Tenancy investment – How much is too much?
Last year we commented on tenancy investment, and the growth in these opportunities in the affiliate channel. Unlike the traditional commission model whereby affiliates are paid on conversion only, tenancy investment secures prominent exposure in affiliate newsletters and homepages, and can be a really effective means of driving incremental traffic and sales. But when it comes to tenancy investment, how much is too much? We take a look at the factors to consider when deciding whether or not to recommend these opportunities to our clients.
We'll always consider the affiliate's average weekly performance for the client in question, and forecast the uplift we can expect from the increased exposure. On top of that, consider the amount of tenancy investment required and whether or not this is worthwhile for the revenue uplift you expect. For example, if you expect to achieve an uplift of £500 but the tenancy placement costs £1,000, it might not be worthwhile. That being said, we'll always give consideration to the bigger picture, and sometimes the investment is worth it for the long term brand awareness achieved, and the doors opened for future opportunities with the affiliate.
Affiliate reach and performance are key factors too - if the affiliate has a database of significant size, with strong email open and click through rates, we'd considerate it a worthwhile opportunity, as long as the audience demographic is appropriate to the client in question.
If you're going to take the leap into tenancy investment, be sure to do so at a time when you can offer a compelling proposition to the end consumer. There's no point placing your brand in front of a vast and new audience if you don't have anything exciting to tell them that will convince them to click and convert.
Of course, once you've tried these opportunities, you'll have actual stats you can use to forecast future performance. Don't get carried away though - if you feature in the same newsletter every week, you're reaching the same audience that could quickly become saturated, so be sure to mix things up and leave ample time between features with the same affiliate.