Are you curious as to how your brand can get more Return on Investment (ROI) from promotions and promotional activities? One of the most common goals advertisers have for their affiliate programs is finding effective and efficient ways to improve ROI.
As of April 2021, digital coupon redemption surpassed in-store print coupons for the first time ever. In Q4 of 2020, 69% of shoppers reported that coupons affected their buying decisions, and 86% of Baby Boomers and 94% of Generation Xers reported that personalized coupons and promotions made them more likely to enroll in a store's loyalty program. Younger shoppers are also more likely to use digital coupons, with 88% of millennials indicating use. From these numbers alone, it's clear that deals and offers are a huge driver in consumer behavior.
Affiliate marketing is heavily driven by deals and offers, but because of competitors, brands are having to work much harder to make promotions profitable. Here are five ways that brands can increase ROI with their promotions and deals through the affiliate channel.
1. Know Your Total Promotional Costs
In order to get a true ROI, it's important to understand all of the efforts and costs associated with the marketing tactics—from promo codes, to cashback offers, to affiliate commissions. By keeping track of each tactic going into the promotional campaign, you can negate risk and get the most revenue as possible out of that promotion. Once a campaign has been fully leveraged, it's time to maximize the effectiveness of the promotion. It's also important to recap the efforts after the campaign ends and learn from the tactics that did and did not work. Testing is always critical to improve for next time.
2. Adopt a Data-Led Approach
Brands are starting to adopt more of a data-led approach in the industry by relying heavily on meaningful, regular market benchmarks. Brands and their affiliate program management agencies should consistently be looking at their program data when it comes to developing strategy. At Acceleration Partners, we publish a quarterly benchmark report for our clients to ensure we are transparent with how their vertical is performing compared to other similar brands.
This also means brands should try to pass along any rich datasets, including customer insights at the partner level, to their affiliate agencies if they want to see more of a data-centric strategy. The more data a brand can share, the better. This will also give brands a better grasp on the nuances of the affiliate channel and the value being driven by each type of affiliate.
3. Leverage Value from Different Partners
At Acceleration Partners, we believe that all partner types are super critical, and that's because of the consumer journey. It takes multiple touchpoints for a consumer to decide. For example, if your brand is thinking about adding a mass media placement that could cost over $30,000, you might not see that last-click ROI effort from that particular package. But if you look at the whole affiliate marketing channel picture, you'll see that multiple affiliate partners are influencing the consumer's decision to make a conversion.
We also work with a variety of different clients—some have an average order size between $2,500-$3,000, while others typically sell items around $25. Regardless of order size, there's still a decision that has to be made by the consumer to ultimately convert. With the right partners in your program, that conversion becomes more likely. Coupons can help with that conversion, and it's always important to look at coupon-based partners as part of the ROI that leads consumers to conversion much faster
4. Personalize Your Promotions
Customer centricity is one of the most important tools for ensuring ROI. At Acceleration Partners, one thing that we often do to create personalization is test different ways to incentivize specific types of customers a brand wants to target. For example, if a brand's best customers are drawn to a certain product, then we work with our affiliate partners to really push that product page.
To create personalized promotions, brands also need to know their target audience, and which ones are coming through the affiliate channel. Having this specific data will enable a brand and their agency to optimize their program and adjust to reach their desired audiences.
Another best practice brands should implement is consistently re-evaluating who their target audience is. Just within the last year there have been some major e-commerce shifts, particularly with retailers trying to recapture their in-store customers online. By clearly knowing your audience, you can work closely with each affiliate on how you're going to engage and attract those consumers.
5. Create Sustainable Growth
One notable change we've seen coming out of the pandemic is how widely affiliate marketing is being fed into by brands. Thanks to its pay-on-performance model, it truly has a seat at the marketing table. It's important now more than ever for brands to recognize and leverage how deals and promotions through the affiliate channel can create sustainable ROI growth.
Event and short-term promotions are still critical—those weekends of big sales can drive large spikes in traffic. However, brands should also utilize evergreen offers, which will help reach target audiences and continue to incentivize consumers to keep coming back. These different types of promotions can increase ROI for brands throughout the year, not just seasonally.
The affiliate channel is a great way to increase ROI through promotions and deals, as brands have truly been able to see their money back on returns. The best way your brand can continue to deliver better ROI from your promotions and deals is by partnering with your internal teams to really understand the data, and then test those insights. Try new things in the affiliate marketing channel—take advantage of the lower risk this channel provides.
Finally, be transparent and clear about what you want to achieve in the affiliate channel and with each affiliate partner. Be open to changing your tactics when you're listening to where the data is leading you, and communicate often with your partners—both internally and externally.