Partnerize’s recent event, Partnership Day NYC, served as a meeting of the industry’s best and brightest, examining existing macro conditions and lending expert insight into the critical keys that breed partnership success. As a recap, we’re sharing key takeaways and considerations that can be immediately implement into partnership strategies:
The traditional marketing funnel has flipped.
Keynote Joseph Jaffe discussed The Marketing BowTie™, his take on the marketing funnel’s evolution. Discussing “New Acquisition”, Jaffe explained that marketers must focus more on acknowledgement, dialogue, incentivisation and activation of partners–actions that foster deeper connections with consumers, mutually beneficial successes and true partnerships that lend to profitable growth. And, what’s the secret sauce to tapping into new acquisition? Optimizing full-funnel partnerships. Marketers still relying on last click are hindering their ability to accurately allocate spend, rewarding a single partner at a uniform touchpoint in each click stream. As a result, it’s impossible to equitably reward partners that provide value across the path to purchase–a lack of tracking and payment sophistication that creates a stalemate for growth.
Commission structures aren’t a popularity contest–they’re data based.
What was described as a “slow burn” for the partnerships channel to gain deserved notoriety as a cost-effective customer acquisition method has, without a doubt, impacted the way many marketers implement commission structures–and overreliance on outdated, one-size-fits-all models. Marketers who want to maximize the benefits of the channel must consider partner commission rates on a case-by-case basis, not across programs or general partner types. Leveraging actionable, real-time reporting allows marketers to identify commissioning optimizations that drive to their broader business goals, such as:
- Targeting new markets. Implement commission rules for transactions made in specific regions so that conversions that take place in your targeted region receive a higher payout than those in established markets.
- Increasing basket size. Reward partners based on the attributes of a transaction rather than a more limiting flat rate. For example, a dynamic commissioning structure incents partners to attract high-value customers and purchases by increasing the rate offered for larger basket sizes or revenue thresholds.
- Promoting specific items or categories. Tap partnerships to promote seasonal launches, individual products, luxury products or sale categories by commississioning at the item or category level–reward flexibility that enables marketers to push specific inventory while prioritizing their unit economics.
- Optimizing underperforming partners. Noticing partners that match your audience demographic that are underperforming in reporting? Target these partners with a higher commission rate or flat-fee payment (rewarding a fixed dollar amount per conversion) to incentivize promotion of your brand.
ROAS isn’t the channel’s exclusive success metric.
Affiliate marketing drives a 12:1 return–an outcome that makes the channel a critical component to any marketing mix. Despite the attractive return on ad spend marketers are able to achieve, the channel’s ability to find and convert target audiences at a controlled cost also propel higher lifetime value of customers, enable marketers to tap into high-intent audiences and foster loyalty through avenues that many consumers rely on for news and recommendations. Therefore, when evaluating performance, it’s important to consider not only the short term results, but also the longtail successes driven by partnerships.
Think outside the box when it comes to partner types.
Content, coupon and loyalty partners were mentioned throughout each Partnership Day NYC presentation. While these are key components of a diversified partner makeup, incorporating emerging or non-traditional partners such as social, app-to-app tracking, BNPL (buy now, pay later), crypto-based loyalty sites and others into the mix enables brands to:
- Gain transparency into partner performance. While many brands already have established content partner or influencer relationships beyond their affiliate programs, working with these partners through the partnership channel means that you can garner richer data from their engagement and transactions, improving your ability to make data-driven decisions and optimize the partnerships.
- Pay for performance when it comes to martech vendors. Working with vendors that improve the consumer path to purchase like BNPL, cart abandonment or reengagement solutions? Implement partnership channel tracking to not only gain transparency into the path to purchase for each of their transactions, but incorporate a pay-for-performance model for what may be an otherwise flat-rate contract.
- Reach new audiences. Partners like lolli, the rewards app that provides consumers with bitcoin as cash back, tap into niche audiences at a controlled cost so that you can expand your reach while remaining competitive.
Channel misconceptions still exist.
Despite reaching $9.1B in global spend in 2021, misconceptions surrounding the affiliate channel still exist for many marketers, namely its historic reputation for deal-based traffic. As demonstrated by the Partnership Day NYC presenters and panelists, marketers that overlook the channel due to preconceived notions are forgoing the opportunity to work with leading publications that tap into loyal audiences, influence purchasing decisions and enable brands to stand out among their competitors–success that takes place on a pay-for-performance model.
To learn more about how Partnerize can help you make the most of your partnerships, get in touch at email@example.com.