Top 10 Affiliate Marketing KPIs and How to Improve Them

Affiliate marketing is one of the easiest ways to start making money online, but I always get the question: How do I know I am progressing? 

The answer is to monitor these 10 top affiliate marketing KPIs. These KPIs will indicate which direction your affiliate marketing business is going and what you can do to improve it.

What is the meaning of KPI?

KPI means Key Performance Indicator; as the name suggests, these are indicators of how your business or affiliate campaign is doing.

What is the KPI in affiliate marketing?

If you are familiar with marketing, you know how vital key performance indicators (KPIs) are in your ads, campaigns, and promotions.

In affiliate marketing, KPIs can help determine whether an affiliate campaign is successful.

Why you need to set KPIs for affiliate marketing

You can not control what you can not measure. This is why you must measure and monitor all ten affiliate marketing KPIs. This will give you insight into what is going well and where to improve.

Even though affiliate marketing doesn’t require a significant investment, you can still lose money or damage your company’s reputation if you aren’t aware of what’s happening.

Top 10 Affiliate Marketing KPIs and How to Improve Them

Here are the top 10 affiliate marketing KPIs and how to improve them.

Social proof

For people to buy from you, they need to be sure that you know what you are talking about, and you need to show proof that back up your claim.

You can not tell that you will teach people to build a blog if you do not have a blog yourself.

I have seen people who claim they are experts in building online communities and have less than 100 followers; no one will believe and buy from you.

How to build a social proof

The easiest way to build social proof is to share what you do. Do you want to become a copywriting expert? Share the process from when you started to where you are, and share your journey.

If you like writing, you can share your journey with a blog or Twitter page; if you like creating videos, you can share your journey on YouTube.

You can share the courses you take and use your affiliate link to make the commission. You can share the tools you use and monetize your content and process.

This way, if you promote an affiliate product or create a product related to that skill, people will consider you an expert and likely purchase from your affiliate link.

Clicks

This is the first metric you should monitor: How many clicks are you sending to your landing pages or affiliate offers? I recommend sending at least 100 clicks per day.

When your audience gets bigger, you can send more clicks, but sending 100 clicks daily should take you nearly $100 daily revenue.

How to increase the number of clicks

To increase the clicks you send to an affiliate offer, you need to create more content, link it to your affiliate offer, or start buying traffic from social media, search engines, or solo ads.

Conversion Rate

Clicks without conversions don’t mean much in the long run. Conversion rate measures the percentage of clicks turned into customers.

Measuring and setting goals for conversion rate is one of the most fundamental ways to evaluate your affiliate marketing efforts.

How to improve the conversion rate

There are three ways to improve your conversion rate: get more quality traffic, get a better offer, and do a great job pre-selling the offer.

Get more quality traffic.

If your traffic is not targeted enough, the conversion rate will suffer. Imagine promoting a weight loss product to a group of skin people.

No one will probably buy it, or if someone buys it, it will be for their loved ones.

However, if you take the same offer and promote it to overweight people, most will buy the product, improving your conversion rate.

Presale the product

If you are creating content, ensure your content does a great job of pre-selling the offer.

The prospect needs to decide to buy the product even before reaching the sales page; this will improve the conversion rate.

Another way to presale the product is to create a landing page. This is the page that your prospect will see before they go to the affiliate offer.

On this page, you can show them how to use the product and what results you got, highlighting the main benefits they will get from buying it. If you have bonuses, here is where you can announce them.

This will improve the conversion ratio.

Change the product

If you know that the quality of traffic is good, you have tried creating landing pages and pre-selling the product, and yet the conversion rate has not improved, it is time to change the product.

Sometimes, the product is not something our audience wants, so the only way to run a business is to find a different product to fit our audience.

Earning Per Click

Earnings per click (EPC) is an affiliate marketing term that refers to the average amount of money you earn each time someone clicks one of your affiliate links.

Most affiliate networks will show this value in the dashboard, but it is easy to calculate if you can not find it. You take the total income made and device it to the number of clicks; that is your EPC.

An EPC of $1 or above is good, especially if you do not pay for traffic; if you are paying for traffic, make sure that your EPC is equal to or higher than the amount of money you pay to get the click that is how we make a profit in affiliate marketing.

How to improve EPC

The easiest way to improve your EPC is to capture visitors’ email addresses before sending them to a sales page.

This way, even if they do not buy, you can follow up with them, educate them, and recommend the same product or other products.

How To Build An Email List For Affiliate Marketing in 10 Simple Steps

LTV = customer lifetime value

Customer lifetime value indicates an average customer’s total value to you as an affiliate.

We are talking about the accumulated order value you can expect per customer over time.

In my experience, people who join Aweber autoresponder using my link tend to stay for at least two years.

On average, I make over $9 per paid customer, so for me, every paid customer I send to Aweber is worth at least $216 in their lifetime as an Aweber customer.

7 Reasons Why Aweber is The Best Autoresponder for Beginners

How to improve customer Life Time Value

Promoting high-quality programs vital to a business is the secret to improving customer lifetime value.

How many times have you changed your hosting company? Are you using a landing page builder or an autoresponder? Promote these programs by offering high-quality products that people are uncomfortable changing regularly.

AOV = average order value

The average order value measures how much money a customer spends on a single order. You calculate it by dividing revenue by the number of orders.

