But where does luxury fit into all of this? More luxury brands are letting go of the outdated associations to the word ‘affiliate’ and exploring what the channel has to offer. From helping to get in front of wholesalers, to increasing coverage with editorials - here’s a guide to help start out, or build on existing affiliate programmes.

The Basics of an Affiliate Program

There are three basics needed to get right when building the foundations of an affiliate programme; the reward offered to affiliates, how the sales will be tracked and the publisher mix.

Commission

The starting point of any affiliate programme should be deciding the baseline CPA offered. As a luxury brand, the commission rate offered to publishers should be higher than the average benchmark as the products are at higher price points, therefore affiliates will be driving less volume than other brands, such as those in fast fashion.

However, finding the ‘sweet spot’ is important here. Start with reviewing your margins and what you can afford to give affiliates, starting low to ensure you have capacity to introduce a commission structure with flexibility, to reward more valuable publishers with a higher rate. 

My advice for a luxury or premium brand starting out would be around 6-8% baseline flat rate. However, if new customer acquisition is a high priority, or particular product groups have higher margins than others, then commission groups should be considered.

Tracking

Choosing the right tracking partner and ensuring the best setup to fit the needs of the brand will ensure the affiliate programme is as maximised as possible. Global networks like Awin and CJ offer the tools, tech and reporting needed for a well-rounded affiliate programme, whereas SaaS platforms like Impact and Partnerize are better for flexibility and broader partnerships. 

With the growing crossover of affiliate and influencer marketing, and more brands wanting to measure success past engagement metrics, more networks are offering influencer tracking capabilities, like the recent partnership of Mavrck and Rakuten, and CJ Affiliate and CreatorIQ. 

Partners

Creating a diverse partner pool where there is no reliance on one publisher type should be a top priority. Utilising different publisher types over different retail periods (e.g. investing more in Comparison Shopping Services through sale), means brands will get the most out of their programmes. A well-rounded affiliate programme should include: 

• Incentive publishers to drive volume and remain competitive

• Loyalty publishers and CUG to reward customers

• Shopping publishers to drive new customers with high intent

• Influencers, editorials and content publishers to build brand awareness and target new audiences

• Tech publishers to increase on site metrics

Nurturing a Luxury Affiliate Program

Nurturing partnerships is the most important, yet time consuming part of an Affiliate Marketer’s job. The more communication and relationship building with partners, the more brands get in return, with stronger results and more valuable insights. A nurturing strategy could consist of a few actions, from welcome packs through to events.

Welcome Packs

Like affiliates’ media packs, a partner welcome back is a great entry point to the brand. Including the brand story, key products and collections, key periods, how you reward your affiliates and how to join your programme is a great point of reference for the publisher. 

Newsletters

Newsletters ensure affiliates are always in the know around new collections, campaigns, offers and sales.

Imagery 

Luxury and premium affiliate programmes have the advantage of access to high quality campaign imagery and lookbooks.

Events

Inviting affiliates to PR days is a great way for them to become more familiar with the brand and to meet the faces behind the email threads. Networking events like Affiliate Huddle and PI Live are also great to meet networks, affiliates and agencies.

Gifting and Samples

Keep in mind that there are publisher types that need products or samples to be able to promote brands, particularly to influencers and some content publishers. Sending a gift to high performing publishers is also a great way to acknowledge the affiliates efforts.

Working Alongside Luxury PR

A common question when proposing affiliate content or influencer opportunities to brands is how this all fits with their PR efforts. As more editorials and influencers increase the ways they monetise their content (particularly with the likes of Skimlinks and LTK), it’s important to view the affiliate channel as more of a support to PR efforts. 

It’s important to ensure the PR team has visibility of the brand’s affiliate programme, as it can offer valuable insights past the vanity metrics. Affiliate content campaigns can also be viewed to ‘fill the gaps’ of any failed organic placements, and new platforms like Linkby can offer quick turnarounds on placements through the CPC model rather than fixed fee. The affiliate channel can also accelerate influencer activations through third parties and subnetworks like Metapic, Shopstyle and LTK Connect.

Managing Incentives for Affiliates

Gone are the days where luxury and premium brands say no to incentive publishers. Utilising these partners and ensuring luxury brands only partner with two to three leading sites per market, creates a controlled environment for them to leverage during sale periods, reducing excess inventory and offer codes as a workaround of offering blanket discounts on site.

Introducing incentive publishers and an incentive strategy can also help with competition of wholesalers. Just being present on code and cashback sites that the customer may shop around on before making payment may reduce basket abandonment and the loss of that customer to a reseller.

Maximising a Test & Learn Strategy

Finally, a robust test and learn approach is key to affiliate programmes success, even for mature programmes. Test and learn strategies can be done through ensuring there is a budget for non-CPA activities like fixed fee and CPC. Test and learn commission increases in return for exposure or increasing the reward to the publisher, and finally, test and learn with different publishers per publisher type to see which is more valuable to the brand.

Summary

To round up, below are four key takeaways to ensure luxury brands reap the benefits of their affiliate channel:

• Laying the foundations and building a base of diverse and aligned publishers sets the affiliate programmes up for success

• Investing time and developing a nurturing strategy means brands will get the most out of partners

• A test and learn approach with budget and publishers is key

• View the channel as a support to PR; filling the gaps, measuring campaigns and sharing insights.

If you need any help with building or growing your affiliate program, don’t hesitate to get in touch.