Affiliate marketing programs are playing an increasingly important role in engaging loyal customers and connecting with new audiences. Alison Rinaldi, Director of Affiliate Marketing at PMG, explains why it’s likely we could start to see more retailers reinvent their loyalty programs by flipping the funnel.
Affiliate marketing has recently undergone a digital transformation as more and more brand marketers turn to affiliate programs to drive mid-to-top performance, new customer acquisition, and greater brand awareness. of the brand. While affiliate marketing has traditionally been viewed as a bottom-of-funnel strategy, with a focus on coupons, discounts, cashback offers, and loyalty partnerships, new technological advancements have repositioned affiliate marketing. affiliation as a strategic lever to reach new customers under a cost per acquisition structure. In recent months, major brands have reinvented their affiliate programs to provide customers with new deals, better deals, and a new and improved customer retention experience, repositioning affiliate marketing.
All signs indicate that this new era of affiliate marketing is here to stay, even though many brands have questions and lack guidance on the strategy needed for successful execution. PMG helps our clients approach affiliate marketing by “flipping the funnel” and diversifying their programs, but what does it mean, what does it involve and how can brands do it? enforce ?
Set program goals that align with business goals
The first step to ensuring an affiliate program is set up for success is to establish clear goals and KPIs. Affiliate program goals can range from revenue generation to new customer acquisition and brand awareness. Affiliate marketing is often used to achieve multiple goals. Although no matter what KPIs are set, it is important that program goals align not only with channel goals, but also with overall business KPIs.
Historically, affiliate marketing programs were focused on generating revenue, which often meant that the program, while considered successful, also paid hefty commissions on sales. In this new era, brands that take a closer look at incremental growth opportunities, new customer acquisition trends, and other metrics beyond strictly revenue-driving KPIs will be in the best position to use affiliates as a strategic lever that compensates for the rising cost of acquiring customers in other channels.
Diversify your partnership mix
One look across the industry, and it’s easy to see that many affiliate marketing programs have become overly reliant on discount and couponing partnerships at the bottom of the funnel. These partnerships certainly have their place in the affiliate ecosystem, but when a handful of these partners generate the majority of the program’s revenue, it’s time to take a closer look at new ways to generate additional value for the program. . Brands that rely on only a small number of rebate, coupon, and cashback partners have ample opportunity to diversify their partnership strategy and, therefore, affiliate marketing revenue streams. This is especially true for brands that are moving towards a less promotional strategy or are “full price” brands.
To best diversify partnerships, it is important to ensure that commission and attribution strategies align with the interests of middle and upper funnel partners. The traditional last-click model of affiliate marketing programs limits the scale of diverse partnerships, especially when it comes to content and influencer partners. Fortunately, today’s affiliate technology providers enable a comprehensive combination of attribution and commissioning strategies that can help successfully grow new partnerships, ensuring that the various partner verticals are properly rewarded for the role they play in a consumer’s path to purchase.
Optimize existing partnerships
As important as it is to diversify your program’s partner mix with new partners, it’s equally important to leverage existing partnerships to enable new growth strategies and opportunities. Partnerships within a program should be consistently assessed and audited. This also applies to affiliate technology providers, including platforms such as Impact, Partnerize and Awin. Affiliate marketing and the technology that supports it are changing rapidly, and it’s essential that brands take advantage of what they have to increase effectiveness and efficiency.
Let the data guide you
If you’re not looking to add real value to your affiliate marketing program, you should be. There are many ways to do this, but brand marketers must first determine what the true ROI and incremental value of their partnerships and program is to their overall business. The days of “set and forget” affiliate marketing are long gone, and there’s no better time than the present to ensure your brand is following best practices and equipped with the data and strategy to leverage the full potential of affiliate marketing to drive the highest possible return on investment.
As more brands reinvent how affiliate marketing programs can play a bigger role in engaging loyal customers and connecting with new audiences, we’re likely to see more retailers reinvent their affiliate marketing programs. loyalty by flipping the funnel, with affiliate strategies at the center of their broader marketing. efforts. Brands that align affiliate program goals with business goals and diversify their partnerships while leveraging existing partnerships will be in the best position to realize the benefits of affiliate marketing now and in the future.