Results 1 to 20 of 20
  1. #1
    Newbie
    Join Date
    July 6th, 2009
    Posts
    6
    Would this be an option 4 commission model?
    I am wondering if the following would be an interesting twist to the commission model we are currently using. We are an online retailer and I am currently thinking about ways to incentive / motivate affiliates. Therefore I came up with the following and I am interested to hear your opinion.

    Ok, so first each partner has to subscribe and indentify his field of work, so is it a loyalty website, content affiliate, blog, etc, etc? We have an reasonable extensive list so each partner should be able to choose a group.

    Secondly we start with a cookie term standard of say 10 days and of course we have a normal staffel concept, so for example:
    0 - 150 sales 5%
    151 - 250 sales 10%
    etc, etc.

    To make it more interesting for affiliates and in the same time stimulate partners who have more incremental value for our company I thought of a quality index. The quality index can increase the cookie time, too for example 15 days of 20 days.

    The quality index is based on:
    1. RPC (Revenue per click)
    2. Conversion
    3. etc.
    4. etc

    Each metric gets an factor which indicates the importance, so for example, RPC gets a 5 and customers in bronze segments gets a 1.

    We multiple the result of the metric with their specific factor. So for example a partner has a 10% higher RPC than other partners in his group (e.g. loyalty website or price comparison) so his score is 0,5 for RPC. We do this with all the metrics.

    Then we make a model which states if you quality score is between 1 - 5 no higher cookie time, is your quality score between 5 - 10 you will receive 15 days cookies, etc.

    Most important is that you give partners full transparancy in the way you have calculated the quality score and how they score on each seperate metric. This information gives them also more insight how they are doing and on which metric they can improve to receive a higher cookie time.

    My question to you?
    1. Do you think this would motivate affiliates?
    2. Which metrics do you think show the incremental value as a partner to an online retailer?

  2. #2
    ABW Ambassador
    Join Date
    January 18th, 2005
    Location
    West Coast USA
    Posts
    3,043
    IMO
    1) NO
    2) Sales

  3. #3
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
    Join Date
    January 22nd, 2007
    Location
    West Covina, CA
    Posts
    8,443
    Affiliates would run away as fast as possible.

    {Your problems begin with your threshold "given": "so first each partner has to subscribe and indentify his field of work, so is it a loyalty website, content affiliate, blog, etc, etc?" because most affiliates have many different "field[s] of work", and take off from there, into an abyss into which no affiliate marketer will follow}
    Since June 10, 2012 a vegan aarf but still writing the Hound Dawg Sports Blog
    "If you don't have time to do it right, when will you have time to do it over?" -John Wooden;
    "Raj, there’s no place for truth on the internet." -Howard Wolowitz[/SIZE]

  4. #4
    .
    Join Date
    January 18th, 2005
    Posts
    2,973
    Your proposal is a waste of time; I already regret spending 15 seconds reading it.

  5. #5
    The Seal of Aproval rematt's Avatar
    Join Date
    November 19th, 2006
    Location
    The Windy City
    Posts
    4,140
    More complicated is never better.

    -rematt
    "I know that you believe you understand what you think I said, but I'm not sure you realize that what you heard is not what I meant." - Richard Nixon

  6. #6
    Member
    Join Date
    April 15th, 2009
    Posts
    192
    analysis leads to paralysis...keep it simple.

  7. #7
    Moderator MichaelColey's Avatar
    Join Date
    January 18th, 2005
    Location
    Mansfield, TX
    Posts
    16,232
    K.I.S.S. (And I'm not talking about affection or a band.)
    Michael Coley
    Amazing-Bargains.com
     Affiliate Tips | Merchant Best Practices | Affiliate Friendly? | Couponing | CPA Networks? | ABW Tips | Activating Affiliates
    "Education is the most powerful weapon which you can use to change the world." Nelson Mandela

  8. #8
    Manager - Affiliate Marketing Patrick Vesperman's Avatar
    Join Date
    June 10th, 2009
    Location
    Minneapolis, MN
    Posts
    622
    one word: confusing

  9. #9
    Affiliate Manager Matt McWilliams's Avatar
    Join Date
    July 21st, 2006
    Location
    Fort Wayne, IN
    Posts
    2,838
    A quality index (in a less complicated model) is worth it in lead generation.

