An affiliate has emailed me the following question:
How do you evaluate affiliate programs against one another (e.g. how does Shareasale compare to Pricegrabber, etc.)
First of all, ShareASale is an affiliate network (with 3000+ affiliate programs on it), while PriceGrabber, as far as I understand, runs an in-house-based affiliate program. So, it wouldn’t be right (or even impossible) to compare the two.
However, you have a great question there, and I believe I can help you with it. While evaluating affiliate programs side-by-side, I suggest analyzing the following 5 KPIs (key performance indicators):
- EPC — average earnings per one hundred clicks sent by affiliates to the merchant’s website
- Conversion Ratio — average number of affiliate-referred visitors who convert into customers upon visiting the merchant’s site (normally measured in %)
- Reversal Rate — percentage of transactions that affiliates refer to an advertiser get canceled/voided, and hence the commission gets reversed
- AOV — average order/ticket value
- Average Commission — average affiliate payout per referral
See the following article of mine (published in a recent issue of Visibility Magazine) for further details and examples: Affiliate Marketing Analytics.
Also, remember that focusing on any one metric is dangerous [see this article for a good example], and make sure you analyze your KPIs (especially the first three of the above-quoted ones) in one bouquet at all times. Only then you will be able to make good weighed decisions.
8 thoughts on “5 KPIs for Affiliates to Analyze While Evaluating Programs”
Great post – your site is a great resource for anyone in the e-commerce ecosystem!
Thank you, Alexander, and glad you’ve found my answer of help. 😉
I would definitely agree that Reversal Rate and EPC are very good indicators if the offer is doing well or not. Though sometimes it’s really tough to gauge an offer off a network number because you’ll have Search affiliates mixed in with Media affiliates mixed in with Email affiliates. If you can I would take it one step further and ask your affiliate manager what the breakdown is of affiliate types to get a good idea if your marketing method will work with the offer.
Paul, I fully concur with you here. Having average metrics (for reversal rate, EPC, conversion, etc) isn’t always helpful. In fact, in many cases, when you’re looking at all affiliates across the program (like you have illustrated), they are just that — averages.
Good idea on asking affiliate program managers to give you the breakdowns of these metrics by affiliate types. In many cases, however, you’ll have to do your own testing and measuring… It doesn’t hurt to ask though.
Thank you for sharing this valuable piece of information. I am an OPM and I came to your website as I am looking on the best way to analyze/evaluate the overall performance of the affiliate program I am handling. The program I’m handling has a compounded growth rate of 146% over the last 6 years. The average annual growth rate is about 140%.
I have read your article Affiliate Marketing Metrics and I’m glad I came to read it as it gave me so much insight. I’m planning to develop a sort of score card using the KPIs you recommended so I can monitor and evaluate my performance and the overall performance of the affiliate program. The score card will also be a great tool so that my client and I can come to a mutual agreement on what are the acceptable performance metrics. On that note, I would like to ask some recommendations from you (as I sincerely respect your word on this) on the acceptable metrics/standard on the four KPIs like:
(1) % growth in affiliates as a result of affiliate recruitment
(2) % of active affiliate over total affiliates
(3) % of activated affiliates over total stagnant affiliates
(4) % growth of traffic coming from the affiliates
I look forward to your response. Thanks again Geno!
Al, take a look at my Affiliate Program Management KPIs post. The four KPIs you’ve listed fall into that category, and yes, all are right on the money. Not sure what else to “recommend” apart from tracking and improving these on a regular basis.
Thank you for your reply. I was actually asking if you have any benchmark for each KPI based on your experience, say for example what’s the ideal ratio of active affiliates versus the inactive one to ensure that there’s a good flow of sales.
Ah, gotcha now. I’ll wrap some thought around it, and will (more than likely) reply in a blog post.