How to Increase Affiliate Marketing ROI in 5 Steps
Incentivizing affiliates every time they successfully refer your products to the customer doesn't always bring in the results you expect.
Your affiliates may be unable to generate referral sales that meet your expectations. And if that’s the case, you’re wasting resources that could be used on other marketing strategies with better conversions.
Therefore, you have to consider growing the return on investment (ROI) of your affiliate program if you want it to work!
In this post, we’ll discuss the things you must do to scale your program properly.
Collaborate With The Best Affiliates
First, finding the right affiliates that can sell your product crucial to your program.
The question now is...where do you find them?
Below are some of the most popular sources where to find affiliates who will help you bring home the bacon:
Affiliate Marketing Agency
Affiliate marketing agencies are likely to take care of everything.
You do not have to look for affiliates, roll out a strategy, or control how well or bad the campaign performs. They already have a database of affiliates and can find someone who will work out for your niche specifically.
Moreover, they can ask for a sale if they have worked with an affiliate before.
As you can see, they’re designed to help existing programs grow their affiliate marketing ROI!
However, expect to pay a premium for their services.
Most agencies will require you to do a consultation call with them so they can analyze your needs and wants. Only then will you receive a quote for the services you need to grow your affiliate marketing ROI, which should be in the $1,000-5,000/month range.
Despite the price, consider the expertise they bring to the table and their experience in various niches. Both are factors to bringing great results to your program.
You can also join an affiliate network where publishers can find your product and promote it on their platforms (blogs, social media, email).
Or, instead of waiting for someone to notice you, you can find and reach out to publishers also signed up in the network. Ask them if they’re interested in advertising your product.
The good thing about these networks is that only approved publishers are allowed to use the network to minimize the risk of fraud. Therefore, you can be sure that all publishers who will promote your links are legit.
Below is a shortlist of affiliate networks you can sign up as an advertiser:
Partnering with affiliates who have a deep understanding of e-commerce (deep website integration and AI included) can be extremely beneficial to your business.
They make the best affiliates out there because they do not only put up promotional material but they use AI to personalize deals for every customer, based on user behavior.
They provide real value to the site’s visitors which increases visitor’s loyalty. Therefore, your potential customers are likely to see the right advertisement at the right time.
However, getting these publishers on board with your program may require you to pay them upfront aside from the commissions they’ll be receiving from every successful sale.
Your arrangement with these publishers will depend on what both of you agree upon. But since you’ll be reaching out to them for this opportunity, publishers have more leverage to hike up the terms to their favor.
A loyalty partner program is not the same as an affiliate program. However, the former could help round out your marketing return on investment, if not your affiliate marketing ROI.
Below are the differences between both:
Unlike affiliates, loyalty partners provide their users with cashback or donate a particular sum of money to the user`s chosen cause.
If you partner up with them, you are likely to get exposure to a big audience (for example, Rakuten has over 8 million users).
Cashback is likely to attract customers who did not decide whether they want to try your brand.
However, the lifetime value of those customers is lower and you never really have them as customers - they are customers of a loyalty partner.
If you’re pushing to sell mobile apps, it makes sense to partner with people in the mobile industry.
And with their help, you can get a slice of the 3.2 billion smartphone users on the planet.
The number of mobile users is growing exponentially every year, so you don’t want to miss such an opportunity.
A good way to do so is to partner with a dominant figure in a mobile ecosystem. Those are usually mobile apps and their functions are related to loyalty partners.
Below are examples of mobile partners you must consider trying:
Make Your Product Easier to Promote
Publishers won’t have a problem promoting the affiliate link of a product they like.
But if you’re new to the scene, you must find a way to quickly warm up with affiliates and give them a reason to advertise your links.
Sometimes, it’s just a matter of providing all the necessary information and assets affiliates will need to sell your product to their audience.
In doing so, you make it convenient for them to run a campaign advertising your product, which in turn helps you increase your ROI.
Below are things you must create and set up on your program to make selling your goods much easier:
- Email templates for drip campaigns - Write templates that advertisers can simply edit to personalize before sending them as a campaign for their email list.
- Embeddable banner ads - Design banner ads in different sizes. People can then just copy and paste the code on their site where they want to show the ad.
- Video walkthroughs - This how-to video content should help educate and inform potential customers about your product.
