Affiliate marketing is the easiest way to start making money online.
All you need to do is pick a proven product and start promoting it. You’ll get a commission from each sale you make.
But you need to understand the math behind this business model if you want to be successful with it.
Today we are going to talk about the most important affiliate marketing metric: earnings per click (EPC).
Once you understand how to properly calculate EPC, you will be able to make better business decisions.
And better business decisions mean more money!
What Is Earnings Per Click (EPC)?
Earnings per click is an affiliate marketing metric that shows how much money on average you make from one click on your affiliate link.
EPC is the most important affiliate marketing metric because knowing it allows you to create profitable marketing campaigns.
How To Calculate Earnings Per Click (EPC)
Want to calculate your EPC?
- Take the total amount of money you have earned in commissions for a particular affiliate product during a specific period of time.
- Divide that amount of money by the number of clicks that your affiliate link received during that same period of time.
Let’s say that you have made $1,000 from a particular affiliate product last month.
Your affiliate link for that product got a total of 1,000 clicks during that time.
All you need to do to calculate EPC is to take the money you earned and divide it by the number of links:
$1,000 / 1000 = $1.
Your EPC for that product is $1.
The Key To Creating a Profitable Affiliate Marketing Campaign
So how can you make money with affiliate marketing?
The most common approach is to use paid advertising to drive traffic to the affiliate product sales page.
You need to keep track of two metrics if you want this strategy to work:
- EPC which we have just explained.
- CPC which is a paid advertising metric that shows how much each click on your ad costs you.
The formula to a profitable affiliate marketing campaign is this:
EPC > CPC
As long as that remains true, you are generating profit.
Beware of the Average Earnings Per Click (EPC)!
Some companies that have affiliate programs provide an EPC number that is the average EPC for all their affiliates.
That can help you get a better understanding of the business potential of that product but it can also be misleading if you forget that it’s the average EPC.
This means that most of their affiliates have a similar EPC but some have a significantly lower EPC and others have a significantly higher EPC.
You can’t know which category you are going to fall into before you run your own affiliate marketing campaign, analyze the data, and calculate your EPC.
So don’t make the mistake of thinking that the average EPC that a company provides is a guaranteed amount of money you will make per click because it’s not.
You need to rely on your own data, not on averages.
How To Increase Your Earnings Per Click (EPC)
Okay, so if you want to make more money with an affiliate product, you need to either decrease your CPC or increase your EPC.
Decreasing CPC is challenging because advertising platforms control this metric, so it makes more sense to focus on increasing your EPC.
You want a higher percentage of people who click on your affiliate link to buy the product. But how can you achieve that?
The answer is simple:
By building a sales funnel.
You see, the strategy of running ads to a sales page might be the most popular approach but it’s not the most effective one. Why?
Someone who has just heard about the product is unlikely to buy it right there and then. Expecting them to do that is naive. The reality is that cold traffic doesn’t convert well.
Think about the products you have purchased. How many of them have you bought the moment you first heard about them? Exactly.
A more effective approach is to:
- Create a super valuable lead magnet.
- Run ads to the lead magnet landing page.
- Use email marketing to pitch the product to people who have downloaded the lead magnet.
That way, you start the relationship with the potential customer by offering something valuable (the lead magnet) in exchange for a small commitment (providing an email address).
You can then proceed to offer them more value (the product) in exchange for a bigger commitment (paying for that product).
Assuming that they have benefited from the lead magnet, they will be more open to buying the product.
And if they buy that product, then you can offer them your next product, and then the next one.
This is a much more effective approach to building a relationship with the potential customer than saying “Here’s my product, now buy it!”.
How To Build an Affiliate Marketing Sales Funnel
So how can you build a sales funnel?
Affiliate marketing expert Miles Beckler recommends using this affiliate marketing sales funnel that he calls the Minimum Viable Funnel:
It consists of three pages:
- The Opt-In Page. This is your lead magnet landing page that you will be driving traffic to. A simple squeeze page can work well here.
- The Thank You Page. This is a page that is shown to the potential customer once they provide their email address. It should feature a link to the lead magnet + a thank you video where you introduce yourself, introduce the lead magnet, and ask the customer to download it. Ideally, this video should be under 90 seconds.
- The Sales Page. This is the affiliate product sales page. You don’t have to build it yourself, the company that created the product will have one already.
Once you have this funnel set up:
- You drive traffic to the lead magnet landing page.
- The potential customer gives you their email address and downloads the lead magnet.
- You send them a sales email with an affiliate link to the sales page.
Hopefully, the potential customer then clicks through to the sales page and buys the product.
If you have been driving paid ads straight to the affiliate product sales page, then implementing this Minimum Viable Funnel will almost certainly boost your EPC.
Of course, there’s much more to building sales funnels than that but if you want something simple just to get started, Miles Beckler’s Minimum Viable Funnel is a great option.
Alternatively, you can sign up for our free 5 Day Challenge, where our co-founder Russel Brunson will teach you how to build your first sales funnel (more information below).
He used sales funnels to grow ClickFunnels from zero to $100 million in revenue in just three years so he knows what’s he’s talking about!
Want to take your affiliate marketing to the next level?
Then you need to figure out how to increase your EPC.
The most straightforward way to do that is to build a sales funnel.
We have created our 5 Day Challenge to show you how to do it.
You will learn how to:
- Generate unlimited leads.
- Create your first lead magnet.
- Build your first sales funnel.
- Create a simple 6-email follow-up sequence.
- And launch your funnel!
…in just five days.
So don’t hesitate.