Maximizing CLTV & ROI by Incentivizing Consumer Behavior
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Most companies struggle to efficiently manage, scale and incentivize their partners on a performance-basis. Fortunately, the evolution of performance-based marketing technologies and methodologies offers an efficient solution. We’ll show you how leading companies are using this strategy to track and manage partnerships through a single program, pay only when outcomes are realized and implement smart incentives.
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Maximizing CLTV & ROI by Incentivizing Consumer Behavior
- 1. July 25 - 26, 2018 / Convene, 117 W. 46th St., NYC Maximizing CLTV & ROI by Incentivizing Consumer Behavior ROBERT GLAZER + DAN MARQUES
- 2. July 25 - 26, 2018 / Convene, 117 W. 46th St., NYC | 2 ROBERT GLAZER Founder & Managing Director Acceleration Partners DAN MARQUES Managing Director Trident Growth Partners
- 3. July 25 - 26, 2018 / Convene, 117 W. 46th St., NYC | PERFORMANCE PARTNERSHIPS Four Things We’ll Focus On Today 3 Learn why Performance Partnerships are the future of your business 1. Figure out what you value 2. Use technology to scale 3. Align incentives with outcomes 4. Find and grow performance partners within this framework
- 4. July 25 - 26, 2018 / Convene, 117 W. 46th St., NYC | Aligning Business Metrics To Partner Payments 4 FIRST RIDE PARTNER PAYOUTBACKGROUND CHECK + =
- 5. July 25 - 26, 2018 / Convene, 117 W. 46th St., NYC | 5 “Doing the right thing is more important than doing the thing right.” PETER DRUCKER
- 6. July 25 - 26, 2018 / Convene, 117 W. 46th St., NYC | Four things we’ll focus on today 6 SCALING THE WRONG THINGS
- 7. July 25 - 26, 2018 / Convene, 117 W. 46th St., NYC | Four things we’ll focus on today 7 NOT ABLE TO SCALE RIGHT THINGS
- 8. July 25 - 26, 2018 / Convene, 117 W. 46th St., NYC | 8
- 9. July 25 - 26, 2018 / Convene, 117 W. 46th St., NYC | Affiliate (Performance) Marketing Model 9 PROGRAM MANAGER AFFILIATE NETWORKS (Tracking & Payment Platform) AFFILIATES (Publishers) CUSTOMER MERCHANTS (Advertisers)
- 10. July 25 - 26, 2018 / Convene, 117 W. 46th St., NYC | 10 cv
- 11. July 25 - 26, 2018 / Convene, 117 W. 46th St., NYC | Four things we’ll focus on today 11 Paying on a Cost Per Acquisition (CPA) 1.
- 12. July 25 - 26, 2018 / Convene, 117 W. 46th St., NYC | Transparency of Partner’s activities 2. 12
- 13. July 25 - 26, 2018 / Convene, 117 W. 46th St., NYC | Ongoing Partnership 3. 13
- 14. July 25 - 26, 2018 / Convene, 117 W. 46th St., NYC | Influencers NATIVE affiliate partnerships referrals Business Development Real time tracking and payment 4. 14
- 15. July 25 - 26, 2018 / Convene, 117 W. 46th St., NYC | TAX FORMSCONTRACTS (BD TIME AND LEGAL) ACCESS TO REPORTING TRACKING OUTCOMES/RESULTS CUSTOM REQUIREMENTS (IE LANDING PAGES) What Do These Ideas Have In Common?SOUND FAMILIAR? GREATER TRANSPARENCY ENHANCED SECURITY IMPROVED TRACEABILITY Increased efficiency & speedREDUCED COSTS Smart Contracts 15
- 16. July 25 - 26, 2018 / Convene, 117 W. 46th St., NYC | The Power Of Marketplaces 16
- 17. July 25 - 26, 2018 / Convene, 117 W. 46th St., NYC | Marketing Marketplaces - 2.0 17
- 18. July 25 - 26, 2018 / Convene, 117 W. 46th St., NYC | High Velocity Advanced Campaign Management Single Source PERFORMANCE PARTNERSHIPS Bring data, scale and efficiency to the mid and long tail Business Dev Lite Partnerships Affiliate Marketing Partners Performance Partnerships - Third “Fat Pipe” 18
- 19. July 25 - 26, 2018 / Convene, 117 W. 46th St., NYC | Aligning Business Metrics To Partner Payments 19 FIRST RIDE PARTNER PAYOUTBACKGROUND CHECK + =
- 20. July 25 - 26, 2018 / Convene, 117 W. 46th St., NYC | Smart Commissioning Models “Incrementality multiplier” informed by cross channel data Incrementality by partner and profitability at product level and new vs returning Payout tied to business definition of engagement Acme Travel
