As
affiliate programmes mature, so marketers shift their focus to more qualitative
measurements in order to determine success.
One such
metric is the split of new versus existing customers that affiliates drive,
with the data proving a popular performance indicator for advertisers. While
many brands have been keen to monitor this split behind the scenes, there have
been some recent high profile cases whereby advertisers have reduced the
commission rates offered for existing customers.
With this
in mind, it’s important to examine the issue and how best to reward affiliates
based on this measurement.
What
constitutes a new customer will vary for each advertiser and sector. For
example some will classify this as someone who has never purchased before while
others will stipulate that anyone who hasn’t purchased for a period of 12
months or more should be classified as a new customer.
In addition
to the classification of new customers, the length of time an advertiser has
traded online will impact their share of new customers. As time passes there
will invariably be a tipping point at which it is no longer possible to
maintain such a high share of sales from new customers.
With only
a finite amount of customers, is reducing commission for existing customers
counter intuitive? Shouldn’t advertisers also understand the additional value
that can be attributed to retaining and nurturing its existing customer base?
In this
white paper we consider how affiliates are able to help drive new customers as
well as alternatives to lowering commission rates for existing customers.
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