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 whitepaper we consider how affiliates are able to help drive new customers as well as alternatives to lowering commission rates for existing customers.
Download a copy of this whitepaper here.