Have you ever wondered why some sites do really well, and others do very poorly?
Maybe you've dabbled in affiliate marketing, setup a site or two that seemed to get traffic, but never really generated any sales.
It comes down to one thing.
Metrics are the key indicators for understanding if something is successful or not.
For example, if you were wanting to track the metrics for losing weight, you'd want to track body fat percentage lost and muscle mass gained, two realistic, measurable things that are identifiable.
To illustrate this point, let's walk through a scenario that I know I've personally been down before, and maybe you've experienced something similar.
You find a market/product to promote, you setup a site, you get some content on that sucker, and pretty soon you've got some traffic flowing in.
You're thinking to yourself, "hey, I'm pretty good at this stuff!", but still you're not making any sales, there's no real cash in the door!
This continues, you get the traffic... and... nothing...
What you're suffering from is not a failed site, not a failed product (necessarily) but a failed merchant.
Now if you didn't know this, you'd probably just look at the site, throw up your hands and go "BAH! Stupid internet marketing hogwash doesn't work!"
What are the metrics that go into actually making money from affiliate marketing?
That means when you're saying to yourself, "Damn I wish I was making more affiliate sales", it's not something you can even remotely impact, all you can do is work on the METRICS, the things that make up the formulas.
Is simple, the amount of total visitors you have going to your site (you are looking for the highest qualified/targeted traffic possible)
Click Through Rate (Metric):
How many people out of every 100 visitors see the link/banner/ad, and actually click on it. E.g. if you had 100 visitors, and 5 clicked on your links, you have a 5% Click Through Rate.
Merchant Traffic (Result):
The result of the amount of Traffic you have, multiplied by your Click Through Rate E.g. using the same formula/numbers above, if you had 100 visitors, and a 5% Click Through Rate, you'd get 5 for the Merchant Traffic value.
Merchant Conversion Rate (Metric):
This is the conversion rate of the merchant you are promoting, how many out of every 100 visitors do they convert. This number is in my opinion the single biggest factor in the success or failure of an aspiring affiliate marketer, it is the one thing you have no DIRECT control over.
Number of Affiliate Sales (Result):
This is the result of the Merchant Traffic multiplied by the Merchant Conversion Rate, E.g. if the merchant converted at 5% and you sent 100 visitors (Merchant Traffic) you'd make 5 sales (100*5%).
Sale Price (Metric):
The cost of the product you are promoting - simple really...
Affiliate Commission (Metric):
The percentage you get paid for each sale you make (this figure can vary from 3% to 100% or more depending on the market).
Total Affiliate Sales (Result):
How much money you actually make at the end of the day...
So how does it look?
Let's use a site example (with nice rounded easy numbers) for a monthly period
Site A (following the formula above):
A pretty average performing site considering it's getting 10000 unique visitors a month!
So let me illustrate the power of how understanding these metrics work and show you what happens when you improve each one.
Traffic - 11000 (10% increase - you targeted some more keywords, added some extra content)
Click Through Rate - 10% ( 33% increase - going from 7.5-10 isn't hard, change the banner you're using to promote the product, add some extra links in, make it easier for them to click it)
Merchant Traffic - 1100 (rounded down because you don't get half a visitor :D)
Merchant Conversion Rate - 4% (33% increase, you looked around and found a better converting merchant for the product you were promoting)
Number of Affiliate Sales - 44 (again rounded down because you can't make half a sale)
Sale Price - $300 (same product, same price)
Commission Amount - 12% (20% increase - as you make more sales, you can usually negotiate higher rates)
Total Affiliate Sales - $1584
That's how you take a site, with nearly exactly the SAME TRAFFIC, and increase its earnings by 240%
In later articles/guides I'll target and explain how to improve each of these metrics, and things you should be looking at, but I can guarantee, that just by measuring these numbers your business will start to improve.