[maxwellgarner]

My affiliate program only pays out when a visitor signs up for an annual package. We have recently introduced another package that allows for a monthly subscription, but it's not available through the main site. How we are implementing this is with a pop-up that will only "pop" if there is no tracking cookie for the affiliate program active on the user's computer. The monthly offer has proven to be much more effective than the annual packages for the simple fact that it doesn't require a good chunk of change for an upfront investment, but we still want to offer the annual packages for those that are participating in affiliate program.

Do you think that offering the option of a monthly package (that is a better deal than the packages offered on the site) for those that find the site through our marketing efforts (other than our affiliate program) is unfair to either our affiliates or our customers?

[affninja]

If the monthly package converts so well, why not let your affiliates promote it?

[maxwellgarner]

Because 1.) There is no way to set up the reoccurring commissions and 2.) With the way the commissions are set up now, it would take 2 months to earn the money to pay the affiliates and 3 months before we would turn a single penny of profit for a new monthly subscription.

[loxly]

You need to do more reading in the Best Practices section.

http://abestweb.com/bestpractices

[MichaelColey]

Originally Posted by maxwellgarner

Because 1.) There is no way to set up the reoccurring commissions

Find a way. It can be done.

[hermedia]

Kind of timely - I have this on my to do list for a merchant running on share a sale.

[maxwellgarner]

Okay, well on the reoccurring commissions, I wouldn't be able to pay out more than $5 a month and for a biz op, $5 isn't attractive at all...Not in my opinion and I'm the owner of the company!

[Greg Rice]

Another option is to calculate the lifetime value of that customer and payout based on that. If, on average, customers stay for 3 months then you know this value. But, you need to include all monthly signups to get the most accurate picture.

[maxwellgarner]

Great advice Greg! We just introduced the monthly membership, so I don't have membership lifetime stats yet because everyone that is on the monthly plan hasn't even made it to their second billing cycle yet. I have big expectations of the monthly membership, and I would like to share it with the affiliates in the program, but to pay out reoccurring commissions would probably require a totally different affiliate program script, as well as something other than PayPal as the payment option.

[MichaelColey]

Originally Posted by Greg Rice

Another option is to calculate the lifetime value of that customer and payout based on that. If, on average, customers stay for 3 months then you know this value. But, you need to include all monthly signups to get the most accurate picture.

Be VERY, VERY careful with this. When you pay out more than you make for a one-month subscription, assuming that customers will remain a customer for an average amount of time, you will attract many affiliates that bring customers who DON'T stay anywhere near as long. See the link in my signature about CPA Networks. Even on a traditional network, an offer like this will attract most of the types of affiliates that give CPA Networks a bad name.

Don't worry about the $5 payout seeming low. Smart affiliates will get that it's a RECURRING commission. And you can always set up private commissions that pay a one-time payout based on lifetime value for trusted, proven affiliates.

[maxwellgarner]

Thanks Micheal, great advice. I think my preferred method would be a recurring commission, I just need to figure out a way I can implement it and provide tracking.

[loxly]

We have a program in Shareasale that has recurring commissions. It takes some programming on the merchant's part, but it is totally possible. And the recurring commission is a much lower percentage than the percentage for the first month, so your company doesn't have to "give away the farm" to be able pay out a fair up front payout and a lower recurring payout.

[Chuck Hamrick]

Have a hosting program that pays $90 for a $60 annual purchase because we don't have reoccurring commissions. The fraud is caught due to fake credit cards so we are able to reverse the commissions before paid.

Maxwell the lifetime value is the way to go until you can get a reoccurring commission. You may have to extend those sales for 30-60 days to avoid fraud until you can establish a track record with good affiliates.

I used to manage a genealogy subscription program that paid well for three month minimum subscriptions. After they established a strong affiliate sales base they decided to cut it to monthly which increased sales but cut the commissions by 2/3. Affiliate were really pissed but didn't have good competitive options so were stuck with it. They stayed because they had to but hated the program. Moral of the story, build the program with your affiliates and don't screw them once you get successful.

[maxwellgarner]

I think that is the way to go. I'm going to have to run the subscriptions for about 6 months to get stats so that I can make an informed decision on the commissions. Maybe this will be good because by then, I should have a really healthy affiliate base I think that releasing a new way for affiliates to earn more than 100% on a new subscription would be a great motivation to increase sales...

[Chuck Hamrick]

Recommend advertising the greater than 100% commission to your base but only offering to producers you have a track record with.

[maxwellgarner]

Thank you, once again great advise!