    But as you say:

    We are an online retailer
    So it is irrelevant. Unless you are particularly worried about someone sending 10,000 hits a day with no sales (i.e. adware ads which you should ban anyway) then what would be the point anyway?

    As everyone else has said, it is WAY to complicated.

    Also, a 10-day cookie is too short. Make it AT LEAST 180 days...bare minimum.

    And to answer Question #2, the answer is sales as Adam Ward says.
    Matt McWilliams
    Call Me At: (317) 825-8826 | Follow Me On Twitter: @MattMcWilliams2 | Connect With Me On LinkedIn

  10. #10
    Newbie
    Join Date
    July 6th, 2009
    Posts
    6
    Hhmm not very positive reactions. Some of them a clear and interesting. Some of them show maybe some outdated opinions:

    because most affiliates have many different "field[s] of work
    Sure, therefore a partner can identify each website separately. You don't qualify a partner on partner level but on site-level.

    A quality index (in a less complicated model) is worth it in lead generation.
    Don't agree that a quality index only counts for leads. As far as the eye can see you only have models which offers high revenue generating affiliates pay more money. Some additionally pay for new customers, etc. I believe this concept not fully optimzes the opportunities of all affiliates in each network.

    Also, a 10-day cookie is too short. Make it AT LEAST 180 days...bare minimum.
    Come on, be serious? Why don't pay 90% of my margin, lets also not de-duplicate orders.... Sorry but apparantly your company does not calculate through the cost per order.

    But the message is clear, keep it simple....I will definitely look how I can keep the model more simpel....

  11. #11
    Full Member snappy's Avatar
    Join Date
    February 21st, 2009
    Location
    Palm Bay Florida/Portland, Oregon
    Posts
    387
    Quote Originally Posted by Kucharczyk
    Hhmm not very positive reactions. Some of them a clear and interesting. Some of them show maybe some outdated opinions:



    Sure, therefore a partner can identify each website separately. You don't qualify a partner on partner level but on site-level.



    Don't agree that a quality index only counts for leads. As far as the eye can see you only have models which offers high revenue generating affiliates pay more money. Some additionally pay for new customers, etc. I believe this concept not fully optimzes the opportunities of all affiliates in each network.



    Come on, be serious? Why don't pay 90% of my margin, lets also not de-duplicate orders.... Sorry but apparantly your company does not calculate through the cost per order.

    But the message is clear, keep it simple....I will definitely look how I can keep the model more simpel....
    HI I am a affiliate who would not join your program. Here is why. Cookie length way too short my min is a 30 day cookie the longer though the better we all know customers will not buy the first time to a store....2nd I will not advertise anyones products for less than 15% commission my space is more valuable
    And it is funny how you call other merchants here outdated lol, what works is all that matters right or did you just come here to get people to agree with you to make you feel better because you question it your self.
    I attract success and abundance into my life because that is who I am.

  12. #12
    The Seal of Aproval rematt's Avatar
    Join Date
    November 19th, 2006
    Location
    The Windy City
    Posts
    4,140
    Quote Originally Posted by MattMcWilliams
    Also, a 10-day cookie is too short. Make it AT LEAST 180 days...bare minimum.
    Quote Originally Posted by Kucharczyk
    Come on, be serious? Why don't pay 90% of my margin, lets also not de-duplicate orders.... Sorry but apparantly your company does not calculate through the cost per order.
    Your response on the cookie issue could possibly be a red flag for many affiliates. A response of 30 days or 60 days would have been acceptable but a merchant or network that insists on a 10 day cookie is looking for a reason not to pay affiliates for legitimate traffic.

    Orders generated from a 30, 60,90 or 180 day cookie cost you no more than an order generated from a 10 day cookie. So why wouldn't you pay the source of the traffic for that order? I understand your need to make a profit, however if you are counting on free affiliate traffic to be profitable you will fail. We're probably not as stupid as you think.

    Affiliates want to work with merchants and networks that treat us fairly. Not those that look for ways to not pay a commission. Remember, we have choices and many will look at your 10 day cookie, surmise that you are affiliate un-friendly and move on to your nearest competitor.

