You may not realize it, but as a retail trader, you probably segment customers. This can be formal, for example, when your preferred customers receive preferential treatment. It can also be informally, for example, in all those instances where you give a friendly wave to your regulars or get them a drink. Segmentation is simply the ways of knowing your customer base so that your resources can be assigned accordingly.
It is also a practice that you can apply to your affiliate marketing methods. In the same way that your different customer types need different service levels, your various affiliates will need different resources.
A great way of segmenting your base of affiliates is through marketing methods. Separate them by deal and coupon affiliates, search engine market people, mobile affiliates and content sites, for example. In this article, we are going to have a look at two parts: content sites and deal and coupon affiliates as these are the two most common.
Deal and Coupon Affiliates
In your launching of an affiliate package, you will probably see that most transactions come to you via deal and coupon sites such as couponmountain.com or shopping-bargains.com. This is usual for new affiliate programs. This is simply because these types of deal and coupon sites are designed with template platforms. Essentially, an affiliate needs to upload your tracking link and banner to their website. It does not usually involve much customization when a new deal is launched on a deal and coupon site. It’s pretty straight forward for a deal site using a template to add your banner and the link.
Lots of retailers become a little alarmed at first as they think that this affiliate channel only helps to bring in customers who want discounts. However, what they don’t realize is that many customers visit these sites to see what deals are available. They are much more likely to buy something spontaneously if they see it has a discounted price.
A subsidiary of deal and coupon affiliates is an incentive site. These sites award things like points, mileage, cash, and other rewards for completing purchases. They are challenging to work in partnership with as there is always a loyalty scheme in place. If you did get new customers from incentive sites, the future purchases that the customers make are more likely to be through the site offering the incentive as the customer will always want their reward or points, for example. Given that you are to have to pay an affiliate commission on their future purchase too, their value over their lifetime is lower to you. Don’t just write them off. Retails have explained before that this type of customer does tend to buy things more often than others and usually buy more expensive items than those who don’t receive any incentive.
So, when you manage your deal and coupon sites, managers of affiliate programs need to focus on controlling their spending in marketing. For example, if a company offers you a retail item for $10, you need to assume that there will be 2% commission payable and this would leave you $8 in revenue, net. If there’s a customer coupon on top worth $2, you are going to end up getting just $6. You need to be mindful that your customers gained in this way might cost you more. This cost needs to be compared with the customer’s long term value.
Content Sites
These sites span a considerable spectrum: online communities to mommy bloggers. These sites draw in readers, not customers. But, they are hugely valuable because they exert influence over what people go on to buy (such as Instagram’ influencers’).
These sites draw in readers who like the topic content, and many are focussed on a specific topic area. If customers are looking for a particular product online, it is likely that they will end up clicking an affiliate content site even if your website is higher up the search engine rankings. This is often because potential customers want more information than you can offer on your site. They are looking for a peer to peer information.
As a result, these content sites are an essential part of your affiliate methods. Their needs differ from the deal and coupon sites though. The affiliate composes the post themselves and adds in tracking links, and this, therefore, takes them more time. It might, therefore, take longer for you to see any sales as a result of an affiliate content post.
To help things along a little, you need to give affiliate content sites details about any sales that you are having so that they can spread the word at the appropriate time and plan when they’re going to post. Some retailers do worry about the leaking of sales before they’re officially launched, and this could, in theory, reduce the gains as customers may delay their purchases as a result. You, therefore, need to put an embargo stating that commission will not be forthcoming if they disclose something they shouldn’t.
Next month, we will look at discussing the resources that you can offer to help find mobile affiliates to get that significant revenue.
