Questions You Need to Ask Your Partnership Agency

Over the years, I’ve seen many metrics used by Affiliate Management agencies that wow their clients. 

On initially hearing any of these metrics, they appear very impressive, but I want to peel back the onion on some of these metrics, and explain how they aren’t what you need to be focused on when selecting an agency.

Metric  Set No.1: Revenue generated for clients.

Examples of this claim

1. We manage over $5,000,000 in Affiliate Revenue every month.
2. When we launch, our clients see an average of $100,000 in affiliate revenue in their first month.
3. Most of our clients see Affiliate revenue grow 10-15% monthly.

All these claims sound compelling, but most of these claims are simply coincidental, and are not reflective of the channels contribution. 

Most affiliate programs are propped up by bottom of the funnel affiliate partners. These could be:

• Trademark + PPC Bidders.
• SEO Affiliates ranking for reviews or discounts.

Both these categories are targeting traffic that is almost ready to convert, but they are allocated to full allocation of the revenue in the affiliate program. 

To understand the intricacies of this concept, I’ve visualized some scenarios below.

All of a sudden, we start to question the incrementality of the affiliate revenue. If we look at the year as a whole, we need to ask;

Is the revenue incremental? 

To give real world examples of this, let’s look at the Goli Nutrition, a high growth company who are utilizing affiliate marketing. 

Below are two examples of the marketing activity that is reliant on the company growth, and which would not happen without that trajectory. 

Fig 5 shows Honest Brand reviews ranking no.2 in Google for “Goli Reviews”, and Fig 6 shows a group of affiliates bidding on their brand terms in Paid Search. All conversions from this activity would go into the Fig 1 chart, but are the conversions incremental? Certainly not all of them.

Make no mistake, I am not saying that Honest Brand Reviews and Trademark+ affiliates don’t play a role in the conversion funnel, but I am saying that their contribution to revenue makes the high level claims about growth and revenue managed less meaningful.

Metric Set No.2: Our efficiency is greater than other channels.

Examples of this claim:

1. Our CAC’s are usually less than $20, even for high ticket prices.
2. Our ROAS comes in significantly higher than other channels.
3. Our sophisticated budget allocation allows us to keep costs low.  

It’s a similar situation to claim number one. The aforementioned partners bring very cheap conversions. 

However, these conversions should not be compared to other channels like Google and Meta. 

The blended CAC or ROAS reported is somewhat meaningless. The cheap conversions cannot be scaled without top of funnel activity.

Let’s take a company where their core growth channels (Non-Brand Search/Meta Prospecting, TikTok), report a CAC of $100. 

Now we see a very different scenario. The program is proposed up by conversions that have a really low CAC.

Again, the point here is highlight that channel CAC on it’s own, particularly when compared to other channels shouldn’t be a metric you use to evaluate the channel’s actual performance.

So what questions should you ask?

As highlighted, top level metrics really don’t tell the true story of how an affiliate program is performing. Below are a list of questions that you should ask anyone who is pitching for your program, or managing your program. 

Tell me about your strategies for rewarding partners?

All traffic has an appropriate price. Any program manager should be able to speak to their strategies at an affiliate type level, and explain their rationales for offering different rates to different traffic types. 

Tell me about your prospecting/outreach strategies?

Rather than relying on a theoretical address book, you should be hearing things like:

• I’m going to put your core keywords into Semrush, and see what relevant sites are creating content about, and reach out to the relevant sites.
• I’m going to see if there are any PPC Affiliates operation in the space. Perhaps we can review your auction insights data together. 
• I am going to use a listening tool like Mightyscout.com for competitors to see what influencer types they are working on. 

Tell me how you scale? 

It’s good to understand how people identify opportunities. “Our outreach team will find more partners” isn’t a satisfactory answer here. Some of the most successful programs I have built have had 80% of the revenue coming from 10% of the partners. You want to hear about successful collaborations, and what were the success factors behind these collaborations.

Tell me about your rate review process?

Partners rates should be adjusted  regularly. You don’t always get it right the first time around. A good affiliate team will adjust the rate regularly. How do program managers lower rates but lose no volume. How do they ensure a rate increase means more volume?

Tell me about your engagement processes?

Some partners you really don’t need to spend much time with. They have a certain volume they bring, and it’s unlikely to change. You can communicate new product releases/price updates on an as needed basis, but some partners are worth a weekly catch up with. 

Tell me about your brand protection processes?

As per the Goli example, it’s often the case that affiliates get very aggressive when it comes to piggy-backing on brand search. All programs should have a policy on brand search across all channels. 

Tools like Brand Verity should be deployed to see if your trademark terms are utilised in any search activity.

Tell me about your relationship with other channel owners

There is often overlap between affiliate conversions and paid search, paid social and e-mail conversions. It’s critical that a program manager understands the relationship between all the channels.

It’s also not always the case that Search and Social start the process, and affiliates close. It’s very often the case that a top of the funnel affiliates starts the process, and brand search, email, or Meta Retargeting close. 

Providing access to Google Analytics, or another attribution tool (Northbeam, Rokcerbox), can also help understand the dynamics, but really the program manager should be communicating with other channel owners on a daily basis.

Summary

All in all, it’s important not to be blown away by top level metrics. Because your agency is managing millions of dollars in revenue and spend, does not mean they will be the best agency for your program.

Asking more strategic questions should help you run a better pitching process.