You're listening to the Affiliate Marketing Podcast, a podcast for digital and affiliate marketers who want to launch, scale, and grow successful affiliate and performance marketing programs. In this podcast, you'll learn how affiliate and partner marketing is constantly changing. Get behind-the-scenes access to a variety of digital and affiliate marketing experts. Access hours of value bombs and tried and tested tactics. Learn what's new and trending in affiliate marketing. And much more.com thought leader, the drum digital's top 50 UK agency owner, affiliate manager, industry motivator, and your affiliate marketing guide, Ian Johnston.
SPEAKER_01Earlier this year, I caught up with Lisa Riolo, a founder of Impact.com and advisor. We ended up chatting for over an hour together in this session, offering so much value that this segment was cut in to offer a mini fireside chat, covering something really important for affiliate program managers to listen to. The topic is program segmentation. Now, if you're not segmenting your partners properly in your affiliate program, listen in here now to understand why it's so important for your business in 2023.
SPEAKER_02I want you to go back just a little bit. You had mentioned earlier, um, you were talking about there was the tech audit or the review that we were going through, but you also mentioned something, and I just wanted to kind of pull on that thread, and it was about segmentation. Yes. So in the publishers. And I think again, on this theme of how do we build stronger relationships or better relationships, more effective relationships? When you think about segmentation, how do those two things come together? How do they crash? And where's what what other advice do you have within that?
SPEAKER_01So segmentation is very data-driven for me. When I'm talking about segmentation, I'm talking about looking really deep, not just at the surface delivery that your partners are giving, and then segmenting them out into buckets. And it sounds really simple again, but when you segment your partner database, you see your weaknesses. Because when you're looking at the total value of your affiliate program, you're going, oh yeah, here's my top 10 partners, and that's great. I can keep them happy. And here's the next 20 that I'm going to focus on for this year. And then there's this whole long tail of partners that just sit in the background doing whatever they're doing. And those numbers change depending on what kind of program you have and all the rest of it. But more often than not, when I have an affiliate manager on my um training program and we and we talk about program segmentation, nine out of 10 of the people that are in the cohort will come back to me and go, We're too heavily invested in SEO affiliates because they're easy to find, because they're easy to recruit. We're not actually touching other niche verticals of traffic sources where our customers are hanging out. Because they've started with recruiting affiliates as the main objective of their program instead of understanding who is my customer and where is that customer hanging out and what types of partners would be talking to those customers. So I would say my advice on segmentation is to start with your customers first. Who is your customer that you want your partners to attract?
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SPEAKER_01And then work backwards from there and go, okay, these are the types of partners that I need to be going after. And then make sure that you've got a mix because I mean, I'll just give you an example. So a gaming client would say, Yes, I want, you know, males between the age of 18 and 45 who want to bet on sports. Inside that segment of customers that you're talking about, there's the 18 to 25 year olds who want to go to like, you know, popular matches and have VIP tickets, and then there's the 45-year-old who wants to watch it from the comfort of his seat and then maybe go to a box or have a real life experience that he hasn't been able to afford. Or, you know, there's just so many different variations of an 18 to 45-year-old. And if you're not segmenting that customer base and working backward to figure out what kinds of partners are going to get you the 45-year-old, and what kinds of partners are going to bring you the eight, you know, the 21-year-old, how are you going to figure out what partners to recruit? So really go deep into your customer avatars and then work backwards from there to figure out what kinds of partners you need to be working with and always make sure you have a good mix because you cannot always be heavily reliant on just one type of affiliate partner to drive your program forward. You will eventually tap that out. And and it's just not healthy. It's not a healthy strategy.
SPEAKER_02Right. Yeah. And I'm gonna, okay, first of all, everyone that's listening right now, in my opinion, right there, I mean, you just got so much gold. Like that is just right there, those you know, couple minutes is worth 10x your time in terms of value. So that's my first thing that I just want to say. And it's just it's such a tremendous insight. And it's a really what you have revealed is into, in my opinion, sort of the real heart of a truly effective partnership program. And why I say that is because as you think about a mix and you're thinking about reaching the consumer, so now what you're looking at is the consumer is going on a journey to find you. What you're also able to do now in that affiliate program through the relationships that you're building in your partnerships is tapping in not only to the customer that you know about, but you also get an opportunity to discover the consumer that you didn't necessarily know about. You didn't have that persona. Um, I worked with an affiliate program one time that was using high definition security cameras. So there was this partner in their affiliate program that was sort of like occasionally sending them some traffic, but their average order value, as small as it was in a percentage of overall revenue, was significantly higher than all the other folks. Well, it turned out, which I always just find so cute. They were um birders, is that what they're called? Where they were watching birds in and they set these cameras because they were high definition off into nature so that they were able to, you know, uh identify and discover the birds that were in their area. And so it just became this amazing thing of you don't always know who the product that you're gonna have. So one, I just you have tapped into sort of a much broader opportunity for growth within a program, um, but doing so in a way that's extremely data-driven. And you don't, you you can't always just look at more of the same. So that's my first point. And I think um I'm really excited that you talked about it. And then I think the other point that I would like to make or actually ask you, and then is is from there is how do how does someone, an affiliate manager in particular, get access, if you will, to budget or ways in which to do that sort of innovative discovery within that mix? So, in other words, it's like, I've got my head, I've got my body, and I've got my tail when I think about my segmentation, which is based on performance. How do I shift budget out from the area of we know this works and we just keep doing more of the same and into those areas where you don't really know? And it's it's relatively low risk when you do it on a performance basis, but it's still a shift of budget. How do you do that?
