Recently, Partnerize is launching our new Retail Partnership Benchmarking Tool, which enables partner and affiliate marketers to benchmark their own partner and affiliate program metrics against crowdsourced industry averages. By inputting just a few affiliate marketing metrics from their existing programs, marketers can leverage our new online tool to juxtapose each key metric with averaged data from other major partner and affiliate marketers. These comparisons can provide marketers insight into where their program performance stands versus the retail affiliate industry at large.
Want to know what a good affiliate marketing conversion rate is? We cover that answer here.
If you want to see how yours compares to similar retailers, use the affiliate benchmarking tool here.
THE PARTNER AND AFFILIATE BENCHMARKS TOOL
This new partner and affiliate benchmarking tool is intended as an aid to both omnichannel and online-only retailers active in these fast-growing spaces. Future editions of the benchmarker will support advertisers in other verticals.
This exciting new offering provides marketers with a dynamically generated, highly customized analysis of how their brand’s partner and affiliate marketing campaign performance compares. This report on a brand’s partner and affiliate marketing channels shows how the respondent’s answers jibe with the average of all retail respondents who have already taken the benchmarker. We’ve designed the report to be a genuine aid to more effective program management and strategy.
To create the at-launch comparison data for the strategic benchmarking tool, Partnerize worked with more than 100 companies that volunteered to provide their partner and affiliate digital marketing metrics anonymously to power averages for the tool. Individual retailer performance will never be shared, sold, or revealed to others. We also referenced a 2018 survey that we conducted to ensure our benchmarker metrics provide an accurate picture of how well major programs perform. Individual brands’ performance metrics are kept confidential.
The individualized benchmarking survey report also provides marketing insights on what factors contribute to higher or lower performance experience on the key financial and other measures examined. For example, the analysis reveals how the specific products marketed by a retailer, or the retailer’s specific trading area, can impact affiliate sales results. Key performance data analyzed by the tool include:
- Percentage of Total Digital Sales Driven by Partner Programs: To calculate this, advertisers first take a look at their total online sales. How much of this total is attributed back to partnerships and affiliate-driven sales? For example, if a business made $500,000 in total online sales and transactions via partnerships/affiliates made up $100,000 of that mix, then partnership would be reported as the driver for 20% of total digital sales.
- Number of Partners in Their Partnership Programs: Best practices process here is to count the total number of partners that are active in the revenue partnerships/affiliate program. By active we mean that they are reporting conversions and other data in the previous month. In our analysis, we explain the ramifications of various partner recruitment strategies on data.
- Return on Ad Spend for the Partnership Channel: Calculated by taking the total revenue driven by the partner and affiliate marketing campaigns divided by the total of commissions, network or platform costs, for those marketing campaigns.
- Average Percent of Revenue Paid As Commission to Partners: Calculated by averaging the bounty you pay for a conversion and dividing it by the average basket size for the partnership program. This financial benchmarking helps marketers understand the relative “generosity” of their program. Naturally, gross margin of goods sold will be a key driver of this metric.
- Average Conversion Rate for Partner Marketing Activity: This is calculated by dividing the number of conversions by the number of clicks on partner marketing campaign ads and links. Our analysis also explains the potential impact that having a lot of content partners can have on a brand’s click/referral traffic conversion rate.
- Share of Partner-Driven Purchases Made to New Customers: Here we want to understand, of the total purchases driven by a partnership program, how many were made to people who have never made a purchase with that retail before. The process to calculate this is to divide total net new buyer purchases by total purchases. Customer acquisition programs are very popular in our industry, as is interest in incrementality.
Because most retailers focus on purchases rather than mid-funnel metrics like lead generation and recurring payments, we have concentrated primarily on retail sales and related metrics.
CROWDSOURCED RETAIL PARTNERSHIP BENCHMARKING BENCHMARKS: The metrics in this platform are crowdsourced, meaning that they will change with industry e-commerce trends as more and more people fill out the Retail Partnership Benchmarking experience.
The core intent is to enable members of the community to help each other. Brands are invited to participate regardless of which network or platform products and services they use. In short, we wanted to create a tool that was valuable whether or not the participating brand is a Partnerize customer.
Our goal over time is to get enough respondents for the Benchmarking Tool so that we can make different versions of the metrics reporting and analysis for different regions and types of retailers. If interest in the offering is strong, we will also launch one for affiliate partners and influencers later in the year.
GIVE IT A TRY
We are very proud and excited to offer these benchmarking services to the industry. We hope it helps strategic retail marketers set future performance goals that improve their business outcomes. Special thanks to our outstanding creative team for making the usage process and overall user experience so strong and intuitive. Please give this competitive benchmark tool a whirl and let us know what you think at contact@partnerize.com.
What is an Affiliate Marketing Conversion Rate?
Your affiliate marketing conversion rate is the number of sales (or leads) divided by the number of clicks you received through your affiliate program multiplied by 100%. The calculation would look like this:
The Number Affiliate Program Conversions ÷ The Number of Affiliate Program Clicks x 100%
Your affiliate program’s conversion rate should matter as much as your total number of sales. This affiliate marketing KPI assesses the effectiveness of your landing pages and the persuasive power of your affiliates’ call-to-actions. A high conversion rate indicates streamlined user experiences and a finely tuned sales funnel.
You can gauge your affiliate program’s conversion benchmarks by comparing your conversion rate against your industry’s average. We recently shared conversion rate benchmarks by industry here.
So What is a Good Affiliate Marketing Conversion Rate?
- 4-8% is considered to be a good conversion rate benchmark for your affiliate marketing efforts.
For retailers who focus on bottom-of-the-funnel tactics, we often see conversion rates in the 4-8% range. However, the right conversion rate varies considerably based on your program objectives, the extent to which you focus on upfunnel versus bottom-funnel partners, the price of the goods you sell, and the character of those goods. But having a figure higher or lower than that is not necessarily a bad thing.
For example, luxury retailers often see lower conversion rates. After all, it can be harder for a consumer to pull the trigger on a $1000 purchase than a $10 purchase. We also often see well-established “brick and click” retailers getting higher conversion rates than new, online-only retailers. We also see higher conversion rates in the US and EMEA than in Asia, though that varies by sub-region. Regions with much lower instances of credit card ownership also often see lower conversion rates. Another important determinant of conversion rate is the extent to which you develop programs for new versus existing customers. Existing customers tend to convert at much higher rates than new ones.
Perhaps the most important learning here is to carefully monitor your conversion rates by region, partner class, individual partner, and even product category and item. That sort of granular analysis is why we offer our clients the option to track unlimited parameters like department, SKU, region and any other relevant metric they choose.
Finally, we all want to increase our conversion rates, no matter how high or low they are. Why not check out this free Affiliate Marketing Best Practices Checklist to uncover ways to drive a higher conversion rate?
