How Much Commission to Pay?
One of the key decisions in launching a new programme is the rate of commission to pay affiliates. This rate contributes to how attractive a programme is, which in turn will influence affiliates to sign up and promote you (or not!).
Whilst you must carefully consider what you can afford to pay, there are a number of other instrumental factors to consider.
- What is the competition paying? If you can beat it, do so. If not, think about how you can add value in other ways. For example, some affiliates place greater value on being paid quickly, rather than be paid more and having to wait
What is the lifetime value of the customer? You might just pay the affiliate a percentage of the customer's first order, but considering how much that customer is worth to you over a lifetime will justify a more competitive rate of commission
Should all affiliates benefit from the same rate? Remember that your commission structure needn't be flat. If you'd like to incentivise a select few affiliates, you can set them targets and adjust their rates accordingly