Affiliate Marketing KPIs

Affiliate Marketing KPI’s

KPI stands for key performance indicators. It’s one of the key metrics that are essential to plan success in your affiliate marketing program. Different businesses use different KPIs to measure the success of their affiliate marketing program.

Why Is It Necessary to Set KPIs in Affiliate Marketing?

If you want to get a better insight into the performance of your affiliate marketing program, then it’s important to identify the key KPIs. Without a set of KPIs, it’s almost impossible to understand how well your marketing strategy is working. We recommend you spend some time looking through the affiliate marketing KPIs to see what is important to you.

As mentioned above, different companies focus on different aspects of their campaigns with most keeping a close eye on return on investment (ROI) and cost per action (CPA). Usually, after picking KPIs, expert affiliate marketers set a certain number for each indicator and work towards achieving that number. Down below, we are going to give you a few examples of important KPIs that are commonly used in affiliate marketing.

Click Traffic

This metric is a good measure of… just about everything. It measures how many clicks you are getting over a certain period of time. The good thing about analyzing this metric is that it doesn’t require you to have a great budget. The results are pretty straightforward and easy to analyze/digest. If the number of clicks has been slowly dropping over a period of time, you might have to look at other factors that are causing this decline in clicks. Here’s a list of questions that need to be answered in order to best analyze click traffic:

·         Who generates the most click traffic?

·         Is the traffic converting into anything?

·         What can be done to improve click traffic?

Net Orders, Gross Orders

Gross Orders is the gross number of orders for a business. It usually refers to all orders placed through an affiliate program. Net Orders is the gross orders minus order cancellations. For example, if you have 80,000 orders, but 2,000 orders were canceled, then net orders would be 78,000. These metrics are both incredibly important and help you find out what kind of affiliates and marketing campaigns are actually driving sales. It’s also important to look at yearly variations and changes. Perhaps you will notice that the number of orders dwindles after an obvious peak. This is usually when you know that something needs to change.

For example, maybe you’re marketing on Facebook to a different audience or you need to focus on the quality of your traffic. Perhaps the numbers have increased substantially because of a new product launch. Or perhaps net orders are low because of a disappointing marketing campaign. It’s important to analyze the data because the data can help guide future decisions.

Affiliate Commissions

Commissions is the sum of money that you pay to the affiliates in exchange for a successful conversion. This way, you can figure out the profitability of your affiliate marketing program. The best-case scenario for every marketing campaign is to make sure that everyone is making money. That will surely keep everyone happy. High commissions will surely attract more affiliates to your program. A low commission may lead to affiliates not being happy with the amount that they are being paid. Knowing the profitability of your affiliate marketing program is a must if you want to maximize your profits in the long run.

Top-Ten Affiliates

With the internet, we now have access to a wide array of data. Some of it can be very useful and helpful. While other data can be very misleading and vague. Make no mistake about it – the list of top ten affiliates is as straightforward as it gets. There’s nothing misleading about a list of your affiliates that drive the highest percentage of your sales. The best part about ranking top-ten is that it’s simple and you can’t argue with it.

Affiliate’s Performance

Determining the effectiveness of your affiliate program is critical. You should want to track your program’s performance to determine the real drivers of revenue and growth. You want to find out which affiliates are performing the best and tracking their performance will tell you if this is an area that you need to focus on. If your affiliates aren’t consistently driving the revenue, then you might need to give them a bigger budget for marketing or perhaps replace them. There are just so many things that you can do in order to adjust and re-adjust the performance. For instance, sometimes you just need to educate your affiliates on the things that make your product stand out.

Rate of Conversion

It certainly is one of the most important metrics out there. There are many businesses out there that insist that conversion rate is the only metric that matters. While it’s a controversial statement in and of itself, you can’t deny the fact that there’s some truth to it. At the end of the day, it’s all about conversion and what converts. This KPI needs to be analyzed thoroughly and with regards to context, date, and other important factors that influence one of the most important metrics in all of affiliate marketing. You will have to have a VERY clear idea of why your conversion rate is increasing or dropping at any given point in time. Certainly, you can use the conversion data to formulate a clear action plan and the best part about this KPI is that you can see the improvements almost right away.

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