Flipping the funnel to deliver a more robust affiliate marketing program

All signs point to this new era of affiliate marketing being here to stay, though many brands have questions and lack direction on the strategy needed to drive successful execution. PMG helps our customers approach affiliate marketing by ‘flipping the funnel’ and diversifying their programs, but what does that mean, what does it entail and how can brands put it into action?

Set program goals that align with business objectives

The first step to ensuring an affiliate program is set up for success is establishing clear goals and KPIs. Affiliate program goals can range from driving revenue to new customer acquisition and generating brand awareness. Affiliate marketing is often used to achieve multiple goals. Though regardless of the KPIs set forth, it’s important that program goals align not only with the channel’s objectives but with overall business KPIs as well.

Historically, affiliate marketing programs were hyperfocused on driving revenue, which often meant the program, while considered a success, was also paying hefty commissions for sales. In this new era, brands that take a closer look at incremental lift opportunities, new customer acquisition trends and other metrics beyond strictly revenue-driving KPIs will be best positioned to use affiliates as a strategic lever that offsets rising customer acquisition costs 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 bottom-of-the-funnel discounting and couponing partnerships. These partnerships certainly have their place in the affiliate ecosystem, but when a handful of these partners are driving the majority of program revenue, it’s time to take a closer look at new ways to drive incremental value to the program. Brands that only rely on a small number of discount, coupon and cash-back partners have ample opportunity to diversify their partnership strategy and, in turn, affiliate marketing’s revenue streams. This is especially true for brands that are moving toward a less promotional strategy or are ‘full-price’ brands.

To best diversify partnerships, it’s important to ensure that commission and attribution strategies align with the interests of mid- and upper-funnel partners. The traditional last-click model of affiliate marketing programs restricts the scale of diversified partnerships, especially as it relates to content and influencer partners. Luckily, today’s affiliate technology providers allow for a comprehensive mix of attribution and commissioning strategies that can help successfully scale new partnerships, assuring that different partner verticals are adequately rewarded for the role they play on 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 optimize existing partnerships to activate new growth strategies and opportunities. Partnerships within a program should be evaluated and audited on a consistent basis. This is also relevant to affiliate technology providers, including platforms such as Impact, Partnerize and Awin. Affiliate marketing, and the technology supporting, is rapidly changing, and it’s essential that brands are taking advantage of what they have at their disposal to scale the efficiency and effectiveness.

Let the data guide you

If you’re not looking at the true incremental value of your affiliate marketing program, you should be. There are a number of ways to do this, but brand marketers need to first determine what the true ROI and incremental value of their partnerships and program are to their overall business. The ‘set it and forget’ days of affiliate marketing are long gone, and there’s no time like the present to ensure your brand is following newfound best practices and is 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 reimagine how affiliate marketing programs can play a greater role in engaging loyal customers and connecting with new audiences, we’re likely to see more retailers reimagine their loyalty programs by flipping the funnel, with affiliate strategies at the center of their larger marketing efforts. Brands that align affiliate program goals with business objectives, and diversify their partnerships while optimizing existing ones, will be best positioned to take advantage of the benefits of affiliate marketing now and in the future.