Affiliate Marketing- Factors to consider before approving affiliates and some KPIs

Things to consider before approving an affiliate

·          Appropriate category- check the category in which the website is. It should not be violence, porn etc.

·          Implement a payout threshold- I Ex:-f you make it $1,000, this means to get a payout, an affiliate should earn $1,000 as commission and not generate $1,000 revenue Affiliate should agree to this.

·          As a good practice, payouts should happen after 45-60 days from the date of sale. This will avoid the affiliate fraud if any. Affiliate should agree to this.

·          Avoid auto approval, approve each affiliate manually after scrutiny

·          Get a proper affiliate management software/tool in place before you start your program- like GetCAKE

·          Website stats- monthly hits, unique visitors, site traffic quality, update frequency, relevancy, website optimized for mobile, check the company records, social reputation and other factors

·          What payout model the affiliates prefer and match it with yours, if it is not a fit there will be issues in future. Check things like cookie window, refunds, attribution modeling , tracking and make sure you both mutually agree on what a definition of sale is

·          Super-affiliates- Make sure you have best of the rewards, incentives and commissions for super affiliates. It should be different from the normal affiliates or else super-affiliates will not be interested

·          Check for invalid URLs and invalid websites

·          Banner overload- make sure that the affiliates does not do that, otherwise it will spoil your brand image

·          Search the affiliates URL on Whois.net. Make sure the email address from the sign-up process is a business email and consistent with the registration information from the Whois search.

·          Approval rate- Low approval rate means low quality traffic, do not pay and if problems exists, disapprove the affiliate

·          Refund rate- If refund rate from a particular affiliate is too high, monitor it. It might happen that the affiliate has run the wrong advertising, do not pay and if problems exists, disapprove the affiliate

·          Chargeback rate- This should not be high, if this is high means something is fraudulent. Do not pay and if problems exists, disapprove the affiliate

·          If an affiliate is asking for very low rates, check the website and do the due diligence.

·          Set the following terms and conditions and make sure affiliate agrees to it and sign the paperwork before you initiate- commission, non-commissionable transactions, level based commissions, product based commissions , payouts rates and duration, payment frequency, timings, minimum payment, one time vs recurring commissions differentiation and other key factors

KPIs for Affiliate marketing- [per affiliate]

o    ROAS

o    Average Order value

o    Total transactions

o    New vs returning customers

o    Revenue growth

o    Customer base growth

o    % of sales coming from that particular affiliate

o    EPC- average earnings per one hundred clicks sent by affiliates to the merchant’s website

o    Conversion ratio

o    Reversal rate- % of transactions that affiliates refer to an advertiser get canceled/voided, and hence the commission gets reversed

o    Sales volumes/orders

o    Network KPIs- recruited affiliates, active affiliates, power ranking

o    Cost per sale

o    Average earnings per click

o    Customer Lifetime value

o    Cost per acquisition