Regardless of the industry, affiliate marketing can be hard to manage and scale.
Luckily, like any other digital channel, also affiliate marketing gives you tangible metrics to track and data-based reporting that puts us in a position to better evaluate success and ROI.
The criteria used to assess affiliate sales growth are similar to those used to assess the effectiveness of other online acquisition platforms such as SEO, paid search, social media, and email marketing. Simultaneously, incorporating the affiliate channel into your digital marketing success dashboard and estimating the client acquisition cost can help you define your marketing mix’s objectives and resource management.
Here is a quick guide at estimating affiliate marketing success:
- Clicks (or outbound clicks if you are an affiliate with a blog)
- Number of leads
- Number of sales/ purchases
- Revenue per affiliate
- Number of active affiliates
- Cost per lead
- Conversion rate
The amount of clicks reveals how well your product is promoted through affiliate networks. A large number of clicks leading to a limited number of purchases, or even no transactions, might indicate faulty affiliate monitoring, a lack of affinity between the audience and your items, or a mismatch between the promoted ad and the landing page.
Number of leads
The number of completed leads is no less important than the number of clicks. If you get many clicks and no leads, it’s a signal that something is not working as intended. Maybe your traffic is not targeted for that niche or your tracking system is faulty. Also, having a large number of leads and no (or few) sales might indicate the traffic is not of very high quality
Number of sales
The amount of sales made is just as important as the income generated by sales. Independent of the money linked with it, the number of sales effectively indicates the pace of new client acquisition.
Revenue per affiliate
The revenue per affiliate allows you to understand which affiliate is the most performing, which makes it eligible for special offers and commission increases. It can be calculated by the number of sales per affiliate times the average sale value.
Number of active affiliates
The very first step is to clarify what you mean by “active affiliates.” This can be defined as affiliates who generate clicks — or, alternately, affiliates who generate revenues — over a set period of time. Typically, a three-month period is taken into account.
Cost per lead
The cost per lead is essentially the number of leads divided by the revenue. For example, if you make £100,000 in revenue and have 346 leads, your cost per lead is £289 (100,000/346).
This can be useful to assess whether your conversions costs are too high.
This metric is common to every channel, as is the cost per lead. The conversion rate applied to affiliate traffic, one of the most often used KPIs in e-commerce, will illustrate the efficacy of individual affiliates as well as the performance of this channel in comparison to others. Very high rates (>20%) might indicate that the affiliate’s traffic has a strong affinity for your market or that they are using dubious promotional tactics.
The power of conversion can’t be overlooked. An email marketing study from Codecrew shows that for every $92 spent on acquiring a customer, brands will spend only $1 to convert them.
Affiliate Marketing Guide Content
- How to become an affiliate marketer– the complete guide that includes also Amazon Associates
- 41 Best affiliate programs reviewed and compared, then broke down into niches: hosting, VPN, cloud storage, SEO, landing page and many more.
- 13 Best toolsfor tracking affiliate marketing sales – reviewed and compared
- Affiliate Marketing Strategy – why your strategy is more than just Amazon Associates
- Case Study + Guide: how to monetize a blog with affiliate SEO
- How to become a Fiverr Affiliate – a complete guide
- New places where to advertise your affiliate links
- 14 affiliate websites examplesto inspire you and motivate you
- Case study: example of a software review that ranks on page 1 on Google within 3 weeks of publication
- Seven affiliate marketing metrics that you actually need plus a dashboard template included for free (no email required).
- How to build a product comparison website.