In a challenging economic climate, like what we’re all dealing with at this moment, it’s common for companies to consider scaling back budget and cutting costs where necessary. This is especially true regarding marketing budgets.
While there are many digital channels that can offer considerable value in terms of top-of-funnel branding, there are far fewer that have the capacity to cost-effectively drive trackable, measurable, bottom-of-funnel results.
The affiliate marketing model is one of the few channels where brands spend their marketing dollars after results have been generated.
Therefore, stopping or pausing an affiliate program in an uncertain economy is one of the riskiest things a company can do – for their brand and their overall business.
While other marketing channels require brands to pay flat-fee costs up front—an inherently risky structure in an uncertain economy—affiliate marketing programs protect businesses from wasting investments on channels that don’t lead to sustainable revenue.
Here are three reasons why pausing or stopping your affiliate program is likely to do far more long-term harm than short-term good to your business:
1. In comparison to other channels, affiliate marketing has controllable, measurable outcomes.
Affiliate networks and SaaS platforms enable a transparent attribution and commissioning process that rewards partners based on the most important marketing touchpoint.
Measurability is the key differentiator in an affiliate model that drives the best outcome for both brands and affiliates. Businesses can determine exactly which marketing partners are producing their desired outcomes and commission them accordingly, rather than investing budget in marketing channels with murkier outcomes and conversion rates.
In the current business climate, it’s natural to worry about budget allocation. That’s why investing your marketing dollars in channels that can ensure marginal profit for each sale is a low-risk budgeting option and a smart decision.
It’s essential for brands to evaluate their affiliate budget in terms of ROI, rather than set budgets; paying a percentage per sale allows brands to set their marketing spend as a portion of the revenue KPIs they’re trying to hit. Leaning into your affiliate channel during difficult economic times offers less risk, stronger results and an opportunity to scale performance.
2. You could harm your relationships with valuable marketing partners.
A successful affiliate marketing program is built upon trusting relationships that are cultivated over a long period of time. It can be challenging to resume relationships with your performance partners® after a pause. Even if affiliate partners are willing to work with you once you’ve “un-paused” your program, it’ll still take them months to ramp back up to their previous level of performance. In the worst case, those partnerships may never return to their peak productivity.
It takes months and years to build highly profitable partnerships, but it only takes one decision to undo all that progress. Pausing an affiliate program causes a significant loss of trust with a brand’s partners and could result in widespread, negative optics within the affiliate industry.
3. Long-lasting performance implications.
When we’ve had clients who have paused their affiliate program, most have experienced a 20% to 40% performance momentum loss over a 4-6-month period (contingent on downtime), as a result from traffic declines and removal of tracking links.
Customers who interact with your partners will likely migrate to a competitor if an affiliate program is paused. Additionally, a brand may experience a downturn in customers acquisition and a decrease in consumer awareness, both of which can lead to long-term losses.
Affiliate marketing is built on transparent, trusting relationships where brands and partners set clear expectations and don’t demand upfront money for empty promises. The affiliate model is a lucrative way to stay ahead of the game, maximize your ROI and make sure you’re paying for outcomes that matter. As a stable, scalable, relationship-oriented marketing channel, it’s one of the best places to invest in times of economic uncertainty.
To learn more about how your affiliate or partner program can best support your online business, please reach out to our team.
Co-authors Casey Morrissey and Amanda Madajewski are Senior Account Managers at Acceleration Partners