- Promos and discount codes - Send advertisers codes that they can promote to their audience for greater sales and revenue. It’s advisable to use this tactic at your discretion as to not devalue your product in the long run.
- Assign a dedicated account manager to each affiliate - The manager will provide all the support and help that the affiliate needs to promote the links properly.
Show Affiliate Program Statistics
You can succeed in affiliate marketing only if you know what works and what doesn’t.
This works both ways. Just as much as you must know how much revenue your affiliates have generated over time, affiliates should have an idea about how many people they referred to your product.
And they can only do that if you provide them a dashboard showing data about their historical performance.
There’s a school of thought among some business owners that prefer to hide statistics from affiliates for reasons unknown.
But think about this:
If you send a detailed description of your affiliate`s efficiency to them, they can readjust their campaigns so that it will bring perks to both of you.
Since affiliate marketing is performance-based, publishers are extremely interested in making the program work.
Therefore, it just makes so much sense to share the data with affiliates. The success of your affiliates is your success as well!
Monitor Relevant Metrics And KPIs
To know how well your program is performing, you have to always keep an eye on the relevant metrics and KPIs.
If you analyze the metrics, you can see where the problem is and fix it up so that you ctually increase marketing ROI.
The number of metrics can be quite confusing as there are a lot of them. And because of that, we have prepared a list of relevant KPIs for affiliate marketing that you have to track:
- Percent of Active Affiliates - These are those who generate traffic to your website. Some of the affiliates who joined the program may never be active so you can just delete from the program.
- The number of Top Affiliates and Their Share of Total Sales - Top affiliates are publishers who bring the most attention to your product. By finding out who your top affiliates are and what their share is, you can encourage them to work more closely with you, analyze what strategies they use that perform so well, and look for ways to diversify your top lists by engaging more with other active affiliates.
- Conversion - Conversion means that a user did not only visit your site but had performed a desirable action (a newsletter subscription, purchase, or completion of a questionnaire). By comparing the conversion rate on the website and gaining through the affiliate program specifically, you can understand whether it is worthy to pay for clicks or visits when they do not profit the business at all.
- The number of Sales Actions - It shows the number of sales generated by the program and whether or not the program is worth it. Try to analyze it on different affiliates since some can show good results and some can underperform.
- Return on Ad Spend - It is an essential metric for affiliate programs running ad campaigns, especially if we discuss it in the frame of increasing ROI. You can measure it on the affiliate program as a whole and compare it to other marketing strategies that you use or you can analyze particular affiliates.
- Cost per Click / Cost per Sale - This metric is best analyzed when compared to different marketing channels. For example, does an affiliate program perform better than Instagram/Facebook/Google ads? You should also monitor the performance of each affiliate as it would allow you to optimize your work for the best results. If you see that a certain affiliate is performing better than others, you might consider increasing your budget for them, so they can scale their business and provide you with the bigger among of highly qualified leads next month.
Evaluate Current Program
Over time, you must check on how your entire affiliate program is performing.
Here, you shouldn’t just be looking at how your affiliates are doing — analyzing and measuring your program internally is just as important.
There are two factors you must focus on here. The first is your commission structure. You must calculate whether your current structure is yielding more profit for your business.
If you have products you wish your affiliates should advertise more, consider increasing the commission rates for those items.
Also, for products with high margins — whether they’re selling well or not — boost the commission rates for them too. This allows you to maximize sales and revenue while keeping costs low.
For those considering lower commission rates due to the increase in production costs, find other ways to improve revenue. Increase your marketing budget or the actual price of the product (if necessary).
The last thing you want is for affiliates to stop promoting your product and advertise your competitors due to the lowered fees.
The second factor is your affiliate tracking platform.
If you signed up to ad networks to advertise your goods, you wouldn’t have as much flexibility compared to setting up your affiliate tracking system.
However, regarding the latter, you’d have to manually recruit the affiliates and identify the fraudulent ones from the bunch.
There are pros and cons to both types. But your decision hinges on what you think your business needs the most.
We’ve already enumerated some of the affiliate networks you can join. This time, below are affiliate tracking software you can move to if you want full control of your program:
Affiliate marketing is all about helping your affiliates help you generate more sales.
That’s why you must provide them with all the resources you have so they can advertise and promote your business more effectively.
By following the steps above, you increase your return on investment as your partners get paid — it’s a win-win for both parties!