Updated in November, 2020
In our world, numbers matter and our actions need to be measured so we have a sense of where we are in our mission to find our path to success. As a result, it is no wonder that companies set goals and use key performance indicators (KPIs) to track performance over time.
Affiliate marketing KPIs, above all, need to be aligned with your company’s industry profile and match your business goals to achieve an effective measurement of your digital strategy’s progress. Just looking at the US market, experts predict 8.2 $billion for 2022 affiliate marketing spending based on a Statista study, so the potential is huge.
Let’s say you’ve just launched your affiliate program, either in-house or with affiliate networks. There are a few performance marketing KPIs you should keep in mind when measuring your program’s success.
The affiliate performance that you see right away is typically linked to your overall brand performance. If your brand name is very popular or your sales volumes are high, your program’s impact will probably be proportionally strong. However, the affiliate channel is by far the most convenient way to expand your business and increase your revenue with minimal investment. Specifically, when referring to eCommerce companies that rely on digital marketing channels to drive sales and revenue, it is stated that performance marketing is vital to eCommerce growth.
To keep affiliate sales going based on more than just your initial brand value, pay attention to the following affiliate marketing metrics.
1. Active Affiliates
Your business type will determine whether “active affiliates” means affiliates generating leads, clicks, or sales. To find out your active affiliates rate, just divide the number of active affiliates by the total number of affiliates.
Active affiliates rate = # of active affiliates/ total # of affiliates
If the result is higher than 10%, you have targeted the right affiliates and traffic for your program. To increase the number of active affiliates, you should regularly run activation campaigns for your dormant affiliates (typically considered to be the affiliates that didn’t generate any clicks or sales in the past six months to one year).
Tip: You can always find valuable resources looking at what other companies managed to achieve with the relevant set of affiliate marketing metrics.
Learn 5 Affiliate Marketing Tips from AVS4YOU.
2. Program Adoption
Consider the affiliates who are actively promoting your brand, product, or service, and have generated at least one link to promote you or have a minimum of one click. How fond of your product are these affiliates?
Remember that not all affiliates apply to your program just because they love your product and genuinely want to promote your name. Many affiliates choose your brand primarily because of high commissions or other offers. Measure your affiliates’ affinity with your market by periodically analyzing if they are really engaging in promoting your products and if they actually address the market you want to get traffic from.
Tip: Program adoption affiliate marketing metric is particularly relevant for any affiliate program disregarding the stage of their business life cycle.
Learn how the Avangate Affiliate Network helped SysTools get 7% additional revenue
3. Rising Stars
These are affiliates that currently generate low volumes in your program but have potential to grow. Measure the number of your rising stars affiliates and engage with them individually to help them reach a new level in your program.
Don’t hesitate to directly contact any affiliates that you see have potential to grow the business. Make offers, adapt your program to their needs, and provide all the materials they need to get your products in front of the right audience. Additionally, organize contests for these affiliates or incentivize them with special bonuses for reaching specific thresholds, such as number of sales, total volumes, or commission amount.
Tip: Create and update datasheets to follow the progress of your affiliates, measuring the number of clicks directed to their traffic channels, number of orders, affiliate sales volumes, and ROI.
4. Affiliate Sales Fluctuations
Pay attention to your sales fluctuations, particularly when they tend to drop or when you notice a rise. Usually, sales will be high during fall and winter, the global shopping seasons, and will drop during spring and summer.
Make sure to incentivize your affiliates even more during dormant periods and always double-check sales fluctuations as these may indicate you need to fix a technical problem, your affiliates need help promoting your products, or a competitor came out with a better offer. Measure changes, find the cause, and take action to get the best results.
Tip: Pay attention to high seasonal promotional campaigns such as Cyber Monday or Black Friday to fully take advantage of showcasing your star offers in front of the affiliates.
Check out our Winter Sale Contest to learn more about the design of a seasonal promotional campaign.
5. Number of Dormant or Lapsed Affiliates
From time to time, make sure to send dedicated emails to your dormant affiliates to remind them of your most recent contest or campaign and to encourage them to join in, even offering a discount or a bonus if they do.
Rewards usually work when trying to activate this category. Periodically, get rid of your lapsed or hard-bounce accounts. A broken email address means you will not be able to contact the leads, which will lower your email deliverability rate.
Tip: Don’t neglect your affiliates, and constantly run nurturing activation programs through email marketing.
6. Conversion rate
This is the handiest way to get a glimpse of your affiliate program success. Just take the number of conversions you have and divide it by the number of clicks per respective product or link.
Conversion rate = # of conversions/ # of clicks per respective product or link
Increase your conversion rate by constantly updating your products’ creatives, making special deals, or offering discount coupons. Always check the technical aspects of promoting a product, verify the shopping cart, and make sure that the buying process is as easy and intuitive as possible. Basically, if you encounter any difficulty when trying to buy your product from any kind of device, your customers will, too, so fix these problems as soon as possible.
Tip: Test and trace your affiliate program tracking links, and simulate and troubleshoot the end customer experience to add value to the buying process overall.
Average order value is another important metric to look after in your program. The higher the AOV, the higher your ROI (return on investment) and the more you get out of every customer you have, meaning you maximize every penny spent on acquiring those customers in the first place.
Source – Smile.io
Find the AOV by dividing the total sales volume in a given period of time by the total number of orders registered in the same timeframe. AOV is closely linked to another metric, Lifetime Revenue per Visitor (LRV), which measures how much your client spends on your product or brand on average. Develop strategies to retain customers, such as sending occasional reminders or product updates and asking for feedback.
Tip: Performance marketing follows eCommerce business closely and AOV is directly corelated to your revenue and profitability.
8. Number of sales
Obviously, you should have a satisfactory number of sales in a given period of time. Even if your product is very expensive, selling it only once a month means you are not doing everything you can to get the business going.
Boost your affiliate revenue by revamping your products and making your affiliates happy with special deals and fresh creatives – and don’t forget about the end customer!
Tip: Get in front of the affiliates with your presence on marketplace listings that suit your business vertical to leverage your affiliate program visibility and boost your number of sales.
9. Incremental sales
Compared with your other distribution channels, how much business does your affiliate program generate? If you take care of your affiliate program, you’ll typically observe a decrease in the total spend involved in promoting your products (especially in the case of physical products) and an increase in ROI.
So there you have it – nine key metrics to track if you want to improve your affiliate program. Did we miss anything? What’s your favorite affiliate metric?
Find out more on how you can increase your affiliate sales. To help you better reach audiences, get in touch with our Affiliate Management team at email@example.com.