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Performance marketing is a marketing practice used by merchants and advertisers in all industries. The clear advantage of this practice is that, unlike traditional marketing where you pay for an advertisement up front, the merchant / advertiser does not incur any marketing expenses unless clear positive results (i.e. 'performance') are obtained for the business.
Performance marketing is a mutually beneficial business model where partners and affiliates promote the merchant's products and services to drive business to the merchant's website or bricks and mortar store. In return, the merchant rewards the affiliate by giving back part of the revenues generated by the referred customers. Affiliates work like an extended sales team. Compensation is based solely on the performance results obtained from impressions, clicks, registrations, deposits, turnover, revenue, or a combination of all.
'Performance Marketing' is often used interchangeably with 'AffiliateMarketing'. 'Performance Marketing' is solely concerned with clear performance results while 'affiliate marketing' incorporates all kinds of marketing where affiliates promote products and services and are rewarded back in various ways.
As explained in the 5 step process diagram above, the performance marketing life-cycle is as follows:
- An affiliate signs up to the merchant's affiliate program.
- The affiliate promotes the merchant's business, typically by displaying adverts of the merchant's products and services on his website.
- Potential customers view the adverts shown on the affiliate's website, click on them and are redirected to the merchant.
- The merchant generates revenue from the customers that the affiliate referred.
- The affiliate is rewarded by the merchant according to the marketing results obtained.
NetRefer, the leading Performance Marketing Software Suite, can seamlessly handle and automate each of the 5 steps of the performance marketing cycle. Moreover, it offers all the necessary building blocks to set up and run a successful affiliate program:
- NetRefer enables affiliates to sign up, log in to their affiliate program, see reports and retrieve adverts to put on their sites.
- NetRefer displays adverts on affiliate sites.
- NetRefer tracks the number of times each advert is displayed and clicked on.
- NetRefer gathers data about referred customers and all their related performance indicators.
- NetRefer calculates the rewards (commission) each affiliate is entitled to, based on his performance.
Schedule a demo today to learn more about NetRefer and about the benefits of having the leading affiliate marketing software powering your affiliate program.