Affiliate League Performance Analysis & Payouts
In this article we want to share with you some data about the first season of the LockTrip Affiliate League, along with comments from our perspective and additional info on how the payouts will be made to league participants.
Let’s dive in!
Golden Debut League Key Stats
Participants of the Golden Debut League referred bookings worth a total of $92,000 — representing 632 room-nights.
Considering the $24,000 prize pool allocated for the season, this puts the average cost per referred booking at roughly $105.
Out of the 5,114 new users referred, roughly 4% made a booking before the end of the season. Notably, there was a significant deviation among the affiliates. Looking into the affiliates who referred at least 100 users, the percentage of referrals making a booking varied from 1.2% on the low end up to 9% on the high end.
Interpretation of the Data
Looking at the numbers, they paint a mixed picture. We see for example that individual affiliates achieved very different levels of performance — not only in terms of raw referral count, but also regarding the quality of referrals (% of whom booked).
It’s impossible to draw a conclusion based on the % booking rate alone. For example, an affiliate who targets lower quality traffic will generally have a lower cost per acquisition. To illustrate this, let’s take a hypothetical example:
Affiliate A:
- Cost per referral = $1
- Referral booking rate = 1.5%
Affiliate B:
- Cost per referral = $8
- Referral booking rate = 9%
Even though Affiliate B has a 6x higher booking rate, this quality comes at a 8x higher cost per referral. Which means that the calculation for the cost per booking is what matters most:
Affiliate A:
$1 / 1.5% = $67 per booking
Affiliate B:
$8 / 9% = $89 per booking
Since we don’t know the cost basis for each of the campaigns ran by affiliates, we can’t deduct conclusions based on just that. What we can conclude however is that the quality of referrals is confirmed to vary a lot, which should be considered for future campaigns.
Although we don’t know the cost-basis from the affiliate’s perspective, we do know it from the marketplace perspective. Each season of the league comes at a cost of $24,000. Dividing by the number of generated bookings results in an average cost of $105 per booking.
There is however one flaw in the calculation. It assumes that without the league there wouldn’t have been any affiliate activity — which of course is not accurate. Comparing with previous numbers, we can deduct that the league boosted activity by roughly 150%. Adjusting for that factor, we end up at roughly $175 in league rewards per “surplus” booking referred.
On top of that, there is the 3% affiliate reward + often times an additional 3% in dicount code bonus paid by LockTrip. All in all, we can round the total cost to $200 per booking that can be attributed to the league.
Conclusion of the Data
Considering the above calculation, we can conclude that the league has turned out to be less capital efficient than initially anticipated. There are likely several reasons to this:
- Current affiliates are mostly in the learning/experimenting phase of their activities, with little previous experience
- The number of competing affiliates in the league is relatively low
- Affiliates lack in-depth feedback data from the marketplace to optimize their campaigns. Although the landing pages offer full-scale Google Analytics support and Facebook Pixel integration, not all campaigns go through them and even if they do, tracking does not expand into all sections of the marketplace
- Some conversion-boosting features that are currently under development, such as the email marketing system or upgraded landing pages were not implemented yet
This is further augmented by the second season of the league which is actively running and shows a drop in affiliate activity when compared to the first season.
Action Plan for the Short and Medium Term
Considering the above takes, it makes sense to evaluate our current setup and compare it with the set of opportunities laying ahead of us.
On the positive side…
Since Sept 2022, LockTrip has put a high priority on seeding its marketing department. Considerable resources and energy has been put into making this a reality and trial campaigns are already in full swing.
Even though our in-house marketing campaigns are still in their trial phases, we are sufficiently confident that their capital efficiency is significantly higher than what the league achieved in its trial phase. Based on preliminary data, we estimate the core marketing campaigns to be +100% to +300% more cost-efficient than the league performance.
Following the pursuit of maximizing results, we will therefore be pausing the affiliate league after the conclusion of the current season, in order to prioritize our in-house marketing campaigns and we will be relocating the budget from the affiliate league onto these campaigns. These will have several advantages, some of which are listed below:
- Confirmed advantage in capital efficiency, resulting in more users and bookings per $ spent
- Faster scaling of the in-house campaign budget, reach and impact
→ Partially addressing item 2) of the list outlined in the “Conclusion of Data” section (every new user is a potential affiliate)
- Putting outselves in the shoes of affiliates, thus allowing us to more accurately improve the user acquisition flow and solve bottlenecks as well as weak spots. At the same time polishing the data quality and feedback systems. What works for our in-house campaigns will also work and improve the performance of affiliates
→ Addressing item 3) of the list outlined in the “Conclusion of Data” section
- Using the period to further advance conversion-improving features currently in development (launch of the email marketing system, upgraded landing pages, additional tools, etc.)
→ Addressing item 4) of the list outlined in the “Conclusion of Data” section
- Developing a strategy to onboard professional affiliates before re-launching the league
→ Addressing items 1) and 2) of the list outlined in the “Conclusion of Data” section
The pause of the league will have no impact on the regular affiliate program, which will continue to operate without interruption and which is a core part of the sharing economy philosophy behind LockTrip.
Payout of the League Rewards for Season 1
We have completed our analysis of multi-accounting and other breaches of the affiliate rules. As a result, a total of 3 bookings will be disqualified from the leaderboard.
The affected affiliates will be informed this week. We are also preparing a payment form, which will be sent to all affiliates to initiate reward payouts.
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LockTrip is a blockchain-based travel marketplace that allows users to save up to 60% on their bookings by cutting out middlemen. Every booking burns LOC proportionally to its booking value, continuously reducing its total supply.