    -rematt
    "I know that you believe you understand what you think I said, but I'm not sure you realize that what you heard is not what I meant." - Richard Nixon

  13. #13
    Newbie
    Join Date
    July 6th, 2009
    Posts
    6
    I am all for treating affiliates fairly, that's one of the reasons why I am looking to set-up an interesting bonus model where I pro-long the cookie time for better perfoming affiliates and therefore increase their revenue.

    The discussion of the length of cookie is for me not so relevant here. I am more interested to hear your opinion if there is a model out there which can give an extra bonus to good performing affiliates, regardless if they are making the most money.

    We all know that each network has the problem that only 5% of the affiliates generate 90% of the revenue. Sticking with old models (longer cookie time, higher commission) is apparentlly not the answer to fully optimize the full potential of ALL affiliates..... I believe the current situation is a consequence of these old models.

  14. #14
    Newbie
    Join Date
    July 6th, 2009
    Posts
    6
    One add to my last message to show I am all for treating affiliates fairly. One of the metrics I now included in the model is the amount of sales where the affiliate is not the last channel. So I am trying to find a way to reward affiliates for sales they initially did not receive commission on.....

  15. #15
    The Seal of Aproval rematt's Avatar
    Join Date
    November 19th, 2006
    Location
    The Windy City
    Posts
    4,140
    Quote Originally Posted by Kucharczyk
    I am all for treating affiliates fairly, that's one of the reasons why I am looking to set-up an interesting bonus model where I pro-long the cookie time for better perfoming affiliates and therefore increase their revenue.
    Pay affiliates a competitive commission with a reasonable cookie duration and there's no need for "interesting bonus models". The more complicated you make it, the more affiliates won't want to work with you. You see it as a way to pay more, we see it as a way to avoid paying more. Don't make me jump through hoops to be treated fairly.

    Quote Originally Posted by Kucharczyk
    The discussion of the length of cookie is for me not so relevant here. I am more interested to hear your opinion if there is a model out there which can give an extra bonus to good performing affiliates, regardless if they are making the most money.

    We all know that each network has the problem that only 5% of the affiliates generate 90% of the revenue. Sticking with old models (longer cookie time, higher commission) is apparentlly not the answer to fully optimize the full potential of ALL affiliates..... I believe the current situation is a consequence of these old models.
    This is why you need to spend more time reading here on ABW and take the time to understand what is important to us. You asked us what we wanted, we told you and you chose to brush it off as "irrelevant".

    A comment that I made to a user a couple of weeks ago was "first learn the rules, then break them. Not the other way around". You need to understand what motivates affiliates and what works today before you set about changing the world.

    That being said, I for one love change, but it doesn't sound to me that you have the knowledge or experience to make a positive impact through change. Please don't take that the wrong way, it's not intended as a personal attack, but based on your questions and your reactions to our responses, it appears that you just don't get it.

    I applaud your attempt to find a better model. Now spend some time to fully understand the current one. Keep reading, keep asking questions and give some real thought to the responses that you get. Don't discount our answers just because it wasn't what you wanted to hear. And don't minimize our concerns, remember we're the ones that can make your program a success.

    -rematt
    "I know that you believe you understand what you think I said, but I'm not sure you realize that what you heard is not what I meant." - Richard Nixon

  16. #16
    OPM and Moderator Chuck Hamrick's Avatar
    Join Date
    April 5th, 2005
    Location
    Park City Utah
    Posts
    16,646
    Ebay has a terrific white paper on rewarding higher value affiliates for the value of sales: http://www.ebaypartnernetworkblog.co...us-on-quality/

    Agree on the cookie length and have managed a program with a 10 day cookie. Offered a 60 day cookie for affiliates who got active in the program.

    Affiliate management is about developing a relationship and that doesn't start with suspicion. Without knowing your brand, product, commissions, incentives, etc. we have no way of evaluating your program. Have you done a competitive analysis versus other competing affiliate programs?

