Affiliates are individuals or businesses who promote your company or a specific product. When they refer someone to you and you make a sale, then they generally receive a commission. This type of performance based marketing should be an easy choice for you. After all, if you don’t win, you also don’t lose.
The remuneration for affiliates is generally calculated as a percentage (this can be every percentage, from 5 to 50 percent) and sometimes a fixed rate for each sale. Sometimes an amount per lead is used, or lead fee.
THE DESIGN OF YOUR COMMISSION STRUCTURE
It’s tempting to get started with a thoroughly planned out commission structure, including variable percentages for each type of product, etcetera. Sometimes, in order to attract many affiliates, a very high commission is offered as well. In practice however, affiliates want clarity and they get disappointed in a program when the commissions are suddenly adjusted downwards.
It’s advisable to start with a standard rate, regardless the type of the product. It’s also better to not differentiate between new and existing customers. After all, the affiliate can’t check this, which can cause the trust in your programme to quickly diminish, when it turns out that the affiliate mostly refers existing customers to your offer.
Instead of a quick start with a very high commission, you better also ensure clarity. You can, for example, ensure clarity by using a standard rate right from the start, but also offer a bonus to your affiliate, for a limited time.
Just like in every sector, there are also fraudulent affiliates. Some affiliate programs therefore opt for a strict payment policy, for example only for net orders and only after the legal return period. Others, however, are distinguished by a daily payment on the gross orders. In the latter case, it’s advisable to fix a maximum rate for the first days or weeks.
COMMISSION BASED ON ATTRIBUTION
The most complex part of your commission structure is probably about who gets which commission. When the affiliate refers someone to you, then the basic rule is mostly that he receives a commission if, during a certain period, the visitor converts into a customer. This period mostly lasts at least 30 days. This is technically realized by placing acookie on the computer of the user, so he can be identified as coming from you by future visits. This far, it’s simple.
It often happens however that someone visits your offer after more than 1 referral. Someone can, for example, choose for you after reading a blog. He notices the possibility of a discount code on your order form, after which he scouts the internet to find a discount. Through a coupons affiliate, he comes back to finish the order.
When you apply the so-called last-click attribution, then the coupons affiliate will receive the sales commission, while your offer was first found thanks to the content affiliate who wrote about it. By means of an attribution-based commissioning, you can make rules that assign the commission to 1 affiliate, or divide it up evenly among more persons, based on predetermined rules.
In order to not raise false expectations, and to maintain a sustainable cooperation with affiliates, it’s essential to clearly describe the rules of your program in a so-called affiliate policy. This policy is sometimes completed with practical examples and screenshots. Of course there’s also no lack of a contact person.
Transparency also means giving insight in the results that were achieved by the affiliates. E-commerce players generally give affiliates a so-called UTM code, that they incorporate in their hyperlinks. This code makes sure that you can monitor which customer has been referred by who. The click-throughs and sales are then made available for the affiliate in a diagram or a table.
While the possible commissions are undoubtedly the incentive for whether or not becoming an affiliate for your offer, affiliates increasingly choose for brands who commit to support their affiliates with various marketing materials.
Because we’re a visual species (an image sells more than 1.000 words…) it is a minimal requirement to offer the affiliates a professional product photography. To make it easier, every photo has a clear description. The photography generally comes together with the necessary product descriptions. Other creative material (such as banners, screenshots, etcetera) is regularly offered. And even better, the affiliate is offered a unique content or a unique offer.
In addition, the affiliate receives – sometimes even as a condition to be allowed to participate in the program – clear guidelines about the use of logos and other elements concerning the corporate identity.
To be sure that affiliates always promote the latest offer, they regularly receive updates about the program. The more advanced affiliate programs even automate this with APIs or alternative data feed around the portfolio.
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