If you are considering affiliate marketing, finding and converting your audience at scale is a primary goal. However, affiliate marketing is complex and without an abundance of expert resources to optimize the affiliate channel, things can get off track quickly. A critical step towards success is having an acute understanding of the affiliate lifecycle. Having this fundamental knowledge early in the process will all but ensure your success in bringing high-value lifetime customers to your brand.
Before marketers dig into the specifics, it is important to understand what the affiliate lifecycle represents – essentially a series of phases, or steps in a process, all of which dictates the actions brands must take to properly optimize and remove the complexities of the affiliate channel.
It can be broken down into four key components, Identity and Engage, Attribute and Compensate, Optimize and Brand Protection.
We will look into each phase and the critical steps one must take in order to execute each phase properly in order to move forward:
Identify and Engage
This phase really sets the foundation of what affiliate marketing is. Before a brand can expect to see any meaningful returns they must identify the right partners who align with their own philosophy, brand identity, goals and needs.
As potential partners are identified, every brand should vet them by conducting a qualification screening to see who is potentially a good match based on the information available to the brand. As partners emerge from the vetting process the best candidates should be invited to join their program.
Simply having a roster of partners is not enough and affiliate marketers should keep a keen eye on their partner mix. Diversity among the base is key to ensure that an affiliate program is reaching a broad audience. When doing so it is important to remove any bias towards any one particular category. For example, An apparel company may discount the value of coupon and loyalty partners to focus on content and influencers. However, coupon and loyalty partners should be considered as a valuable part of the mix because they may play a big part in driving new customers. Marketers should evaluate their goals and choose the best partners to help meet those goals. Keep an open mind about partner types and eliminate the tendency to be burdened by historical biases.
After establishing the affiliate partner mix, managers should think about reevaluating their partner mix every quarter to ensure they maximize the opportunity to reach their target audience.
Attribute and Compensate
Once the partner mix is established, marketers need to take action to optimize the partnerships by setting commission rates, publisher incentives and attribution models to ensure they are getting the results they desire.
When evaluating compensation payouts marketers should design their payout structure to drive the results they are looking to get out of their affiliate program. They need to understand that there are certain partners who have minimum payout requirements. Also, keep in mind that just because a partner is enrolled in the program it doesn’t mean that they will promote to the fullest extent for the duration of the engagement. It is usually best to dangle a carrot in front of partners to make sure they stay motivated and engaged with the brand.
The next step for any marketer is to review performance in order to optimize the partnerships. This can include looking at benchmarks, trends over time or how a particular partner’s performance compares to others in the program.
To do so every marketer should establish benchmarks in order to determine performance. If marketers don’t have already established benchmarks or don’t know how to structure a performance matrix, there are advanced affiliate solution providers who offer this within their platforms. Antiquated legacy networks do not provide such information thus leaving a void in the lifecycle.
Testing is also a key element as it enables marketers the ability to adjust commissions rates to see if it impacts performance. However, testing during the busy holiday season within the fourth quarter could negatively impact performance. The optimal performance lineup should be established before a brands busy season.
As the program evolves, and a marketer can gauge performance to see which partners are performing well, there are usually opportunities for brands to broaden their engagement with the partners who are delivering results. What started out as a modest partnership to test the waters, could grow into something with multiple layers and points of engagement.
Affiliate marketing is not a set it and forget it channel. Above and beyond performance evaluation and commission structure, marketers also need to protect their brand. They have to check and review the content that their partners are promoting and ensure their products are not mixed in with themes or subjects that are off strategy or not in line with their target audience.
Additionally, brands need to ensure that the way their partners are promoting them adheres to their terms and conditions. This can include which brand keywords a partner can bid on, what types of content can be promoted or restrictions on fraudulent activity. Brands should monitor their partners’ activity on a daily or weekly basis to safeguard their marketing budget and protect their brand integrity.
Brandy safety is a critical element of any marketing strategy and affiliate is no different.
Affiliate marketing can be a complex channel but simply by viewing it through the lens of a lifecycle simplifies the task organization for a marketer. It can become the strongest revenue stream for brands across the digital mix, but first requires a foundation of knowledge and subsequent organization in approach and execution.