How Affiliate Became the Second Paid Revenue Stream in 6 Months

Note from Geno Prussakov: Ladies and gentlemen, below you may find the first guest post by our newest guest blogger, Adrian Horvat, who has contributed the below case study.

Vola.ro is the biggest online travel agency in Romania. The business grew very fast from €115,000 turnover in 2007 to €5,300,000 in 2010 and €55,000,000 turnover in 2016 but, the affiliate program did not follow this growth rate at all.

In 2015, the airline market value grew by 15% due to the rapid expansion of air travel routes and also because of the very poor road conditions and the underdevelopment of other means of travel, such as train or bus networks. The plans for 2016 were to obtain a growth of 30%-40%. The competitiveness in this market is very high so the need for different marketing approaches raised. Thus, I was appointed as the affiliate program manager in August 2016, accepting this challenge .

Analysis

The first thing that I did was to make a deep and comprehensive analysis of the affiliate program to spot the goods, the bads and the opportunities. Due to my experience working for 2Performant.com, the Romanian affiliate network where Vola.ro performed as an advertiser, I had some knowledge about the program but I was missing the big picture.

Key findings:

  • There were no clear KPIs set for the channel. The focus was strictly on clicks and sales;
  • The new and increased commission structure that was implemented 2 months earlier did not make a real difference in terms of sales number or affiliates activation;
  • There was no proactive communication strategy;
  • The affiliates were unaware about what they sold. They only knew if it was a flight ticket or package but they had no information about the destination;
  • Despite the very good performance, the adoption of the flight search widget was very low;
  • The program had a very small number of active travel bloggers or travel content affiliates
  • The affiliates were unaware of the travel industry attractiveness. Being the only player in this industry who owned an active affiliate program active did not help the grow of this type of affiliates;
  • The share of affiliates with traffic vs affiliates with sales was quite unbalanced;
  • The marketing campaigns obtained a lower or too late adoption rate due to lack of preparation and communication with affiliates.

Challenge

Position the affiliate program as a top option for affiliates in Romania.

Based on what the analysis revealed, a 6 months plan was put on paper with the following key objectives:

  • bring the affiliate channel at full potential (around 15% of the business revenue) in a sustainable and scalable way, following 2 steps: optimize the current affiliate performances and recruit and activate new affiliates
  • share valuable information about travel client typologies with the affiliates
  • achieve the optimal revenue/100 clicks for affiliates that can compete with top industry performers in Romania (Books, IT&C and Fashion categories)
  • create an affiliate travel community
  • educate the affiliates
  • diversify the affiliate portfolio
  • strengthen the exit barriers from the program

Strategy and execution

What have I managed to achieve during these 6 months and how?

Communication

  • I shared with affiliates a series of materials about the products that we sell. For example, top flight destinations per month, average time between the purchase and the flights/vacation, the share between one way flights and two way flights.
  • I created a dedicated Facebook group where I’m constantly sharing information about the affiliate program, tips and tricks and I start discussions about affiliate marketing.
  • Special newsletter. I felt the need to segment the communication with affiliates based on what they want to hear from me. With this newsletter I gave them the opportunity to select what they want.

KPIs and Reports

I created a list of controllable KPIs that can predict the effectiveness level of the program. The KPIs that I track on a daily basis are:

  • Clicks – comparing the affiliate clicks to other channels to spot if something goes wrong
  • Number of transaction (average per day)
  • Number of active affiliates: affiliates with clicks and affiliates with sales
  • Conversion rate per affiliate type (PPC, content, cashback, etc)
  • Days to conversion per affiliate type (PPC, content, cashback, etc) – this is a major KPI because it highlights the quality of the traffic from affiliation.
  • Referrer and bounce rate per referer
  • Conversion rate based on demographics and devices
  • New vs returning users sales

Also, I implemented custom reports based on affiliate types to help me with different results and needs.

Financial Incentives: 13-days’ time to payment.

In order to become competitive with big players from IT&C, Books and Fashion I had to think slightly different. Besides the increased commissions structure, we decided to process and pay the commissions on a weekly basis, rather than monthly. Thus, there are only 13 days between the time the sales happens and the time the affiliate has the money in his pocket. In Romania, top 5 players have on average over 60 days time to payment.

Optimization: test at small scale before you go all in

Based on what weekly KPIs were telling me, I did a series of tests with a couple of affiliates to validate new ideas, new approaches. Starting from different landing pages to adjusting the traffic based on user behaviour such as the day of the week or hour of the day when the conversion takes place, I managed to substantially improve the conversion rate without extra costs for affiliates. The results of these tests offered me the correct approach with this channel and I replicated this formula at a larger scale with all affiliates.

Results

A picture is worth a thousand words. So, I let you discover the results in the picture below.

Lesson learned: autopilot mode is not the solution for the affiliate program

 

What I’ve learned during these 6 months is that if you want to have success with your affiliate marketing program you need to:

(a) The success of the channel is based highly on one-on-one relationship with affiliates and that’s why you need to have an affiliate manager who knows how to do this.

(b) Increased commissions structure (or any other financial incentives) without extra help for affiliates does not automatically bring you value. More money is not always the answer. The answer is more human interaction and proactive communication with your affiliates.

(c) You need to test your ideas before you take any major decision.

(d) Segment your affiliates based on their type so you can treat them accordingly.

(e) You must set concrete KPIs and track them constantly.

About Adrian Horvat

Performance Marketing Specialist with special focus on Affiliate Management field. Affiliate Management Trainer.

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