SPEAKER_01You have to go back to the data as well. And actually, every affiliate manager listening to this podcast, you've touched on a really important point. We are often too scared to test because we are driven by targets and we need to meet quotas. Yes. That's actually killing your creativity as an affiliate manager. So the best thing to do is to set aside some of your budget for your portfolio management, even if it's like 10% of the total portfolio budget that you have, and actually use that for consistent testing month on month on month on month, and fig you you have to kiss a lot of frogs to see what works. But like you said, and I've had this experience in in my 20 years, where we thought we were promoting a product, and and it was actually an e-wallet. We thought we were promoting a product because of the payment value. And what we were actually doing is promoting the product because of the safety and security that it gave the customer because it was anonymous, it was, you know, um regulated by all the governing bodies, but it wasn't their personal bank account. So nobody knew what was going through their e-wallet and what transactions, where they were playing, what they were doing, where they were spending. There, and there was this level of security that customers enjoyed, not the efficiency of the wallet. So it wasn't about the fact that the money could be moved from one place to another. It was the fact that the customer actually wanted the security, knowing that nobody else would know where they're spending their money. Yeah. And whereas your bank account is public. It's you know, anybody can, you know, the government can request your bank statements, etc., etc. And that tiny like loophole and and relevancy, we didn't even know. And that actually uncovered a whole other segment of customers, high net worth individuals, that wanted to have that security. So while we were tapping into like the man on the street, going, hey, here's an easy way to transfer money to your family, or whatever the case may be, because it was instant. We actually ended up realizing that there was this whole niche segment somewhere else that we could actually tap into and create a product for using the same Rails that we had. And created a whole new marketing campaign and spared off a whole new revenue segment. So test, test often, but test small. You know, don't go crazy. Just do those tests, figure out what's happening, look at your data because your data will tell you what kinds of customers are coming and where the value is coming from, if your technology stack is good. Um, and remember, point one was review your tech stack this year. Um, and you know, just keep it real, have have conversations and go to go to events and go to other events where you haven't been before to go find new partners.
SPEAKER_02Yeah, I agree with that. And I I'm gonna I'm gonna add one little extra piece to um what you said for, and this is true for agencies and affiliate managers, et cetera, which is create a feedback. So you have what you're talking about in many respects is this a type of a feedback loop where your partners are giving you access to a consumer. That feedback loop also needs to bounce back through your organizations or your clients. So you also have to share. So I've you know, I've seen this and it's really effective is at the beginning of of a year where there's usually some kind of a you know, sort of a QBR type process where you're going in and oftentimes you have leadership. Share with leadership. I've taken 10% of the budget, I've put it over here for a certain amount of testing. We want to share with you back the data that this has revealed for us. Also, and and you made these really great points with the example of the wallet, that information should get to product. So, whatever, what you know, however you want to call it. Because now what you've seen is the value of your partners is so much more significant than just the revenue that's been driven through the channel across the existing SKUs, but also potentially you've got new SKUs, you've got new audiences, which also filters into the other aspects of marketing, right? The brand awareness building, all of the kinds of things that are really important. So I think this feedback loop and this notion of communication is you've now, uh Leanne, shared a really critical strategy for folks, but make sure that that strategy is also getting, you know, amplified, so to speak, into everyone else uh that also has, you know, a that's a stakeholder or in some uh way sponsoring your activity. And I really want to make sure that people understand um this is part of how you also develop and build your career and your awareness, right? Is that those kinds of things help you uh to really make an impact within your organizations that you're working with or with your clients, and you're able to get testimonials that turn around as an agency and allow you to go out and get new clients because of what you've done for your existing clients. So I just this was such an important area for us to talk about. I'm so excited that you shared this information for everybody.
SPEAKER_01So there you have it. Keep testing new sources of traffic, keep attending new events to find new partners, because you may be looking at your program and product offering one way, but believe us, your partners are seeing a much wider spectrum. Ask your partners what they're doing, what they're seeing, and what their customers are telling them, because it may open up new avenues or marketing campaigns that can target different niches which prove to be profitable for your business. Feed this back into your organization and into your leadership teams too, so they can understand the impact of these behaviors and adjust your partner program strategies to meet these new customer demands. There's no denying that this year is going to force you to think collaboratively, to be pushing a blue ocean mindset, and to be open to fostering new brand partnerships and ways of working and supporting your partners to help elevate your business to grow. I hope you found this segment interesting, and a special thanks goes out to Lisa Riolo for making the time to share this conversation. It's my pleasure to have you on as my special guest.
SPEAKER_00That's a wrap for this week's affiliate marketing podcast. If you're loving what we're putting down, why not head over to Apple iTunes and give us a five-star review? Make sure to subscribe to our podcast and our YouTube channel so you never miss another insightful episode or one of our free webinars ever again. Tune in next week for more digital affiliate marketing insights, trends, tips, and content to keep your affiliate and performance marketing fresh and your partners driving consistent sales.