Growth of the affiliate marketing program is currently at around 27 percent per year globally, according to Social Media Today, with countries like the United States and the United Kingdom leading the way.
In dollars, it's an industry sitting at around $12 billion. However, as we often tell our students at Legendary Marketer, money should not be the primary driver for you becoming an affiliate. Your motivation should fall to what you believe in, find useful, or makes you happy.
In the following article, we'll share the 10 key performance indicators you should watch for in any affiliate marketing program. Let's begin!
1. What the Program Pays You For
Generally, there are two ways you could be earning money whenever you act as an affiliate. No matter the product or service, it boils down to this: sale or lead. Some programs also offer a hybrid model that will pay you for both.
In our opinion, the best affiliate marketing programs give you more ways to earn, but you can achieve success through either method. Of course, the sales-only approach will pay you just for conversion (i.e., when there's an actual transfer of money from the consumer).
Earning for the leads you bring in doesn't come with as much pressure but typically doesn't deliver as big of a payout. We challenge our students to get clarity on their strengths, weaknesses, and preferences before beginning.
2. How Payouts Are Distributed
As you weigh the question of what is the best affiliate marketing program, cash flow should be of key importance. That means considering how payouts will be distributed before planning to spend your time and energy promoting a product.
Some questions we recommend asking yourself: how often do checks go out? Will you earn an ongoing commission or a one-time payout? Get the answers to questions like these on the front end so you can build a viable strategy.
3. Number and Type of Products
Many affiliate marketing programs for beginners will keep it simple: one product, one revenue source. Ideally, you will get into a flow where these types of programs will appear as limiting to you as they are.
The only way to advance as a professional affiliate marketer, and the Legendary Marketer way, is to find ways to maximize the revenue of the people you bring into the fold. It's simple, really.
Earn more off each individual, and you don't have to work as hard on advertising, marketing, and content creation to drive traffic (though make no mistake, those things remain very important).
4. How Retargeting Works
As you compare affiliate marketing programs, be laser-focused in your questions. One of the “inside baseball” questions we challenge our students to ask is about retargeting.
Retargeting is a form of marketing where the site places a “cookie” on its website that will then track that user to other sites across the web offering additional marketing for a set period of time. It's a viable way to increase conversion rates, but it also comes across as a little creepy to the consumer, so expect changes in the year ahead with how search engines treat this practice.
We're encouraging our students to keep an eye on this as it develops. You'll want to know how much life and distance your affiliate link will have in it.
5. Ease of Promotion
Legitimate affiliate marketing programs give you the tools you need to succeed. They don't just turn you loose into a no man's land.
Investigate the materials these programs will provide you for connecting your traffic to their product or service. Look for materials that are inoffensive, attention-grabbing, and easy to incorporate into the flow of your website.
6. Refund Policies
Many affiliate programs will have refund policies to go along with their products. Particularly with informational products, we've found, a generous policy is a great way of converting a lead to a sale. See, consumers usually live with the cost of their buying decisions even when not completely satisfied.
Knowing they can get their money back if something isn't to their liking is enough assurance to go through with the sale. They just don't always follow through on that power.
As an affiliate marketer, your concern should be what happens if they do? Check the program's policy ahead of time to see whether you lose money on the refund (likely, you will). Also, ask the program to provide data on how often refunds are requested.
At Legendary Marketer, refunds are rare so providing that data to our affiliates isn't a problem. Some programs aren't quite as trustworthy, however, so protect yourselves.
7. Where You Are in the Funnel
Most programs consist of sales funnels. At the top of the funnel, you have the tire-kickers who are weighing their interest. In the middle, there are interested leads who want to know more.
In the narrow part of the funnel, you have customers who are ready to pay or need support after their purchase. Learn where you are in the funnel as an affiliate. Furthermore, learn if there are opportunities for you to earn throughout.
Hybrid opportunities might pay you one rate for bringing in tire-kickers, another for hot leads, and still another for sales conversions. As an affiliate, it's important to have that awareness before you begin.
8. How Many Referrals End Up Making a Purchase
Another key performance indicator to watch out for is the referral to buyer ratio. In other words, how many people usually visit a website or show interest versus how many open their wallets?
Knowing this number will give you concrete data on what it will take to make a viable income off the affiliate marketing program itself. If there are multiple potential revenue streams, don't forget to get the ratio for each.
9. What Your Costs Will Be
Affiliate marketers generally will have to pour money into their efforts if they want to see the needle move. It takes money to start, build, and manage a website that does a lot of traffic.
Those costs come in the form of domain purchases, hosting fees, content creation, and promotion. How much will you need to spend to get the types of numbers necessary for turning the affiliate marketing program profitable?
10. Where You Can Do Business
Finally, what are the rules of the road? Where can you post links? Which products are restricted by region?
The last thing you want to do is place all your eggs in a basket that is illegal in the countries you wish to promote. On the same note, you don't want to pour money into a marketing strategy that is off-limits on the social network where you plan on doing most of your promotion.
Figure out the where's and how's of doing business. Then, build your action plan around what works and what is accepted.
Choosing the Right Affiliate Marketing Program Is Your Most Important Decision
We hope this will help you choose an affiliate marketing program that's right for you. After all, it really is your most important decision.
Would you like to find a profitable business you can do from home so you can bring in much more substantial income? If so, I recommend you watch this free video which will walk you through our #1 recommended way to earn money online from home.