Marketing Initiative | 1. Growing the Affiliate Reward to 300%
This is part 1 of our Marketing Initiative series.
We recently announced a set of strategies and tools that together form a strong marketing initiative, aiming to breach into the consumer market.
As part of this initiative, we announced that the affiliate reward will be raised from the current 1% to 3%. But what does that mean for you and how can you take advantage of it in your affiliate strategy?
Useful Statistics
Let’s start by looking into real data gathered from our own marketplace.
Up until this moment, LockTrip hasn’t spent a single cent on marketing and was able to generate roughly 200,000 USD equivalent in bookings over the last 12 months. These were placed by 189 unique users.
A quick calculation shows that 200,000 USD spread across 189 users results in an annual spending of roughly 1,058 USD per user. While these numbers will certainly vary over time, they already allow for valuable context.
Applying a 3% referral reward on the average marketplace user results in an annualized revenue of 32 USD. This is just the beginning though. Since the LockTrip affiliate program allows for a lifetime income, this would translate into a cumulative revenue of 160 USD within the first 5 years.
At these numbers it is important to remember that we are still talking about a single referral. Multiple referrals may yield a multiple of that.
Growing Your Revenue Stream
We calculated that the average active referral is worth roughly $160 within the first 5 years. Someone who has set a target of adding 1 active referral per day to his portfolio could thus generate a total value of 4,800 USD each month or 58,400 USD per year.
However, it is also important to note that these revenues will not be yielded instantly. They will come in a steady revenue stream, which is why it makes sense to think in terms of monthly incomes.
Based on the above calculations, adding one active referral per day would allow for the following monthly incomes:
- 80 USD per month after 1 month
- 240 USD per month after 3 months
- 1,000 USD per month after 1 year
- 4,800 USD per month after 5 years
Building your Strategy
When designing your strategy, it is very important to keep track of the financials. As it is evident from the above calculations, your revenue stream will be small at the beginning and steadily grow the more you work on it.
Reflecting this behavior in your start-up phase is of critical importance. Let’s say you have 1,000 USD that you want to dedicate towards your new affiliate career. If you spend all of it on an unproven strategy, you risk going out of funds should it turn out to be inefficient.
This is why it is very important to only dedicate small amounts at the inception stage:
- If your strategy turns out to be ineffective, you should modify or abandon it for a different one. The small amount of money you will lose is the cost of the experiment, that yielded you valuable experience.
- If your strategy turns out to be effective, you can slowly scale your budget as your income grows.
Growing your Strategy
When you have identified a working strategy, you have won. All you have to do now is to grow it in terms of efficiency and execution. What is the best way to do this?
It is tempting to invest all your resources at once when you see the first signs of success. However, it is important to not follow the temptation prematurely. Strategy optimization needs time and care. It thus makes sense to work on a plan that divides your budget into multiple stages of growth.
In the first stages of execution you will certainly come up with new ideas on how you can improve your conversion rates or capital efficiency. Implementing these ideas and confirming their effectiveness is a vital part of growth. Even improving your capital efficiency by 20% will work wonders in the exponential growth stage that will follow later on.
Scaling your Strategy
This is where the 3% lifetime income shines. It allows you to grow your operations exponentially. The more referrals you have, the higher your revenue stream becomes and the more you can invest in acquiring new referrals.
It thus makes sense to start scaling as quickly as possible, as the most determining factor with exponential curves is time. By the time you reach the scaling phase of your career, you will likely have built a small asset of referrals that start yielding you a consistent stream of revenue.
Don’t hesitate to reinvest this revenue immediately. With a proven strategy and a solid revenue stream, there is nothing that holds you back any longer.
Equipping Affiliates with Powerful Tools
The 3% affiliate revenue allows us to equip you with powerful tools such as customizable Gift Cards and Patreon-like Landing Pages. If you want to learn more about these, we recommend to read our main article that puts all affiliate elements into context.
LockTrip is the first marketplace with 0% commission where you can save on average 20% on your hotel and rental bookings compared to anywhere else. Read how to buy LOC tokens here!
