Affiliate Marketing works. Not only is there plenty of data showing the high ROI of this marketing channel, we work first-hand with thousands of businesses that thrive on affiliate marketing. If it didn’t work, the industry overall wouldn’t be growing to nearly $7 billion by 2020.
However, there are plenty of business that gave it a go, didn’t see the results they wanted to see, and gave up on it. Why doesn’t affiliate marketing work in these cases? In our experience, the majority of these instances fall into the following three reasons.
1. Not tracking metrics.
Time and time again, the number one reason affiliate marketing programs fail seems to be because businesses are too busy to, or simply neglect to, keep an eye on their marketing analytics. That’s like never checking the engine of a car and expecting it to run perfectly smooth for half a million miles.
“I’m sure my Camaro is just fine. Road trip?”
Remember, affiliate marketing is a cost-per-transaction model. Meaning, you only pay when a sale is made. Thus, a company should never lose money on this marketing channel unless big mistakes are made, and that mistake is ignoring the metrics that are raising the red flags.
At the very least, businesses need to keep an eye on the 3 Key Performance Indicators of their affiliate marketing programs: effective Earnings per Click (eEPC), Total Revenue by Affiliate, and Average Order Value (AOV). Even if you have to cobble together a crude Excel file that’s updated by an intern each day, it’s important to measure at least these metrics in order to have a pulse on the success of your program.
Businesses that don’t know why their affiliate marketing failed are guilty of neglecting their metrics. After all, if they had been reviewing them, the program would be unlikely to fail in the first place. Your numbers will reveal everything from which affiliates to focus on, which affiliates need a commission bump, what those commissions should be, and whether it’s the right time to expand.
2. Not working with your affiliates.
Some businesses feel that their job in affiliate marketing ends after a virtual handshake with a new affiliate. The mentality seems to be “great, they’re on board. They better produce! I’ve got other things to do.”
“Welcome aboard! See you never.”
Every business is busy, especially SMBs that may have a tiny team to oversee the affiliate marketing program. Unfortunately it’s not quite as set-it-and-forget-it as people want it to be. Affiliate marketing is great, but it’s not easy.
There’s a strange stat floating out there:
95% of affiliate marketers fail.
We have no idea where that stat came from. We searched all over and couldn’t find the source report (so please enlighten us if you can find the original source). So while this number that everyone seems to cite is probably bunk, the sentiment behind why this is shared online is clear: it’s not easy to find success as an affiliate marketer. Hence, there are hundreds of articlesTweet