KPI or Key Performance Indicator is a type of performance measurement that is used for estimating the progress made towards a specific goal in the development strategy. In the affiliate marketing industry, companies and businesses set up different KPIs for measuring their performance at a certain stage.
As a rule, the KPIs in affiliate programs indicate the real progress the company shows for a certain period of time. It can be related to the total revenue, return of investment (ROI) or return of ad spend (ROAS) rate, click traffic or average order value, etc, and helps to estimate the real situation of the company on the market and among the competitors. For affiliate marketing, KPI turns out to be a perfect option for choosing the best of the best partners to cooperate with.
Here are the most essential KPIs to look for at present:
- Clicks & Number of Sales. The conversion rate shows the effectiveness of the marketing strategy as well as the sales performance per a specific product.
- Cost Per Action & Commissions. Helps to determine which of the affiliates can offer you more benefits to the marketing campaign you’re running and whether it can result in better sales.
- Affiliate Segmentation. Categorizing your potential partner due to their performance results in every specific area can help to determine which of them will work better, and analyze their strong and weak points as well.
- Average Order Value. You can still have the benefits from the partners with a smaller audience who are willing to pay more for the products in one transaction by setting the commission for the transaction value instead of the number of sales.
- New Clients. Any successful affiliate should always keep targeting more customers and a larger audience, which means it has some potential to share for your business.
