In establishing a partner marketing program, brands have the opportunity to work with a wide array of partners, or publishers, each of which can bring unique value to a program. Often, however, brands will find their programs over-indexing on a given type of partnership, at the expense of others. When this happens, it’s important for brands to rebalance the scales and diversify their relationships—and to ensure that each partner is being commissioned according to the unique value they bring.
Marketers may not know where to begin on this course correction, let alone what questions to address, to prevent this imbalance going forward. Let’s take a look at key considerations for brands looking to diversify their partner mix and ensure compensation reflects each partner’s true contribution.
When and Why to Diversify
Even when brands seek to establish a diverse group of companies within their partnership program, it’s not uncommon for them to find that the balance of their partner sales have inadvertently shifted toward coupon sites. And while those sales are valuable, they’re often not the ones that deliver the highest margins, as these purchases are usually (but not always) accompanied by a discount.
Being intentional is critically important. For example, it’s often the case that brands don’t even know what their partner mix is. Thus, the first step is to evaluate partner composition across program performance metrics like revenue, traffic and spend and begin making adjustments from there. Once organizations become more intentional about diversification, many brands look to balance discount partners with content-focused partners that can deliver high-value customers along with high margins. This high-value categorization comes from the fact that these customers tend to be new ones, focused more on delivery and less on discounting or operating from a price-sensitive mindset.
That said, when it comes to program diversity, it’s also possible to deviate too far to the other side of the spectrum too, by favoring content-only partners. While coupon and deal partners may not deliver the highest margin, there is scale and volume to offset the downside. With content only, there is generally more new customer acquisition happening as the content drives discovery, but it can be challenging to ensure consistent volume with this approach, as it needs to be fed with consistent content (namely, featured products that are in high demand).
Diversifying one’s partner mix eliminates the level of risk and overdependence on any singular partner type. Just like the stock market, ensuring well diversified and distributed streams of revenue reduces risk for the brand if something were to go awry with said partners. That said, brands also need to understand that how they partner will determine their results.
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A Nuanced Approach to Commissioning
A diversified approach to partnership requires a strategic and thoughtful approach to commissioning as well. After all, a coupon site that delivers slim margins on sales should not be compensated in the same way as a content site that consistently delivers high lifetime value customers with robust margins.
Due diligence on this aspect is vital. Among other things, smarter commissioning means being able to dynamically assign compensation based on a wide array of parameters. Yet, not every platform or provider has a straightforward approach to dynamic commissioning, to logically reward appropriately for partner contribution along the path to purchase. Ultimately, the parameters should align to brand objectives, which can extend right down to the product itself. For example, if your company has a glut of leather jackets but is nearly sold out of windbreakers, you should be able to incentivize your partners to move leather jackets versus others.
Other commissioning tactics that align to a brand’s objectives might include offering higher commissions for surplus inventory, extending one-time bonuses to partners for helping to drive mobile conversions, offering higher commissions for specific flight routes, excluding commissions on low margin products like electronics, or applying hybrid commission tactics like flat commission and a percentage for premium placement within content commerce.
In the end, a dynamic partner marketing program requires dynamic partner discovery, recruitment and commissioning. Don’t settle for one-size-fits-all capabilities.
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