- 21. July 25 - 26, 2018 / Convene, 117 W. 46th St., NYC | Maturity Model Approach (Crawl, Walk, Run) Variable Unit Economics Variable Unit Economics Variable Unit Economics Last Click ROAS Target Customer Reporting (New, Returning, LTV) Incremental Attribution Triangulation De-Average ROAS to most granular level CLTV Investment Thresholds -> Scale 19
- 22. July 25 - 26, 2018 / Convene, 117 W. 46th St., NYC | 10 Years of Attribution Projects MODELS KEY DATA POINTS • Last Click • Any Click • Fractional • Customer Journey • Incremental • Proprietary • Test & Control • First Click • First/Last Touch (View) • Time Decay • Linear • Assists • Omni-channel • Brick & Mortar • Cross-Device • Real-Time • Customer Level • Non-Revenue Events • Call Tracking • Margin • Marketing Cost • Impression Tracking • Site Engagement • Channel Specific KPIs 20
- 23. July 25 - 26, 2018 / Convene, 117 W. 46th St., NYC | The streetlight effect is a type of observational bias that occurs when people are searching for something and look only where it is easiest. Another term for this is a drunkard's search. Never an “all seeing answer machine”. GIGO Risk High Minimal material changes What I’ve Learned? Streetlight Effect 21
- 24. July 25 - 26, 2018 / Convene, 117 W. 46th St., NYC | Complexity increasing in an ever growing Multi-Channel & Multi-Device World Why Does The Streetlight Effect Exist? 22
- 25. July 25 - 26, 2018 / Convene, 117 W. 46th St., NYC | No easy answer, open minded approach, use an array of methods as appropriate to your goals: • Attribution as one tool in the toolbox • Triangulation Approach • Incremental P&L View at Customer Level What Does Work For Attribution? 23
- 26. July 25 - 26, 2018 / Convene, 117 W. 46th St., NYC | 1. Acquire a new customer Normalize Online Marketing Investment Across Vehicles Identify what you are willing to spend to: 3. Based on desired top and bottom line goals 2. Get an existing customer to repeat 24
- 27. July 25 - 26, 2018 / Convene, 117 W. 46th St., NYC | BizDev – 15% AFFILIATE MARKETING Super affiliates (larger scale, some customization) Mid-level professional affiliates (content, paid ads, mass media) Local & small affiliates (blogs, SMB, social/reviews) Referrals – 5% The Performance Marketing Pyramid 25
- 28. July 25 - 26, 2018 / Convene, 117 W. 46th St., NYC | THANK YOU! ROBERT GLAZER Founder & Managing Director Acceleration Partners rglazer@accelerationpartners.com @robert_glazer www.accelerationpartners.com DAN MARQUES Managing Director Trident Growth Partners dan@tridentgrowth.com @dmarques1 www.tridentgrowth.com 26
Editor's Notes
- Change title
- Learn why Performance Partnerships are the future of your business Figure out what you value Use technology to scale Align incentives with outcomes Find and grow performance partners within this framework
- For driver recruitment, Uber has affiliate tracking technology deeply embedded into their business workflow, called the Uber Partner Program Partners such a job boards etc. send potential drivers to Uber though tracked links As they move through the business workflow, the partners are compensated Small amount at background check Bigger amount as they complete their first ride months later and hit swipe Partners have real time access to how they are doing Goal is tens of thousands of global partners in this model
- As you can see from the hands raised, the vast majority of you would rather pay for outcomes—for results. What I’m going to show you is, while that may be what you want, it’s most likely not what you have been doing… especially in marketing And you’re not alone. From what I’ve seen, MOST companies – whether it’s in their business or marketing partnerships – pay for inputs.
