8 Distinct KIPs for ...

The measurable value showing the progress towards achieving a defined business goal is said to be the key performance indicator. In affiliate marketing, KPIs stand out to be the measurable value attached to a particular objective of a very affiliate marketing campaign. Here, the KPIs are the progress indicative factors when a campaign is run. These help in measuring the effectiveness when the campaign comes to an end, or else for some time when the campaign had been running.

The KPIs in affiliate marketing is partly different from that of standard marketing metrics. Being progress-oriented, the KPIs display the performance related to certain projects and campaigns. The marketing metrics numbers are to be consistently tracked for understanding the marketing campaigns status, and also whether they are aiding in meeting the KPIs and business goals.

Here are the main 8 Key Performance Indicators to be tracked for understanding the success of affiliate marketing programs.

1. Conversion Rate – (Clicks ÷ Total Number of Sales)

A huge count of marketers and affiliate program managers seem to get caught only on clicks. Clicks indicate the interested visitors, so they are indeed great. At the same time, sales should be prioritized, whose track must never be lost.

By tracking the conversion rates, the effectiveness of a click's aftermath can be analyzed. There might be a lot of clicks, but not sufficient sales – a situation that purely means the marketing assets should be focused post-clicks. The creative ad copies and all contents generating the click from the affiliate needs focus when the clicks are lacking and the conversion rate is good.

2. Cost Per Action (CPA)

What are the actions the customers should take? Actions could mean lead-generating actions such as downloading a PDF, filling out an enquiry form, or else asking for a free quote. Even a sale or a conversion is likely to be an action. Often Pay Per Click (PPC) and Cost Per Click (CPC) are confused with CPA. The distinction is made from the ground that PPC and CPC are for measuring traffic while CPA is for measuring sales and leads. Comparing the CPA to the commission helps in assessing the profitability.

3. Average Order Value (AOV) – (Revenue ÷ Number of Orders)

Comparing the AOV of a website to that of the affiliate channel show how the affiliate channel is driving value. While some affiliates are fast at driving value, others can drive volume with great effectiveness. They need to be rewarded accordingly!

4. The Percentage of New Customers

All the businesses are dependent on acquiring new customers, and the ability of the affiliate at driving new customer acquisition state the value they hold in the affiliate marketing program over time. Offering a higher commission to the affiliates to generate new customers besides repeating the customers is the best way for increasing the new customer rate.

5. Chargeback Rate (Gross Sales ÷ Net Sales)

When the customers are suspecting fraud or any unauthorized activity taking place on their credit card, then they are sure to initiate chargebacks. With the chargeback rate being above 1%, then the situation is serious. Then dealing with the matter is essential to find out the additional affiliate fraud signs, as the customers feel misled through the affiliate's marketing efforts.

6. Revenue Per Segment

Who is performing better? The cashback affiliates or the content publishers? One segment might show good response through verticals, offers and products, while another segment might be functional through some other strategy. For maximizing ROI for the overall affiliate program, spending for the good-performing segments should be increased, and a better fit must be planned for the struggling segment.

7. Incremental Revenue From the Affiliate Marketers

One of the strongest indicators of the program's status is the revenue earned from the new customer sales as the affiliates have driven. It brings up the bigger picture and places the price tag on the channel's value to the business. The proof is in the procedure when the value of the affiliate program has to be shown.

8. Percentage of Affiliate Sales VS. Overall Sales

To measure the program's success in context, this is the best metric. Comparing the percentage of sales driven by affiliates to the overall company sales is a convincing justification for the program's success. When the affiliates-driven sales percentage comes closer to the other marketing channel, the program is indeed valuable.

In affiliate marketing, KPIs are crucial since they are rather helpful at defining business goals, the patch for reaching the goals and how should the path be optimized. Creating strategic affiliate marketing and assessing marketing results would not be possible without KPIs. Deciding the KPIs with the proposed campaigns and goals, help in better using them for monitoring performance, analyzing results and showing how valuable the work is.