Assessing the Quality of Customers through the affiliate channel
From Wiki
Tracking the customer journey beyond the last click has long been a key goal for marketers. In the second part of the series looking at how advertisers can use data to improve their affiliate campaign, Matt Swan, Client Strategist at Awin, turns his focus turns to monitor the quality of customers driven through the channel.
One of the key metrics for the advertiser that we examined is contribution – this is how much customers are spending with this advertiser and is measured when the customer first signs up, and again after a six month period. This can fluctuate over time as customers add/remove additional products and packages.
This metric was broken down by the various affiliate promotional types, and interestingly, each of them showed that customer value has increased over time.
It was also possible to measure the contribution of customers driven through the affiliate channel against their other channels (again, when the customer first signed up and then again after six months). The affiliate channel was measured against the rest of online and the advertiser’s other routes to market – including through a call centre and in retail stores.
On activation, the affiliate channel has a higher contribution than online in general, demonstrating that affiliates are able to effectively up sell on their sites before sending the customer through to purchase from the advertiser. It is some way below the other routes to market but when you consider these customers will be dealing with a salesperson (either on the phone or face to face) this is not too surprising.
Where this gets interesting is looking at the contribution after a six month period. The contribution of customers referred through the affiliate channel and online in general increases, while all other routes to market go down in value. This indicates that customers delivered through the affiliate channel are highly valuable and more likely to add additional products/packages over time.
Churn
An additional value metric for this advertiser is churn – or how many people are cancelling their subscriptions. Again, each of the promotional types has shown a lower churn than all other routes to market.
A myth that is commonly associated with cashback sites is that they drive poor value customers, but as well as driving highly profitable customers as they demonstrate with their contribution, they also display the ability to drive customers that stay with the advertiser in the long-term.
As well as looking at the affiliate promotional type, it is important to look at affiliates on an individual basis. For example, an affiliate may have a high contribution value but also a high churn rate.
The chart below looks at how the various cashback sites on the programme perform in terms of the two key metrics
Affiliate E has demonstrated the ability to drive valuable customers in terms of contribution, yet the churn rate is well above average. If we compare this to affiliate F, this affiliate is also able to drive valuable customers in terms of contribution, and also has an extremely low churn rate. They are able to deliver profitable customers that stay with the advertiser for the long-term. It is important to consider the volume that is being driven as well as the metrics mentioned above to understand the affiliates that are able to add the most value. The advertiser has been able to look at this data and reward affiliates on an individual basis to reflect the quality of customers that are being driven, as well as the influence they have had on sales beyond purely being the final click.