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)
2. What we will cover today
KPIs 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 KPIs
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3. Who are you?
Merchants
Affiliates
Affiliate program management agencies / OPMs
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4. Strategic investment requiring adequate
monitoring and often positive ROI
Affiliate programs are
the 3rd largest
marketing budget
behind PPC and email
…
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5. Strategic investment requiring adequate
monitoring 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
2016
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7. What are important KPIs to affiliate programs?
Take into account all the pieces
Conversion
Acquisition Retention
Revenue
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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 ranking
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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)
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10. Getting down to business…
Affiliate program management KPIs
should be tuned in with your overall
business KPIs
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11. The faster you react, the faster you grow
Get dedicated help (in-house or OPM)
to handle this.
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13. Revenue KPIs
Sales – the engine for ROI
Sales trend Further investigations
Low sales Check number of affiliates in program, check
conversion rate
Declining Check top affiliates, check platform tracking
issues, check seasonality patterns
Constant See other KPIs to increase sales
Increasing Be sure you know why this is happening and
try to replicate
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14. Sales – the engine of ROI
Low 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 are
tracking issues? addressing the correct target
audience (e.g. based on territories).
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15. Sales – the engine of ROI
Declining 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.
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16. Sales – the engine of ROI
Declining 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 / geographical
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17. 2. Use Performance Incentives
Use Performance Incentives to drive peak
Ancestry.com
performance 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.
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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 memberships
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19. Sales – the engine of ROI
Constant 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 (*)
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20. The Right Tools right tools
Give them the
Argos provides acustomers and make affiliates,for them
Engage their dedicated portal for it easier with a plethora of
resources: 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.
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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 purchasing
the 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 the
success actions
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22. What are important KPIs to affiliate programs?
Take into account all the pieces
Conversion
Acquisition Retention
Revenue
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23. Leads / installs also influence the revenue
Hybrid 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 pay
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for
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25. Exposure KPIs
See the attention your products get online
Exposure trend Further investigation
Low exposure Check number of active affiliates promoting
your products
Declining Check top traffic senders / affiliates
Constant Expansion possibility to new markets
Increasing Be sure you know why this is happening and
grow revenue along with exposure
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26. Exposure – see the attention your products get
Low 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 /
products
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27. Get the affiliates’ attention
IObit launched a new software product and created a campaign to
offer the affiliates in the Avangate Network a $30 end-user discount.
Result: new product was picked up by more than 50% of their affiliates
plus the ones joining along with this campaign
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28. Exposure – see the attention your products get
Exposure declining
Get in touch with • See their reasons for this
affiliates that • Offer them better conditions than the
competition if they were converting
dropped 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 clicks
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29. Exposure – see the attention your products get
Constant / rising exposure
• See where your clicks / views come from and expand to
new markets
Understand • Grow the sales by running special campaigns, offering
what 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 product
traffic quality
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31. Network KPIs
Recruited 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 affiliates
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32. Affiliate network recruitment
Some affiliate networks provide “start-up” kits: lists of power affiliates
to begin the self-service network recruitment process. You can contact
them and get your products promoted on their websites.
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33. Network KPIs
Active 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 Affiliates
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34. Network KPIs
Affiliate 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 it
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35. What are important KPIs to affiliate programs?
Take into account all the pieces
Conversion
Acquisition Retention
Revenue
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36. Conversion & Retention KPIs
How efficient is your affiliate program?
How good are your products / services when compared to others?
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37. Conversion KPIs
Efficiency 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 rate
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38. Conversion KPIs
Efficiency 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)
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39. Retention KPIs
How 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. renewals
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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 goals
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