Discover the key key performance indicators (KPIS) you can use for the affiliate marketing campaigns you run. Find out why they are important.
If you are knowledgeable about marketing, you know how important key performance indicators (KPIs) are in any of your advertising, campaigns and promotions.
In affiliate marketing, KPIs can help you determine whether your affiliate campaign is successful or not. Knowing which key performance indicators to monitor is a vital part of this process. However, some marketers get stuck watching the wrong KPIs that don’t show measurable growth/achievement.
Before we get into the details of what KPIs to track in your affiliate marketing, let’s take a deeper look at what exactly a KPI is in affiliate marketing.
Why are KPIs important for affiliate marketing?
When we talk about KPIs in affiliate marketing, we’re addressing what affiliate marketers will use to track the success of any affiliate marketing campaign. Affiliate marketing KPGs can say a lot about your program, including:
- What should you look for in your overall marketing campaigns?
- Insight into whether your affiliate marketing campaign is running smoothly
- Quantitative history unlike other marketing KPIs that can be emotional
- Success in set goals based on the type of business and what the affiliate campaign focuses on. Increase in sales, increase in customers, brand awareness, etc. can focus.
Now that we know what KPIs in affiliate marketing are, let’s examine the key performance indicators you should focus on in your affiliate marketing campaign.
Affiliate Marketing KPIs to focus on
Whether it’s hiring top affiliate candidates or has quality content to promote, you’ll want to make sure your affiliate marketing program is meeting 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 of a returning customer to 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 type of customers they are through analytics. Using Tapfiliate’s Reporting feature, you will be able to find out who refer your new customers, referral location, what asset is used and even which device.
2. Annual Growth
Then it’s not enough for your affiliate campaign to last a few months. It takes effort throughout the year. That’s why tracking the growth of your affiliate campaign from year to year is an important KPI.
When you watch your affiliate marketing campaign grow year over year, you can:
- See how your sales might fluctuate over the year
- Identify what you do annually/monthly to increase sales and what’s causing stagnation in your campaign
- Make projections for affiliate-based revenue
- Track product demand over the years
In general, certain businesses see more referral sales during certain months of the year than others. For example, holiday gift shops will see higher sales during the holidays than other months.
Here are some things to look for when tracking the growth of your campaign over the years:
- Monthly net sales: This is the average monthly sales you make from referrals on your website. From this KPI, you can set net sales forecasts for the coming months.
- Monthly orders: Track if the number of orders in any given month is increasing, decreasing or stable. The goal is to see a steady increase from year to year. Additionally, you can use this information to set strategies to ensure consistent conversions throughout the year, such as offering bonuses during your slower months.
- Clicks: This is very important when looking at your year-over-year growth as it provides information about your traffic. For example, you may see a decline in clicks from year to year, so you’ll want to see what has changed and how you can adjust – this could be creating new promotional content or finding new channels to promote it.
3. Average Order Value
Another very important performance indicator to monitor is the average order value of your products. A product’s average order value (AOV) goes beyond the number of clicks from an affiliate.
Most brands have a wide range of products with different prices. Affiliates are often able to release lower priced items faster and in larger quantities than more expensive items. This will show that the target audience of the affiliate is ready and engaged to purchase the products they recommend on a regular basis.
Conversely, you may have affiliates where you can launch higher priced products, but not so many – so final sales volume may be low, but AOV may be high. In such cases, these affiliates are incredibly valuable to your campaign as they can direct high-quality leads to products that are more difficult to sell.
Watching the AOV can give you an idea of your top selling products and vice versa.
It can also help you determine commission structures, bonuses and other rewards. For example, you can have a lower base commission for lower order values, while rewarding a higher commission – even a recurring or lifetime commission – on higher value referrals.
4. Performance Per Category
The next KPI to track is performance per category.
It is very important that you analyze your publisher’s performance by different categories. Categories vary but can include: the type of affiliate promotions they use, how they sell for your product, what channels they use, etc.
These data will help you:
- Know what kind of customers you attract and why
- What type of content works best for your brand and product?
- Identify which channels are more effective
Let’s take an example if you’re seeing the most product clicks from video content. This means that your target customers respond better to video content than others (coupon sites, direct email marketing, etc.). With this knowledge, you can devote more marketing resources to the creation of video content, no matter what product you try to push.
Depending on the affiliate segment where you see the most conversions, you can allocate resources to make sure you meet your business goals.
5. Gross Sales and Net Sales
Another important affiliate marketing KPI to track is the difference between your gross sales and net sales. Here is a quick definition:
Gross sales: This is the total number of sales your affiliate campaign generated.
Net sales: This is found by subtracting canceled or returned sales from the total gross sales.
By tracking your gross to net sales, you can:
- Identify problems with your products that you need to fix to reduce the return rate
- Uncover frauds that may have taken root on your system
- Recognize the need to upgrade your logistics system
Basically, if your gross sales are higher than your net sales, there may be a problem somewhere that you seriously need to fix.
6. Clicks and Sales
Finally, monitor your overall clicks for the actual number of sales you make per month. Some affiliate marketers make the mistake of tracking only the total monthly clicks without matching the sales count.
This is incorrect. If there is a big difference between your total monthly clicks and your monthly sales. This also shows:
- Your customers click on products they might be interested in, but the link takes them to a product they don’t want.
- Your products may be reaching the wrong audience
- Your publishers may be doing some kind of scam to increase their clicks.
Whatever the reason, you need to check to make sure your overall monthly clicks are matching or close enough to the number of sales you make in a month.
We hope that with this article, you can monitor critical KPIs in your affiliate marketing campaign. By doing this, you focus your power on what will provide your affiliate marketing campaign with real, numerical data and eliminate unimportant KPIs.