Impoving loyalty and ROI in the current economic climate

Certain economic indicators such as the GDP growth and inflationary pressure (as reported by the International Monetary Fund – World Economic Outlook Report October 2009) are showing mild signs of economic recovery for this year. This is very good news for operators in most industries as it could mean that business is expected to rise again; however, in the marketing world, competition is set to increase once again.

Statistics show that Affiliate Marketing, unlike other channels, has gained more popularity during the acute periods of the recession as operators became more aware that paying for performance was one of the ways of justifying marketing spend. This has led affiliates, operators and affiliate marketing solution providers to try to innovate their offering in such a way that their product/service gained more attention as competition for visibility became more acute.

The question now is, What do Operators and Affiliates have to do to keep ahead of the curve?
Operators and Affiliates should first of all recognise that it is the strength of their customer base, and their relationship with their key partners that provide the foundation for sustained profitable growth. Hence knowing customers well and maximising the lifetime value of the relationships, should become the main goal of all involved. They must thus:-

Choose partners with common target customers

By analysing their in-house data, operators should be in a position to determine who their best customers are and what are their key characteristics. Operators must then make sure that when they recruit affiliates they are screening them correctly and that the affiliates chosen are the ones best suited to recruit the customers that the operators want. This will ensure that the correct target audience is being reached with the right message to increase the conversion ratio.

The same applies for affiliates. Affiliates should not adopt a shot-gun approach and enrol with all the operators in the market so that they can display as many links as possible on their website. They must focus on the needs of their target audience, and only enrol in Affiliate programs of Operators they know can service their customers well. Giving space to operators that do not match their target market will reduce the space available for the more-effective operators and might reduce the goodwill of the Affiliate’s site as customers could become unsatisfied with the suggested offers.

Read the market and try to anticipate it

This is crucial in any industry and a case in point is the H1N1 pandemic. Companies who anticipated the need for particular hygienic products and developed and marketed antibacterial gels and wipes on time, did wonders. The same applies here, in the recession and early post recession period there are trends that need to be observed and acted on.

Currently customers are still price conscious and enjoy looking out for offers that give them the satisfaction of saving. The booming of Voucher/Promotional code affiliates is a proof of this. Operators who read the market well and anticipated this trend made changes to their websites to recognise voucher codes and offered these codes to affiliates. Although some are sceptic about the duration of this trend in the market the truth is that customers currently like them. Therefore the question to be asked by operators, is not whether or not to offer these codes to Affiliates that ask for them, but rather, how to get the most out of them.

Harness new technologies to serve your customers well

New technologies that enable operators and affiliates to analyse their customer base better, are now becoming more widespread. The evolution of the internet sphere and the rise of Web 2.0 and the concept of connectivity has created new opportunities for operators and affiliates alike. Today with the development of Web 2.0 platforms it is increasingly possible to identify niche markets (and even small niches), analyse the interests of such target markets and be able to customise offers for them.

Nowadays companies are additionally required to put their human side forward, they need to establish a brand personality that customers can feel connected to. Blogs are just one good example of how a company might speak to its customers.
Given that affiliates can have smaller niche markets, they need to actively research and find out where and how members of their target niche are communicating with each another. Affiliates should aim to become a part of their customers’ network, and share their interests. This can be done through the use of Web 2.0 community sites such as Facebook and Twitter. Once the right channel is found, companies can invest in it and use it to further strengthen their brand.

It is a good idea for both operators and affiliates (especially large ones) to employ the services of an online champion, someone who can speak to the community and give a human face to a brand to increase customer loyalty.

These simple but effective ideas can help operators and affiliates to develop a mutually rewarding customer-centric relationship. Such a relationship would significantly increase the effectiveness of marketing expenditure and with the achievement of higher customer and partner loyalty, competition can be beaten. Remember that it costs less to keep new customers happy than to attract new ones!