Top Affiliate Marketing KPIs to Focus On
If you are familiar with marketing, you know how vital key performance indicators (KPI) are in any of the ads, campaigns, and promotions you perform.
In affiliate marketing, KPIs can help you determine if the affiliate campaign you are running is successful or not. Knowing what key performance indicators to monitor is a vital part of this process. However, some marketers get stuck monitoring the wrong KPIs that don’t show any measurable growth/success.
Before we go into details on what KPIs to monitor in your affiliate marketing, let’s take a more in-depth look into what exactly KPI is in affiliate marketing.
What is a KPI in affiliate marketing?
When we talk about KPIs in affiliate marketing, we are addressing the things affiliate marketers will use to track the success of any affiliate marketing campaign. Affiliate marketing KPIs can tell a lot about your program, including:
- What to look for in your overall marketing campaigns
- Insight into if your affiliate marketing campaign is going smoothly or not
- Quantitative date, as opposed to other marketing KPIs that can be emotive
- Success on set goals, which are dependent on the type of business and what the affiliate campaign focuses on. It could focus on sales increase, customer increase, brand recognition, etc.
Now that we know what KPIs in affiliate marketing are, let’s delve into the key performance indicators you need to focus on in your affiliate marketing campaign.
Affiliate Marketing KPIs to Focus on
Whether it be recruiting top affiliate prospects or having quality content to promote, you’ll want to make sure your affiliate marketing program is hitting the mark on key KPIs.
1. Percentage of New Customers
First, focus on the percentage of new customers coming from your affiliate program.
Why not focus on both new and returning customers? While we love the loyalty that a returning customer could have for your brand, new customers gained through your affiliate marketing program show that the program is growing. Growth equals success.
You can track the percentage of new customers and what kind of customers they are through analytics. Using Tapfiliate’s Reporting feature, you’ll be able to find who referred your new customers, referral location, what asset was used, and even what device.
2. Growth Year-on-Year
Next, it’s not enough for your affiliate campaign to last a few months. It needs to strive year on year. That’s why tracking the growth of your affiliate campaign year on year is an important KPI.
When you monitor the year over year growth of your affiliate marketing campaign you can:
- See how your sales could fluctuate over the year
- Pinpoint the things you did yearly/monthly to increase sales, and things that created stagnation in your campaign
- Make projections for affiliate-driven revenue
- Track product demand over the years
Generally, certain businesses see more referral sales in certain months of the year than others. For example, holiday gift shops will see higher sales during the holiday months than in other months.
Here are some things to look for when tracking your campaign growth over the years:
- Net sales per month: This is the average sales you made on your website per month from referrals. From this KPI, you can set net sales projections for the upcoming months.
- The number of orders per month: Track if the number of orders for any given month sees an increase, decrease, or constant. The goal is to see a steady year-over-year increase. Additionally, you can use these insights to set strategies to ensure steady conversions throughout the year — such as offering bonus during your slower months.
- Clicks: This is very important when looking at your year over year growth as it provides insight to your traffic. For instance, you might find a decline in clicks compared to the year, so you’ll want to see what changed and how you can adjust — this could be creating new promotional content or finding new channels to promote on.
3. Average Order Value
Another very important key performance indicator to monitor is the average order value of your products. The average order value (AOV) of a product goes beyond the number of clicks that come from an affiliate.
Most brands have a wide array of products with varying prices. Affiliates are usually able to push out the lower-priced products faster, and in larger quantities than the more expensive products. This will show that the affiliate’s audience is engaged and ready to buy products that they recommend on a regular basis.
In contrast, you may have affiliates you are able to push out higher-priced products but not as many — so the final volume of sales may be low but the AOV could be high. In cases like this, these affiliates are incredibly valuable to your campaign because they are able to refer high-quality leads to harder-to-sell products.
Monitoring AOV can also give you an insight into your top-selling products and vice versa.
This can also help you with setting commission structures, bonuses and other rewards. For example, you may reward a higher commission — or even recurring or lifetime commission — on high value referrals, while having a lower base commission for lower order values.
4. Performance per Category
The next KPI to keep track of is performance per category.
It is essential to analyze your publisher’s performance into different categories. Categories will vary but can include: the type of affiliate promotions they are using, how they make sales for your product, what channels they use, etc.
This data will help you:
- Know what kind of customers you are attracting and why
- What type of content works best for your brand and product
- Pinpoint what channels are more effective
Let’s take an example if you see the most product clicks from the video content. This means that your target customers react better to video content than any others (coupon sites, direct email marketing, etc.). With this knowledge, you can distribute more marketing resources into the creation of video content on whatever product you are trying to push.
You can allocate resources to ensure you meet your business’s goals depending on which affiliate segment you see the most conversion.
5) Gross Sales vs. Net Sales
Another vital affiliate marketing KPI to monitor is the difference between your gross sales and your net sales. Here is a quick definition:
Gross sales: This is the total number of sales your affiliate campaign generates
Net sales: This is the total number of gross sales minus the canceled or returned sales
By monitoring your gross to net sales, you can:
- Identify issues in your products that you need to correct to reduce the return rate
- Uncover frauds that may be rooted in your system
- Recognize a need to upgrade your logistics
Basically, if your gross sales are higher than your net sales, there could be a problem somewhere you seriously need to rectify.
6) Clicks vs. Number of Sales
Finally, monitor your overall clicks to the actual number of sales you make per month. Some affiliate marketers make the mistake of tracking just the total clicks per month without matching it to the number of sales.
This is faulty. If there is a huge disparity between your overall monthly clicks and your monthly sales. This shows that either:
- Your customers are clicking on products they might be interested in, but the link is taking them to a product they don’t want.
- Your products may be getting in front of the wrong audience
- Your publishers may be performing some form of fraud to boost their number of clicks.
Whatever the reason, you need to check to make sure that the overall monthly clicks match, or is close enough to the number of sales you make in a month.
With this article, we hope you can monitor the critical KPIs in your affiliate marketing campaign. By doing this, you focus your strength on what will give you factual, numeric data into your affiliate marketing campaign and do away with unimportant KPIs.