For example, the average order value at the Wayfair affiliate program is $300 if you get a 7% commission of at least $21 per sale. You can make over $ 3,000 monthly if you make five sales daily.

Wayfair Affiliate Program-How To Make $100 a Day

How to increase the average order value

You must pick two product types or affiliate networks to increase the average order value.

The products with upsells or affiliate networks allow buyers to buy different products in the same cart.

For example, when people buy from Amazon through your affiliate link, you will get paid commission for each product they add to the card, even if it is not related to the product they clicked for.

Refund Rate

It does not matter how good you are as an affiliate marketer; people will want to refund the product and get their money back.

Promoting a product with a high refund rate can reduce your profit and hurt your reputation as an affiliate; brands will not want to work with you.

Promoting a product with a refund rate of less than 10% is great; for every ten sales you make, just one person asks for their money back.

How to reduce the refund rate

I reduce the refund rate for the product I promote in two ways.

Promote high-quality products.

I only promote products I use myself, and I know they are of high quality; promoting scammy products will lead to many refunds, which is not good.

Another thing I noticed is that I have never had a customer who asked for a refund for a high-ticket product ( product over $500), so I recommend promoting high-ticket offers to reduce your refund rate.

Be honest

Most people will ask for a refund if they feel the product did not meet their expectations.

This is because most product vendors and affiliates hype the products, and when people buy and figure out everything was hype, they will ask for a refund and give an honest opinion to people before they buy, and the refund rate will go down.

Percentage of new customers vs. returning customers

It is good to get paid $300 or more per sale, but if you get paid that amount once and never receive any commission afterward, it will hurt you in the long run.

The idea is to have a mix of customers who pay you that high amount and another group of customers who make you recurring commissions.

If you are an affiliate for a program that pays you $30 in recurring commission every month, you know you need to get 100 customers to make $3000 per month or $100 a day.

Adding this to multiple $300+ monthly commissions can quickly take you to $10k. 

How to improve the Percentage of new customers vs. returning customers

This can be done by promoting products with high-ticket affiliate offers as their one-time offers and recurring affiliate programs as the backend.

If you can not find these offers, you can find high-ticket affiliate offers and mix them with recurring income offers.

For example, you can promote a webinar that pays you $500 per sale and recommend autoresponders, landing page builders, etc., to the same people. These are the products they will need anyway, and they are helpful, so it is a win-win situation.

Churn Rate

The churn rate measures the percentage of referred customers who leave the product you are promoting.

Some of the affiliate programs will provide this number for you. It’s calculated by dividing the number of churned referrals by the total referrals.

The ideal churn rate for mature and established companies is 5% to 7% annually and less than 1% monthly churn. 

How can we improve the Churn rate as an affiliate?

Give customers a reason to stick around. If you promote software like a landing page or an autoresponder, the best way to ensure people stay longer is to educate them on how to use the tool and make it profitable. They will keep paying for the tool you promote if they make money with it.

 

Income

This is the amount of money you make in commission per campaign or month; when you are new, it will probably take three to six months to get your first income.

Do not quit. Keep improving other KPIs, and you will see sales in your dashboard.

I put this KPI near the end because if you improve the eight other affiliate marketing KPIs, you will also improve this KPI.

How to improve your affiliate income

You will improve your affiliate income by improving your other affiliate marketing KPIs. Are you driving enough traffic? Is the traffic high-quality? Are you pre-selling? Does your offer resonate with your prospects?

Profit

The profit you make is the difference between the total income generated from your affiliate marketing business and the total cost of running the business.

The ninth KPI was income, but from that income, how much does it cost you to run a business? The main cost in affiliate marketing would be the tools you use to run the business ( hosting, autoresponders, tracking, etc) and the cost of traffic, courses, etc.

How to improve your profit

There are two ways to improve your profit.

Cut the cost

Some tools are unnecessary. Reduce them or find tools that do multiple jobs; for example, you can cut the autoresponder and landing page builder costs using Systeme, which can do both.

Get a free Syteme.io all-in-one tool here.

Increase your revenue

You can not cut business costs to succeed; you must make money as an affiliate. You can do it by improving the first eight affiliate marketing KPIs.

You can learn more about how we make money online as affiliate marketers here.

FAQ: Affiliate Marketing KPIs

What is the KPI for affiliate marketing?

KPI stands for key performance indicators, critical in tracking and measuring progress toward a goal or objective.

Marketing KPIs are the metrics and results that determine progress toward a marketing campaign objective.

What are the three pillars of affiliate marketing?

The following are the three pillars of affiliate marketing:

  • Merchants: The brand that wants to market its products.
  • Affiliates: People who encourage their audience to purchase the products.
  • Consumers: People who buy the products using the affiliate link provided by affiliates.

Key Takeaways: Affiliate Marketing KPIs

Here are the top 10 Affiliate Marketing KPIs.

  1.  Social proof
  2. Clicks
  3. Conversion Rate
  4. Earning Per Click
  5. LTV = customer lifetime value
  6. Refund Rate
  7. Percentage of new customers vs. returning customers
  8. Churn Rate
  9. Income
  10. Profit

When you combine all of the above, you’ll realize that it all boils down to Selecting a good, high-converting offer and sending high-quality clicks to the affiliate offer.

You need to pick the performance metrics representative of your affiliate marketing goals and start collecting data.

If you want to learn how I make money as an affiliate marketer, please click here.

 

 

>