The cost of acquiring a new customer can cost up to five times as much as the cost of retaining an existing customer. As a result, affiliate managers must do whatever it takes to cut costs wherever necessary. Continue reading to find out how affiliate marketing can reduce customer acquisition costs.
Lower your base commission rate
The base commission rate of most affiliate programs is determined by the highest commission rate they can afford. This can encourage affiliates to join your affiliate program and can be a great option for affiliate programs with no management. By lowering your base commission rate, you can calculate the difference between the highest profitable commission rate and the lower base commission rate. You can steer your budget towards affiliates that generate the highest return on your investment. In a nutshell, this can allow you to reserve your budget for affiliates that will actively promote your brand to your intended target audience across various social media channels.
Test your landing page
As an affiliate manager, a landing page is one of the most important steps involved in managing a successful affiliate marketing program. As a result, it must be tested on a regular basis to ensure it is converting leads to customers and making a great first impression. This can increase the number of clicks on your call-to-action buttons. To do so, you must curate content that aligns with the intent of your intended audience and that delivers on your promise. For example, depending on the level of traffic your website attracts, it may benefit you to test your landing page for a minimum of 2-4 weeks. This can allow you to analyse statistically significant data and adjust your strategy as necessary going forward.
Avoid cart sniping
The process of cart sniping is when a customer finds your website via a non-affiliate path, or as a regular customer, but scours the web for a brand coupon before adding it to their order and proceeding to check-out. In the long run, this can lead to problems with budgeting as well as affecting the return on your investment. In the affiliate marketing world, cart sniping is rife. With this scenario, the affiliate ends up providing little to no value. You will also be forced to pay on an order that you are also required to pay in various other channels, increasing your overall customer acquisition cost. Whilst most affiliate networks implement a strategy to combat cart sniping, it may
Improve your customer retention rate
Your customer retention rate measures how well you are providing a worthwhile service and retaining existing customers. If you acquire new customers whilst retaining existing customers, your customer acquisition costs should remain relatively unchanged. There are several different strategies available to improve your customer retention rates including analysing the percentage of customers that ceased shopping with you at one point or another and why they did so. This is also known as customer churn. You should also seek to uncover how to prevent this process from repeating itself in the future and whether or not it is an easy fix.
Negotiate network fees
By shopping around, you may be able to secure a better deal with a network that provides greater technology and greater overall service. It may also benefit you to work alongside an agency to browse available deals as they often manage a roster of clients at any one time. By taking the time to evaluate your network, you can ensure you are not overspending your budget and yield greater results over time. If you are new to the world of affiliate marketing, however, it can be difficult to know where to begin. When it comes to negotiating network fees, you must be prepared and equipped with knowledge of the traffic source you are looking to gain access to. On the other hand, you should also be willing to compromise to a price that both parties are comfortable with.
Maximise your partnerships
Successful partnerships are key to managing a successful affiliate marketing program. By maximising your partnerships, you may find it easier to reach your business goals and reduce your customer acquisition costs. If you are neglecting your affiliate partners by ignoring any communication from them, withholding important information from them, or failing to work together to source mutually beneficial strategies, you may be operating higher customer acquisition costs than necessary.
As an affiliate manager, finding ways to cut costs can allow you to manage your affiliate program effectively. One of the best ways to do so is to reduce your customer acquisition costs. To do so, it may benefit you to lower your base commission rate, test your landing page, avoid cart sniping, improve your customer retention rate, negotiate network fees, and maximise your partnerships.