As an affiliate manager, educating my clients and program participants is a large part of what I do. Over the years, these three questions seem to come up over and over:
What percentage of overall E-commerce revenue should my affiliate program be?
- How will I know if my affiliate program is cannibalizing existing sales?
- I have a love/hate relationship with my affiliate program. Is this normal?
- My answer to the last questions is a resounding, “NO, this is not normal!”
If you have been asking yourself any of these questions, and/or if you’re having mixed feelings about your affiliate program, it may be time for an Affiliate Program Checkup. Below are the four vitals I check when reviewing an affiliate program.
Test Your Affiliate Program for Parasites
What is a parasite affiliate? My personal definition: any affiliate who does not add value to your sales cycle or brand. The industry standard definition is an affiliate who creates passive clicks, meaning the customer does not engage with the affiliate to activate the cookie. An example would be a toolbar the consumer adds to their browser that automatically drops cookies as the consumer browses online stores.
A parasite will drain any affiliate program. Not only do parasites cannibalize sales, they deter strong content affiliates from participating in your program because they know their commission will be hijacked.
Solution? Remove all toolbar affiliates.
New Customer Pulse
Your affiliate program should be generating new customers rather than guiding returning ones. If you are not passing the new customer increase parameter be sure to work with your network and technical team to integrate. Knowledge is power.
Take Your Measurements
Do you have reporting in place to view last click, conversion rates and point of entry within the sales cycle? This data will give you insight into the influence and impact your affiliate has on the consumer. It also provides clues to determining if a parasite affiliate is in your program. Use these four metrics to help determine your programs’ vitality.
- Are sales coming through without a referring URL? While a blank referral URL is not always a problem, it can be warning sign of unethical traffic. A quick email to the affiliate will quickly lead you to your answer.
- If you don’t have access to the referring URL, you need to get it. This information is crucial for diagnosis. Networks such as Shareasale and Avantlink make this information readily available.
- Do some of your affiliates have significantly higher conversion rates than your main site? A moderate increase between the two can often be attributed to targeted traffic. However, if your conversion rate is 3% and your affiliates’ conversion rate is 65%, you need to do some investigating.
- Are your Terms and Conditions clear? If your program includes search engine marketing affiliates that are allowed to bid on trademarks, your affiliate program can represent 30-40% of your revenue. This is not a strategy I recommend but some merchants do not want to invest in their own trademark campaigns.
- Do you have an aggressive coupon strategy? When using a coupon strategy, my programs range between 20-30% of affiliate revenue peaking during special promotions or high-traffic seasons such as the back to school or the holidays. If you’re not sure which coupon strategy is best for your program, read my post To Coupon Or Not To Coupon.
For my content affiliate only programs, affiliates represent 5-15% of revenue. However, these programs’ metrics show the highest level of new customers and engagement.
In short, do not focus on percentages as much as having a solid strategy and analytic approach. The percentage of revenue will depend on your strategy. The analysis will determine if your strategy is working.
Proactive Health Efforts For Your Affiliate Program
Practicing good health means regular recruitment. A good dose of targeted and personalized recruitment can prevent your program from ever getting sick. It is important to have diversity and freshness of affiliate in your program.
Now that you’ve reviewed the affiliate program health metrics, how did your program fair? Does it need immediate attention? I would love to speak with you to see if Robbins Interactive is a good fit to get your program back into shape. I work with wellness, health and fitness merchants. Click here to see how we can work together.