“Affiliate marketing is not a new concept, but many D2C brands are leaving its full potential on the table,” says Ankit Mittal, Associate Vice President, Beardo while talking to Udit Verma, Co-Founder & CMO, Trackier during the latter’s webinar How D2C Brands Can Sell More Using Affiliate Marketing.
The webinar hosted by Udit Verma and moderated by Barkha Gaur, Content Marketing Manager at the company, aimed at educating the D2C brands who have just started or yet to start their affiliate marketing journey for upping their sales, increasing brand awareness, and improving customer retention.
The expert on the panel, Ankit Mittal stressed the importance of optimizing the affiliate marketing campaigns as per industry standards and even shared Beardo’s secret sauce to affiliate success.
Webinar Highlights | Key Learnings
Missed on the April 26th webinar? Or want a quick refresher? No worries! We have a recap ready for you.
Identifying Right Partners to Work With
Commenting on the same, Ankit informed the attendees that Beardo, unlike other D2C brands, deploy a mix of both publishers and networks into their affiliate marketing strategy. When it comes to selecting the right partner, there are few metrics that the personal care brand and its team ensure before onboarding them to its affiliate program. Some of the most important metrics are:
Gross Merchandise Value
GMV or Gross Merchandise Value is defined as the value of goods sold via customer-to-customer or e-commerce platforms. This metric is often used by businesses who rely on partners for sales, to track their affiliate performance and analyze the efficacy of their partnership.
Higher the GMV, the more likely the business is to invest further in the partnership and potentially offer more favorable terms. Hence, GMV is one of the most important criteria to continue partnership with a publisher or affiliate in affiliate marketing.
Return Rate
Return rate is often overlooked by D2C brands working with affiliates. Especially in the D2C industry, returns and refunds significantly impact the profitability of the business. Hence, it cannot be brushed under the carpet when calculating affiliate success.
According to Ankit, any affiliate with a return rate more than 5% is not a profitable partnership. In some cases, the return rate is even more than the conversion rate, which leads to more cash burn and lesser revenue.
As per the industry standard, the contribution of affiliates in bringing sales to D2C brands is around 15-18% which has now reduced to 12-15%, most likely due to the prevalent economic conditions. However, this is not the case with Beardo. With its strategic approach to affiliate marketing, the male grooming brand has managed to increase the affiliate contribution to their sales significantly. Let’s explore their winning formula, as Ankit explains.
Custom Commission Models for New & Returning Customers
What is your business’ goal? To acquire new customers or retain existing or both? Depending on your primary goal, you can customize your commission model into tiered format.
Beardo has set separate commission models for affiliates bringing new customers and the ones bringing repeat orders. Usually for D2C brands, repeat order ratio is an important metric and Beardo’s strategic commission structure incentivizes affiliates to prioritize nurturing these valuable relationships.
Note: Ankit Mittal also stressed on how D2C brands keep running the same offers for a longer time, exhausting the creativity of their affiliates. One way to tackle this creative fatigue is to keep refreshing offers from time to time. Also, keep an eye on new media channels that your competitors are investing to drive in more sales.
Key Challenges Faced by D2C Brands in Affiliate Marketing
An average D2C brand works with hundreds of partners and publishers, hence its imperative to face certain challenges while running an affiliate program at scale. Ankit Mittal highlighted the key challenges that D2C brands usually face and how they can tackle them.
Combating Affiliate Fraud
Where there’s money, there’s fraud. The affiliate marketing industry is not untouched by fraud. D2C brands often register high bot activities that spike up website or store traffic but bring in significant drop in conversion rate. Identifying these bot traffic sources or affiliates who are notoriously inflating numbers to get a larger chunk of commission, is important.
One way to fight affiliate fraud is to onboard partners who enjoy a good reputation in the market. The other way is to invest in a robust anti-fraud tracking tool. Beardo, which uses Trackier’s Affiliate Tracking Software, is on the safer side using the company’s proprietary anti-fraud technology. Investing in a high quality anti-fraud tool ensures that only partners bringing in real conversions are rewarded, hence protecting your program’s integrity.
Real-Time Tracking & Sending Timely Reports
When affiliates work with a brand, they expect the brands to send timely campaign reports to analyze their performance. If you perform this action manually, it consumes too much time and delays in sending reports degrades the partner’s trust. Hence, investing in an attribution tracking solution that not only offers real-time reporting but also automates recurring report generation to take the load off the brand’s affiliate managers.
TL;DR
- While D2C brands are known for high capital investment and burn, affiliate marketing can be a cost-effective way to increase profitability.
- Affiliate marketing not only boost sales, but also improves brands recall and customer retention.
Choosing the right partners and setting the right commission structure is essential to determine the success of your affiliate program. - Onboarding a trusted, multi-tasking affiliate tracking software is indispensable for D2C brands to ensure the success of their affiliate marketing efforts.
