How can I manage the ROI of affiliate marketing?
Basically, there are three cost centers for a merchant running an affiliate program.
You’ve got the commissions to affiliates, affiliate manager or team, as well as the cost for the technology or affiliate network you are using.
Add all of those components up and subtract them from the revenue generated by the affiliate program, and you can determine your ROI.
Just tweak that around until it works for you.
One thing to bear in mind is that one of the biggest costs in affiliate marketing is to roll out a lousy affiliate program.
If you have an offer that is not compelling or a site that is not converting, it can doom the affiliate program.
Do a lot of fine tuning until your affiliate program is as good or better than all of your competitor’s affiliate programs.
Otherwise, you’ll find that you have a lousy ROI.