Worth paying for existing customers?

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Worth paying for existing customers?

daniel-gross-aug16

An interesting debate (also highlighted at the recent Performance Marketing Conference in Amsterdam) which I sometimes find myself in with advertisers, is whether they should pay publishers for existing customers. The argument from their side is often “they would have probably converted anyway”. But let’s look at both sides of the coin.

The reality is that if you as an advertiser invest marketing dollars into retargeting, PPC and Google Adwords, you are most likely already paying for existing customers. So what makes affiliates different? For advertisers to make the right decision about their commission strategy, they must understand the real value a partner contributes in the conversion funnel. To truly understand that value, the client and the publisher need access to coherent, accurate data and the ability to analyse it appropriately.

We have worked with several clients where a publisher managed to increase the rate of repeat sales or the average basket value on existing customers. Advertisers should also ask themselves the following:

  • Are AOV’s lower or higher when this partner is involved in the conversion process?
  • Is this customer being targeted by the partner’s newsletter – are they playing an important role in triggering brand affinity?
  • Do customers from this partner traditionally turn into repeat purchase customers versus other publishers and channels?
  • How many other partners were involved in the path to conversion – was the consumer actively looking around and being influenced by your partner’s base?

I would say it’s important for advertisers to look at the big picture. With the online and ecommerce space becoming increasingly competitive in South Africa, taking the approach of not paying commission for existing customers could damage the relationship with publishers and can make your brand less competitive in the space. As the new customer pond becomes smaller and smaller, there needs to be a more balanced view on the role publishers play in driving existing customers. Working together and sharing information is the best way forward for both parties.

Daniel Gross – CEO

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