How to measure your affiliate or partnership program incrementality

It’s the eternal question for any marketer: is this campaign making an impact? Like retailer, John Wanamaker said a century ago, “Half the money I spend on advertising is wasted. The trouble is, I don’t know which half.” 

Even with all the data available today, determining whether you’re converting customers or preaching to the converted remains challenging. 

Incrementality: what it is and why it matters 

Incrementality is the ability to correlate an input, such as spend, to a specific outcome. This effort helps to identify the effectiveness of a marketing channel or a partner. It also works as an optimization tactic.

Imagine shopping online. You found the product by clicking a paid search link, but you have a browser extension that provides customers with coupon codes. As you’re about to make the purchase, the extension pops up with a coupon. 

So, you get the coupon and then make the purchase. The company that makes the extension receives credit for the sale from the affiliate networks they work with, which earns them a commission. 

The brand’s marketing team might say you would’ve made that purchase even if the extension didn’t give you the coupon. They must pay a commission when the partner doesn’t add much value. The sale wasn’t incremental.

Measuring partner incrementality: choose the right path

It would help if you could track and analyze the customer journey to establish incrementality. That’s why impact.com provides tools to track and monitor the customer journey and your partner’s involvement. 

Understand how my affiliates interact with a customer 

You’ll find the “subway graph,” where you can drill into the individual actions of each customer, and the graph shows each touch point on the customer journey where your affiliates were involved. It offers a complete picture of a single customer journey, so you can see who drives customers into the funnel.

Measure the true value partners drive 

Your partners work with you to get rewarded for their efforts. When you don’t fully understand whether affiliates drive incremental value, aligning partner incentives with company goals and KPIs is challenging. As a brand, you want to understand the actual value of a partner so you can pay uniquely based on this value.

That’s why contribution insights are so valuable. They show where each partner drives value: at the beginning, middle, or end of the path to purchase and how frequently a partner gets credit for conversions they participate in. 

You can also see whether they were the sole partner involved. If a partner was the solo touch-point for a customer, they probably had a decisive role in driving that sale. These insights help you understand if you’re compensating partners in proportion to the actual value they drive.

Know which partners bring in the most valuable customers

Like anything in life: quality matters. Quality partners drive valuable business to your brand. When you can identify partners that bring in new customers and drive high lifetime value (LTV)—you’re more likely to develop deep, meaningful, and authentic relationships with those partners (and their audiences). 

The Customer Value insights reveal each customer’s true lifetime value (LTV), so you can take action to optimize your spending. You can find the partners that drive new customers into your funnel.

These insights will show you the value of these customers, including how many were one-time-purchasing deal seekers and how many became loyal and high-value customers. 

Align rewards with a partner’s true value 

Relationships are symbiotic, and you want to reward your partners for their efforts. It’s no small feat when you don’t have detailed insights into your customer’s journey. Transparency is crucial to help you determine appropriate partner incentives.

The Crediting Concerns report details what happens when two or more partners appear in the same conversion path. You’ll find whether one partner receives credit for the conversion more often than the others so you can determine whether your partners are being under or over-compensated for their work.

How to measure channel incrementality

Suppose you are struggling to understand your affiliate channel’s true impact. In that case, we provide you the tools to see relative value across the marketing mix and its role as an introducer, influencer, or closer.

Recognize the affiliate channel’s true impact 

You can secure recognition and (increased) budget for your affiliate marketing efforts by tracking and proving channel incrementality using the subway graph and contribution insights. The two allow you to visualize how different channels interact, when a marketing channel acts as an introducer, influencer, and closer, and how it gets credited for its actions. This information will help you prove the incremental value of the partnership channel. 

These insights allow you to track and automatically deduplicate conversions across paid marketing channels, ensuring you don’t pay twice for a conversion event. This ability eliminates redundant spending and reduces overall costs.

Putting incrementality data to work

You have all the information to prove incrementality. Now you can optimize your program. Analyze reports so you can tweak your contracts, training materials, and other elements to improve partner performance. For example:

• Automate partner rewards and pay partners uniquely based on their value with impact.com’s unique tracking, cross-channel attribution capabilities, and dynamic payment model.
• While you monitor your customer journeys, you can watch for any drops between steps and provide partners with whatever they need to increase their conversion rates. 
• Suppose you notice a partner becoming an expert at bringing customers to the top of the sales funnel, but their contract only pays a commission for the last click. In that case, you may consider adjusting their agreement to reflect the value they provide. 
• This information will help you deduplicate conversion credits across channels, providing a much cleaner look into your marketing efforts and reducing costs.
• With a clear view of channel incrementality, you can use this data to demonstrate the value of partnerships to other internal stakeholders and perhaps even advocate for an increased budget. 

With deep insight into your partnership program, avoid blind spending by realizing the value the partner or channel is driving and ensuring the highest quality partnerships. Take the guesswork out of proving the value of your partnerships program with impact.com. To learn more about how to use impact.com to enhance your decision-making, check out the Optimize training courses at the Partnerships Experience Academy.