In every corner of the business world, brands are falling in love with all things “performance based”. Some of these reasons seem obvious: efficient, direct and loaded with incentive.
Whether you are overseeing strategies within a marketing team or for a client—performance based marketing which is also referred to as affiliate marketing, provides the kind of data that will earn you as a marketer gold stars. Some marketers need great results and actual data to back up their work and when compensating influencers and marketing partners based on their performance aka how much sales they brought in, marketers are loving the pats on the back they are getting from their peers and bosses.
Let’s check out a few reasons why marketers are quickly falling in love with this type of marketing and racking up the gold stars for their work in overseeing strategies that involve affiliate program management.
The fact that performance based strategies are trackable and traceable is one of the more apparent reasons to adopt this strategy. At a glance, you can track sales, identify top (and bottom) performers. See which strategies and verticals are working best for your team. Pretty basic, but massively helpful, as even the most casual analysis can give you current and helpful data.
The more you know about consumer behavior, the better you can position yourself for today’s sales and tomorrow’s strategies. One study estimated that over 90% of companies using performance-based marketing rely heavily on the data created to make better business decisions, as well as justifying the budget allocated to it. Sounds good to us.
ROI for You and I
Ultimately, justifying your return on investment constitutes your bottom line. Paying your team per conversion or sale is as efficient as it gets; cutting waste, eliminating up-front fees, and rewarding the most talented and productive members of your team—all without costly analysis and assessments. Keeping it simple can keep your investment safe and sound.
Did you know that last year, 30% of online sales for retailers were brought in from affiliate partners? Talk about ROI!
Get Flexible Fast
In this dynamic and ever-changing marketplace, it is increasingly important to be able to adapt to every trend and direction quickly and effectively. Performance-based marketing gives you that flexibility. Large in-house marketing teams can often be slow to pivot strategies in response to, say, increased mobile sales or a sudden shift in demographics.
Whether you hire an agency that specializes in this type of quickly evolving and changing marketing or have someone who owns it in house, the in-the-moment data that results from performance based marketing can allow your brand to capitalize on what’s happening right now.
Scalability is also an issue that can be hindered by traditional marketing strategies. You want your business to be able to grow smoothly and handle the increased workload…after all, this is what you’ve been working for!
Performance based and affiliate marketing strategies are designed to be scalable. Just be sure that you’re not designing these programs to be “self-running.” They only work when there is a dedicated person or agency who is familiar with the legalities and best practices of this time of marketing.
Data, Data, Data
Yes, we already talked about crunching data. You can tell who sells what and to whom instantly, like we talked about above. However, the bigger the data gets, the better equipped your team can be to succeed…and the pressure to be able to absorb and deploy accordingly becomes enormous. According to this study, the biggest challenges to today’s CMO are managing the massive surge in consumer data, and how to best use it to connect with the consumer across multiple channels.
Understanding how all of this works can be daunting, especially to professionals who aren’t fluent in this type of digital analytics. So, CMO’s are doing what most professionals do when they’re in a similar position: delegate. Find the best people who own this type of analytics and bring them aboard. The same study mentioned above reports that seven out of ten CMO’s will hire external partners to manage and optimize the influx of first-party data that comes with performance-based marketing. And why not? Moving yourself away from this pain point allows the best in the game to deliver you results, and lets you get your eyes back on your business. Sounds like a win-win.
Keepin’ It Real
With all the data and analytics and efficiency that performance-based marketing delivers, you might forget why this type of strategy is so effective. Authentic messages from a trusted and respected source will most always resonate with the consumer in a natural and comfortable way. Perhaps one of your Instagrammers is particularly adept at organically positioning your product in their gorgeous photographs. Maybe your product is included in a “must-have” list with other complementary items, offering exponential cross-promotional exposure through all of the other channels those products have. Whatever the method, it’s these intangibles provided by your external sources that truly ramp up the value and ROI you are looking for.
Ready to Earn Your Gold Stars?
So, what’s the moral of this story? Well, the numbers are out there that show how effective this type of marketing is. Other stats are showing how much data is available to the brand…and, subsequently, how challenging managing all that information can be. If you have all that under control with your own analytics team, you’re well on your way. If, however, it seems like you might need a hand in making all this data work for you and your business, don’t despair. Most successful marketing professionals do just that and are seeing immediate and profitable results.
Do you think that you’re earning enough gold stars when it comes to implementing performance based marketing strategies?