If you want to grow your business, you need to know how to manage your affiliate marketing. Knowing what you are doing right and what you are doing wrong can make a massive difference to your outcomes. Let’s take a look at different metrics.

Actionable metrics

Companies that have high growth monitor their metrics over 30% more than others. Companies that have very little or no growth tend to examine only baseline metrics like the number of clients acquired that are new.

For example, if you have 35,000 new clients that visit your website in a month, it sounds excellent. However, you need to understand why they visited you, what encouraged them to come and view the products on your site, and how you are best responding. You need to understand the metrics that show you an accurate picture.

To make things easier for you, I’ve got together the metrics that are considered the most valuable and have put them into two primary groups: qualitative and quantitative. Firstly, let’s look at quantitative.

Estimating your affiliate marketing performance

For this, you need to use quantitative metrics. These cover all of the aspects of digital online marketing. These are the most common:

  • CPL (cost per lead)
  • CTR (Click-through rate)
  • Incremental revenue
  • Conversion rate
  • ROI (return on investment)
  • Percentage of fraudulent orders
  • Reversed sales rate

Cost per lead

To measure this, each channel of lead generation used needs to be measured. The amount you’ve spent on expenses for a specific campaign needs to be divided by how many affiliate leads you gained during the campaign. Let’s say you spent $500 on a campaign that was pay-per-sale and converted ten visitors into leads. Your cost per lead would, therefore, be $50.

With the numbers in hand, you can compare campaigns easily.

Incremental revenue

Even though affiliate campaigns increase revenue, they are expensive. You need to prove that they’re worth it by measuring their incremental revenue.

Incremental revenue means money earned from the efforts of one particular affiliate that doesn’t have paid marketing channels (email, organic traffic, SEM), media, or other. In short, it is the money that comes from an affiliate’s unique sales.

To work out incremental revenue, you need to add up the total amount earned (base revenue) for a specific period like a year or a quarter. Next, measure your income after the introduction of the campaign and take away your base revenue. Let’s say you’ve got a clothing business with base revenue of $25,000 per annum. After the adoption of an affiliate program, you earn $27,000. Your incremental revenue is, therefore, $2000.

Click-through rate

This measures how many users click on a link to your site (like an ad) from a third-party website. With CTR, you get to know the links that get the highest amount of clicks. You can then use this to measure how successful your affiliate advertising campaigns are. In terms of average CTR, AdWords has an average of 1.91%.

Conversion rate

This is the percentage of visitors that have come from an affiliate that either fills in a lead generation form or complete a sale. A conversion rate of 2% would mean that 2 of every 100 users either leave their contact details or make a purchase. An average conversion rate is around 2.35%.

Return on investment

This is thought of as the measure that is the most indicative of performance as it gives you information about a marketing campaign’s profitability. To summarize, this informs you how much you get back for every invested dollar.

Let’s say that Jack owns a bar. He chooses to invest $400 with an affiliate strategy. After one year, Jack has earned $500. His ROI, therefore, is ($500-$400)/$500 = $100/$500 or 1:5 or 20%.

Reversed sales rate

This figure tells you how many buyers through an affiliate ask for a refund for their purchase. If a reversed sales rate is 6%, this means that 6 out of 100 orders via an affiliate are canceled.

Now let’s look at the quality of affiliate marketing.

Affiliate behavior

Keep an eye on how your affiliates act concerning your brand – check whether they want quick income.

Affiliate sales fluctuations

Look at the rises and falls in sales. You should notice higher sales in the fall and winter. Don’t focus on vanity metrics.

Vanity metrics

These mean the number of followers, tweets per day, etc. These make people proud but don’t make business better.

Impressions and total visits

Impressions mean how many times, but it doesn’t mean anything in terms of revenue.


About Author

Leave A Reply

Translate »