Affiliate: In Any Climate, Pay-for-Outcome Model Drives Operating Leverage Imperative to Survival

Digital advertising has exponentially enhanced the purchasing environment. With just a few clicks, shoppers can make well-informed buying decisions without ever needing to leave the comfort of their couch. Of course, along with this convenience comes high consumer expectations—standards that once set, can never retract. These customer-driven capabilities only solidify the reality of the ecommerce landscape: we are living in the age of the consumer and retailers need to adapt to thrive and stay relevant in their audiences’ eyes.

Especially considering the effects of a global pandemic, there has never been a moment in consumer history where a brand or retailer’s presence across all touchpoints in the path to purchase was so critical. Thanks in large part to adopting a holistic approach to multi-channel campaigns, retailers can be there at every critical point in this journey. The challenge however, is the cost to be omnipresent, isn’t cheap. As a matter of fact, with the costs of doing business with Google, Amazon and Facebook on what feels like a never-ending incline, maintaining this presence is simply unsustainable over the long haul. But there are ways, strategies if you will, that can turn your digital advertising from a cost center into a profit center. Let’s explore 3 of them.      

1. Actively seek acquisition channels where there’s opportunity to create leverage.

There is an undeniable truth: the cost of acquiring high lifetime value customers at a scalable cost is increasingly difficult. High fraud rates, outrageous trading desk fees, limited data views and hard-to-decipher metrics further cloud the data deluge, and this necessitates a new solution. When you rely on traditional (read: expensive) paid channels for your digital strategy, you will inevitably see less than half of every marketing dollar invested becoming working media. But alas, a silver lining: Performance channels (read: affiliate marketing) offering marketers a pay-for-outcome alternative that drive the operating leverage imperative to survival.

2. Measure beyond conversion and understand the touchpoints that influence the customer journey and how they impact lifetime value.

Digital analytics generally define a conversion as the successful finish of a set goal. In many cases, this is the completion of a sale. However, while macro conversions (read: a sale) are important in their own right—they only tell part of the story. If the goal is to find opportunities to drive/fuel additional profits, a strong understanding of the total value of your digital investment (read: better measurements), is critical. By paying attention to the micro conversions (think: blog views, image views, content downloads and form fills), there is unique opportunity to get a glimpse into key points of the consumer journey. Paying attention to measurement of the micro conversions enables proper nurturing that can support the consumer’s quest for additional education as they are ushered through the journey. And since the connection between customer lifetime value to profit is so strong, having knowledge of how your customer interacts with your business whether directly or indirectly—throughout their buying journey—is the cornerstone of driving long-term revenue.

3. Practice profit-driven marketing by optimizing spend based on profits generated, not cost to acquire.

When spend takes on a profit-driven approach, it turns the tables on traditional marketing and essentially transforms it from a cost center into a true profit center. This approach allows the cadre of marketers to shift their mindset: to rethink traditional strategies including KPIs, working budgets and even the customer journey. They are essentially looking at the same old challenges, just in a reimagined way. Think of it this way: would you spend $100 just to make $50? No way! But would you spend $100 to make $50 three times a month every month for the next year? Sign me up! And while CAC is important, and you need to be mindful of it as a brand, it can’t drive you out of business. You need to ensure you have profit-driven marketing techniques that lend to client retention and ultimately lifetime value to fuel profits. It’s all about shifting mindsets and tackling efficiencies from a different perspective.

To learn more about how Pepperjam’s Ascend™ affiliate marketing lifecycle technology platform can automate the traditional, time-consuming tasks of affiliate marketing and fuel profit-driven customer acquisition, contact us here.