.avangate.com 40 40
  41. 41. Want to LearnMore?Blog:blog.avangate.comTwitter:@AffiliateDocFacebook:Avangate.Affiliate.Network www.avangate.com 41 41
  42. 42. Thank You!Cristian Miculi, Sr Affiliate Marketing Managercm@avangate.comAvangate Inc.Redwood Shores CA., USATel: (650) 249 - 5280Avangate B.V.Amsterdam, The NetherlandsTel: +31 20 890 8080info@avangate.comwww.avangate.com
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