As an affiliate marketer, it is no longer enough to establish a solid affiliate marketing campaign. You must track a series of key performance indicators on a regular basis and ensure results are in line with your predetermined goals and metrics. Continue reading to find out how.
Revenue may be one of the most obvious KPIs, but it is commonly disregarded. With a growing number of affiliate marketers fixated by engagement metrics, revenue does not tend to rank highly on their list of priorities. However, targeted traffic may actually hold greater value for you and your affiliate marketing campaign than more traffic. If clickthroughs are not translating to sales, your entire campaign could be rendered unsuccessful from the very onset. Advertising may affect user experience and site speed, but this impact is negligible compared to the additional revenue it could yield for you and your affiliate marketing campaign.
Measuring clicks is a great way to uncover how effective your affiliate marketing campaign is. As well as revealing how much exposure your goods and services are receiving, it can also build brand awareness. Clicks can also be analysed against net monthly sales to determine the percentage of clicks that convert to sales. If there is a significant difference between the two, you may need to adjust your affiliate marketing campaign going forward. Small and up-and-coming companies may prioritise clicks over another KPI as it can indicate brand awareness and growth. These factors are crucial for emerging businesses.
Customer lifetime value
Customer lifetime value, or LTV, is the measure of a customer’s worth to a business over a prolonged period of time. It can help you determine how much you are willing to spend on acquiring a new customer. It is a common myth that if the cost of a new customer is greater than the cost of their first purchase, the lead generation cost is too high. However, if that customer continues to make additional purchases over time, this can negate any initial costs. As a result, long-term customers are more valuable to a business than one-time shoppers.
Growth is another important KPI for affiliate marketers. It can, however, be one of the most difficult to measure. If you compare unequal data, your results may be inaccurate. For example, comparing sales during the summer to sales during the winter will not paint an exact picture of the growth of the business during that financial year as a whole. Instead, compare sales within the same or similar time period. To calculate growth, subtract your current period’s revenue from the revenue of the previous period. These timeframes must be equal in length. You must then divide the difference by the revenue from the first period and multiple the number by 100.
Average order value
Average order value, or AOV, is the measure of how much each customer spends on average. It is a great way to determine whether or not you are marketing to your intended target audience. It is especially important if you market a wide range of goods and services at several different price points. Average order value can also determine which products are the greatest sellers and which are least favoured by customers. If the average order value is growing over time, your affiliate marketing campaign is successful. If the average order value is declining or has come to a halt, you may need to adjust your affiliate marketing campaign to optimise sales going forward.
A growing number of affiliate marketers are prioritising conversion rate over other KPIs. With no knowledge of your affiliate marketing campaign’s conversion rate, it can be difficult to determine whether or not it is driving sales. A low conversion rate can indicate an underlying problem with your affiliate marketing campaign. A high conversion rate, on the other hand, points to a solid affiliate marketing campaign with effective advertising tactics. This can generate greater profits and strengthen customer relations. To enhance conversion rates, focus on website design and useability, checkout experience, and pricing.
Organic traffic is a benchmark for success as an affiliate marketer. If your campaign is suffering from low earnings per click, you must focus on multiplying your organic traffic sources. The best way to do this is to curate engaging content that consumers can relate to and will encourage them to find out more. Incorporating a number of keywords can also boost your SEO rankings and lead to greater brand awareness.
In order to establish a successful affiliate marketing campaign that is guaranteed to build brand awareness and drive sales, you much track a number of KPIs on a regular basis over time. These include revenue, clicks, customer lifetime value, growth, average order value, conversion rate, and organic traffic.