Maximising your budget for luxury Affiliate Programs
Make your investment work harder
Here at Silverbean, we believe that there is no ‘one size fits all’ when it comes to affiliate programs, and this is especially the case for those in the luxury sphere. Whatever the budget, it is important to make your investment in affiliate programs work as hard as possible.
We have managed luxury affiliate programs for clients such as premier beauty brand Charlotte Tilbury, cashmere specialist N.Peal, British eveningwear designer Amanda Wakeley, and designer accessory retailer, MONNIER Frères. Through our experience in the luxury sector, we have developed several simple yet highly effective methods to ensure your budget can be maximised to deliver the best possible return on investment through an affiliate channel.
Map out the customer journey
Taking the time to assess your customer journey, and the value of each step along this journey, will allow you to create a smart and strategic commission structure that makes the most of the money paid out in commissions through your affiliate program.
Should a publisher having an impact at the beginning of the customer journey place the same demands on your budget as those at the very end? Content focused sites are more often than not the catalyst for the journey to purchase, but cashback and voucher sites may very well close the deal in purchasing with one merchant as opposed to a competitor.
The implementation of tracking that distinguishes between new and existing customers can be highly beneficial to an affiliate program within the luxury sector, particularly for those in the business of selling products that require repeated purchase, such as fragrance or beauty. This tracking process allows for commissions to be altered based on the customer’s value to the brand, with reduced commissions for returning customers (who are likely to convert anyway). Commission levels can then be adjusted to reward new customers to the brand, persuading them into purchasing for the first time and then hopefully returning in the future, thus increasing the lifetime value.
Plug the gaps
Discount codes are likely to be used sparingly within luxury retailer affiliate programs, but they can still contribute to building a strong mix of affiliate types within your program, and can generate significant revenue during key trading periods.
In order to decrease the Cost of Sale (CoS) on sales generated using promotional codes, it is important to review other aspects of the program that these could affect. This will support in effectively ‘plugging the gaps’ that can unnecessarily effect the cost of running promotions and discounts.
Restricting the granting of cashback commissions against purchases that use a voucher code prevents the customer from taking advantage of ‘double-discounting’, in turn reducing the CoS to your brand, and working towards ensuring any budget allocated to supporting exposure sees the best possible return. Some brands choose to decline commissions on these type of sales altogether, although, in order to maintain good relationships, consider reducing the commission rate to cashback sites when a voucher code is used. This way you are saving money and still getting a sale, as well as reaching a wide audience via this publisher.
We also recommend reducing the Cost Per Acquisition (CPA) for voucher code sites on your program, since this type of affiliate generally has to work less to secure a sale, as opposed to, for example, a content site producing an article that engages and educates the consumer. The content site can then be awarded a higher CPA for any sales they generate, or, alternatively a proportionate commission model could be implemented, whereby “initiators” still receive a small reward when they have helped to influence a sale, even though they are not the last click publisher. It is also important to collect product data via affiliate tracking, and, where possible, implement strategic commission strategies based on which products you want to push via various affiliates across the user journey. These tactics will all help towards developing fruitful relationships with your publishers, supporting them to include your brand in on-site exposures, articles and posts in the future.
Allocate budget wisely and understand objectives
Understanding the objectives for your program will help to ensure that you are maximising the return on investment. When working with luxury merchants, ensuring a solid return on investment can be a key concern, and often an obstacle when it comes to obtaining sign-off on this kind of activity.
It is important to consider the aim of the activity in order to correctly measure the return. Spending budget on building awareness of the brand, or specific launches, may not always result in instant spikes in revenue. The long-term benefits of introducing the brand to a new audience and educating users on the brand, however, should not be discounted, and measuring return on attention (through traffic, social likes and comments, for example) may be an ideal metric to assess success.
Use your budget wisely, and utilise possible gifting opportunities to bring new eyes to the brand, thereby only paying cost price for your own products plus postage, minimising the financial investment in this objective.
If, however, your aim is to increase revenue, you will need to carefully select the right type of publisher to work with. Taking the time to closely review a content creator’s previous work can be invaluable in reducing the risk of a disappointing return. Look at which – if any – of your competitors have chosen to work with them or their peers previously, and investigate their reach and engagement levels.
Obtaining as much information as possible is key to successful budget allocation. Any influencer or blogger should be happy to provide detailed information to a brand willing to spend budget in collaborating with them. Tools such as Buzzsumo and Phlanx can also help in this research and are often invaluable tools in the arsenal of any affiliate or outreach campaign manager.
Finally, it is important to understand the ways in which influencers have chosen to monetise their content; have third party influencer networks (with generally larger commission requirements) been used, or is there scope to utilise direct links to your affiliate program? When revenue is the key objective of the activity, information is key!
Effectively manage resources
Managing the resource on your campaign and ensuring that your team’s time is spent wisely is crucial in making your affiliate budget work effectively.
Recruiting and sourcing publishers who can support your brand can often be one of the most time-consuming tasks on a program. Content publishers/ influencers are an important part of the affiliate mix, and this is increasingly where we see luxury brands shift their focus. To address this, we at Silverbean streamline this process through recruitment and gap analysis tools such as Publisher Discovery.
We have used this type of tool to reduce the time invested in sourcing publishers as it generates site reports based on phrases used, as well as offering an insight into competitor programs and the publishers displaying their links.
Utilising tools and platforms such as these can help to manage your time and budget effectively, streamlining the processes that will help to drive your revenue and affiliate program forward.
Using the right tools and processes can support you in meeting your objectives and ensuring that your budget works hard for you. By carefully planning and measuring your commission-based activity, you can ensure you are getting the most income for your outgoings, without devaluing a luxury brand.
Want to know more about how to maximise your budget for affiliate programs? Get in touch with our team today.