New vs. existing customers in the affiliate channel
It’s fair to say there has been a lot of chat in the affiliate industry recently centred on the new vs. existing customer split. Different commission level splits for new and returning customers in the affiliate industry is nothing new, especially in the retail sector, but some recent developments in relation to this rightly has affiliates up in arms.
When news surfaced that certain retailers had lowered commission levels for existing customers to a whopping 0%, affiliates took to the PerformanceIn forums to vent their frustration. What exactly are they to do with a brand who isn’t going to pay anything for existing customers? And how exactly are they meant to ensure they only referred new customer through to retailers’ sites?
Affiliates of course have no control on the customers’ status they refer through. It’s laughable to suggest otherwise. This leads to great uncertainty for the affiliate, not knowing come validation time if the sales they’ve made will result in a big fat zero percent pay-off. In order to address this issue, the website Merchant Spotlight was set up to address issues such as 0% commission levels.
Affiliate Window have also recently published a white paper on the subject. To be fair to them, they adopt a fairly pro-affiliate stance on the matter which is pleasing to see.
While I fully understand the need for different commission level splits at a product level, I’ve never advocated to split commissions between customer types. While affiliates is an excellent channel for new customer acquisition, I don’t think affiliates should be unfairly penalised for the type of traffic they send through. 0% commissions are not the answer and I hope the retailers involved soon see the error of their ways.
by Sean Mahon, Affiliate Team Leader