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Things to consider before cutting your affiliate program spend

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It’s officially been announced that we are headed into an economic recession. As marketers, you’d be forgiven for thinking that now is the time to tighten your campaign budgets. Your initial thoughts may be leaning towards cutting your affiliate program and limiting or reducing your commissions.

However, there are some things you should think about before actioning these, as they potentially damage your brand's reputation and your performance delivery over the short term.

Let’s take a closer look at what you should think about before you re-evaluate your spending in the affiliate channel in line with current market forces:

1. Be aware of your competitors

When considering if you want to cut your commission, you always have to consider that your competitors are still going to be waiting in the wings. If you cut a little too much, there is always a chance that your affiliates will instead simply move to another program. If you are determined to cut your commissions, you also need to think about other aspects of your brand impact. Which affiliates will you limit and what traffic sources does this affect for you?

The impact and perception of your brand as a program provider in terms of trust and reputable dealings are also incredibly important. Affiliates have fought hard to be considered a valuable member of the supply chain. Making major changes like this can impact their livelihood, and communicating changes clearly and transparently are often just as important as the change itself.

You should also be aware of what your competitors are doing. There are many tools that allow you to track and monitor your competitors’ traffic. By doing so you can understand what affiliates are key traffic driving sources for them and manage your budgets accordingly. Even if you have to cut commission costs, you can still offer alternative incentive or support service and keep communications clear on when and how these decisions could change again.

2. Make small temporary amendments

Can your current acquisition budget be restructured rather than axed? It might be possible for you to improve things short-term without having to actually make program cuts that affect your partner commissions.

For example, you could look at your marketing mix and not keep paying to be in first position on a site, but request to move down to position three or four during leaner times. Alternatively, look to pursue alternative traffic avenues that could further your reach but might not be as expensive. Push notification and native traffic campaigns might be something to look at, as well as using affiliates as influencers instead of paying for fixed real estate or high cost CPAs or, worse, cutting relationships all together.

Take a broader look into some of the affiliates outside of the verticals you currently operate in. Though you might have discounted them in the past, there could now be a brilliant chance for you to reach out to a new niche customer source.

3. Keep your friends close and your affiliates closer

There might be an underlying issue in the way that your company is currently structured, and a reorganization could be just what is needed to elevate things to the standards you need. Use your data to perform a full and detailed affiliate program audit. Analyze your current active partners compared to the other digital channels that you are currently spending on and manage your budgets according to where you’ll garner the best reach. Affiliates are adept at building niche audiences and they know how to influence customers online. Leverage this to your advantage.

You also need to consider your current program management culture. This is an incredibly important part of running a successful affiliate program. Relationships matter, now and longer term, so work now to improve the way your affiliates perceive your program and understand your business constraints, and allow them to help you overcome tougher climates. They see the market differently to how you would and can provide valuable insight that you wouldn’t get elsewhere. An exchange of information and expertise could be just the thing to help boost both of you. Always try to push something beyond a strict monetary transaction as this can help to leverage your standing with them.

And so, in conclusion...

Remember that your revenue and spend will always go hand in hand. Are your current partners bringing value in some way and not just there for volume? Cutting affiliate commissions should always be the last step you take. There are so many other paths you could choose that could bolster your brand instead. With a little revaluation of your structure performance and channel reach, you might end up in a better position without making a single cut to your affiliate spend.

If you’re really stuck for fresh ideas on how to grow your affiliate program right now, download this free guide: 15 ways to Rapidly Grow your Affiliate Program.

Lee-Ann Johnstone is the chief executive officer at Lee-Ann Johnstone.

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