Having an affiliate program is an accepted part of the travel business, but no one ever really questions it and most companies selling their own scheme have limited expectations.
NB This is a viewpoint by Kirill Khromov, CEO for Vivaster.
Stuck in the past
The last time Tnooz wrote in detail about affiliate marketing was four years ago and touched on the same painpoints we seem to have today.
No-one should be surprised. The mechanics of B2B sales have not changed for ages: salespeople energetically seek out new clients and are only interested in selling their product rather than trying to work out the best solutions for both parties’ needs.
In travel, partners sign an affiliate agreement, then try to make it work without any actual strategy, hoping for a boost in sales that rarely happens.
A truly disruptive change is needed to transform affiliate markets into a beneficial channel for everyone.
We can compare affiliates with treasure hunters hungry for gold, but instead of selling them a map, brand owners hand them over a spade and say "start digging". But if the spade-seller also helps the prospector decide where to dig, both sides have more chance of success.
We believe there is a way an affiliate program can and will work.
Applying expertise instead of band-aid solutions
Often companies use revenue as a major draw card for their partner program, others may focus on integration tools such as deep links, widgets or white label solutions. Others just sell their brand, which in their opinion, is the same as selling customer loyalty.
But very few offer customized, research-based solutions that will work for a specific merchant.
We think that affiliate marketing can be brought back from the brink but only if it starts selling expertise.
You have to gather data from your customer segment, research the business you're going to partner with, build a conversion funnel, find its bottleneck and apply your expertise to this model.
You need to focus on how your product can contribute to growing your partner's business, instead of simply inflating numbers.
An affiliate program is in most cases based on the upsell model. But instead of offering a commission, why don't you look for ways your product can increase your partner's conversion rate?
Better conversions or lower abandonment rates usually affect business growth more than commissions.
Affiliate program that assists growth
Before presenting our affiliate program to a prospect, our marketing and development managers design a viable business model based on data. We find a way to develop the potential partner's business, and write five to seven business cases to illustrate the benefits.
And when we sign a client, the team continues working on program optimization, tracking the analytics and continuously improving the value chain.
Customization is the key
There's another thing about affiliate marketing that sometimes repels potential partners: you could unintentionally steal one of your partner's leads and switch them to another partner. We have technology in place which not only prevents this cannibalisation from happening but also allow our programs to be customized in terms of inventory.
Conclusion
We believe that it possible to revive affiliate marketing in the travel space. What is needed is for sales people to provide business cases and for the affiliate program itself to integrate into partner's operations and to be customizable for every new partner.
If this happens, effective affiliate programs can help companies in the travel sector work more closely together and contribute to each other’s growth.
NB This is a viewpoint by Kirill Khromov, CEO for Vivaster.
NB2 Image by DWS/BigStock