- When you’re paying for inputs – not outcomes – it can make it harder to scale the right things as Drucker noted You might be turning up volume at the expense of results, which is dangerous when incentives are not aligned Scaling at the stuff that’s easiest to scale – pull from addiction to paid marketing article Many companies are scaling at the wrong things because it’s easier to scale them
- You might also have some marketing partnerships that work great But its hard to scale when you are reliant on spreadsheets, invoices and manual processes. Its resource intensive You also might have partners who find out months later that a promotion did really well
- What the affiliate marketing model does is that it allows you to grow your marketing and business development partners in a much more efficient, scalable way The model is quickly expanding to other areas of the business and I want to show you a few examples of what this looks like Before we get into those examples, I’ll pose two more questions to discuss at your tables
- How many of you know of or understand the concept of affiliate marketing? Those of you leveraging the affiliate model in your marketing are actually paying for outcomes. But… if you aren’t applying this model to the majority of your business and marketing partnerships – be it business development, influencer marketing, technology partnerships, etc. – then you’re still only paying for inputs. Swap the word affiliate for partner Ecosystem, link based tracking The network handles the one to many on both sides, from the agreement, to tracking, payment etc. Your partners bear significant risk
- Go into this in detail in my book One of the big changes in affiliate marketing SaaS platforms, License the technology and run it under your own brand Then in makes economic sense to recruit your own partners onto the platform
- How PP differs from traditional affiliate marketing or performance marketing in general CPA component = COD You pay when you get what you want. IN CASE ITS NOT CLEAR, YOU ARE PAYING FOR MARKETING AFTER YOU GET A SALE/LEAD There is a different between paying for results and being able to measure results
- 10 years ago brands were afraid to ask their partners what they were doing Don’t ask don’t tell in the model You are fully aware of everything they are doing, they aren’t trying to hide anything from you
- Affiliate marketing was always very transactional The future of performance partnerships is much more relationship oriented As part of the transparency element, you treat them as a partner. You're don’t compete with them and you play the long game
- Real time tracking and payment and contracting Can be private label and sit in house, don’t have to share your data More companies calling it a “Partner program”
- Here are some of the common issues Contracts (BD time and legal) Tracking outcomes/results Payment to partners Tax forms Access to reporting for invoicing Custom requirements (ie landing pages, codes etc) Resolves/scales a lot of the problems your BD teams have
- How to tap into the power of marketing places with Performance Partnerships Both companies leverage online marketplaces to grow quickly without owning the underlying assets Uber doesn’t own cars Airbnb doesn’t own property In the same vein, you won’t need to own all your sales and marketing Hold on to this slide for now …
- Smart companies are using PP to Open Source key parts of their marketing to experts Scale up their business though an extended marketing team You figure out Instagram and now you have to learn Snapchat and We Chat Thousands of partners around the world, just have to define the clear outcomes and rules of engagement You can now roll all these people into one system
- People spend a lot of money with FB and Google because they make it really efficient to do so, CMO calls it fat pipe Deploy large budgets at scale, irrespective of ROI PP gives you a third fat pipe to bring automation and some of these programmatic elements to marketing and digital partnerships For example, if you have a hot new product launch, you can get that out to thousands of partners at once to start promoting and up their commission rate in seconds. Keep slide
- Stub Hub – logo Instrumentality multiplier informed by cross channel data Target - logo Incereminatily by partner and profitability at product level and new vs returning Acme Travel Payout tied to business definition of engagement
- No easy answer, open minded approach, use an array of methods as appropriate to your goals: Attribution as one tool in the toolbox – never an “all knowing answer machine”, but often short and long term wins exist from the insights Triangulation Approach – gather multiple measurement methods (Vendor, Web Analytics, Attribution) to understand scope of potential impacts Incremental P&L View at Customer Level – incorporate full variable costs (ex. Margin, Shipping) and expected CLTV to better understand profitability
- (Need visual support/ideas here) Identify what you are willing to spend to: Acquire a new customer Get an existing customer to repeat (based on segmentation group – e.g. Lapsed, Recent Buyer, Top Customer) Based on desired top and bottom line goals Standardize the “rules of the game” and evaluate each digital marketing vehicle on same basis, scaling investment with those who can grow within your rules. (i.e. Why pay $25 to acquire a customer in Paid Search and $10 in Affiliate; if predicted CLTV the same – scale Affiliate further)
- The 85% is on a scaleable system and single platform Maybe remove slide
- Want a copy of the book and did not get one, please reach out ADD contact info for Dan