  17. #17
    Newbie
    Join Date
    July 6th, 2009
    Posts
    6
    Well Rematt, I do agree I am a stubborn man and maybe I don't understand the business yet (no insult taken ;-) ) But maybe you, as an affiliate, should not always see each initiative of a merchants as an act of not wanting to pay more...Not all merchants are monsters ;-)

    I agree totally that there needs to be a comptetive commission and a reasonable cookie time. But my question is that if we have this competitive model and reasonable cookie time.

    How can we as an affiliate manager steer more on quality of an affiliate and how do we define this quality?

    For example the percentage of new customers can mean one affiliate has a higher "quality". So why don't reward him. An affiliate which has a concept where his average revenue per click is higher than the average in his sector/line of websites. This means the potential is there, and although he is maybe not yet your highest revenue generating affiliate, why don't reward this affiliate with some sort of bonus?

    So, Rematt, being all for change, please give me insight how you think a merchant can determine the quality of an affiliate, besides the revenue stream, and how can he reward these affiliate accordenly?

    For your information, without revealing our identity, we are market leader in our field and we have a competitive commission structure. Yes it is not the highest, but as a market leader I believe we don't need to be because we offer so much more compared to our competitors to customers and therefore conversion, AOV, etc are higher. So again, I am just searching for an extra incentive for affiliates....

    @Chuck: I defintely going to read the white paper of eBay.

  18. #18
    OPM and Moderator Chuck Hamrick's Avatar
    Join Date
    April 5th, 2005
    Location
    Park City Utah
    Posts
    16,646
    Kucharczyk, if you have existing affiliate relationships then you should be able to suggest a performance based model and get the affiliates feedback. If you are intending this for recruitment you need to put it in affiliate language. Otherwise, they will just pass over it as they are inundated with emails and newsletters. Also consider speaking with the network to see if they can offer suggestions.

  19. #19
    The Seal of Aproval rematt's Avatar
    Join Date
    November 19th, 2006
    Location
    The Windy City
    Posts
    4,140
    Quote Originally Posted by Kucharczyk
    Well Rematt, I do agree I am a stubborn man and maybe I don't understand the business yet (no insult taken ;-) ) But maybe you, as an affiliate, should not always see each initiative of a merchants as an act of not wanting to pay more...Not all merchants are monsters ;-)
    On the contrary, I feel that most merchants have good intentions and are honest business people. Unfortunately there is a small percentage that don't fit that description just like any other industry. As you read around ABW you'll find thread after thread about merchants that have stolen content from affiliates, changed their program terms without notification, decided not to pay affiliates because they suspected that they were doing something wrong (often without any proof and sometimes without any restriction in their program on the "suspected" behavior) or simply don't track sales consistently. This obviously doesn't tell the whole story, unfortunately we are greatly remiss in handing out kudos to merchants that get it and excel at running their programs.

    That being said, I'm all for being creative and applaud you for looking for ways to outshine your competition and reward affiliates for their hard work. But you have to understand that from the affiliates standpoint there is already too much emphasis on trust in this industry. The more convoluted a pay plan, the less we trust that it will be administered fairly or consistently.

    Quote Originally Posted by Kucharczyk
    I agree totally that there needs to be a comptetive commission and a reasonable cookie time. But my question is that if we have this competitive model and reasonable cookie time.

    How can we as an affiliate manager steer more on quality of an affiliate and how do we define this quality?

    For example the percentage of new customers can mean one affiliate has a higher "quality". So why don't reward him. An affiliate which has a concept where his average revenue per click is higher than the average in his sector/line of websites. This means the potential is there, and although he is maybe not yet your highest revenue generating affiliate, why don't reward this affiliate with some sort of bonus?
    Hell, give bonuses for whatever criteria you feel are important to your program. What I'm saying is, your program terms should be competitive from the start, bonuses should take you over and above your competition, not put you on par with them. Why would I send you my traffic for less earning potential in the "hopes" of meeting your bonus criteria? And if your criteria is subjective I have no reason to ever expect a bonus except trust. And as nice a person as I'm sure you are, today I have absolutely no reason to trust you.

    Quote Originally Posted by Kucharczyk
    So, Rematt, being all for change, please give me insight how you think a merchant can determine the quality of an affiliate, besides the revenue stream, and how can he reward these affiliate accordenly?
    "What is quality?". One of my favorite books "Zen and the Art of Motorcycle Maintenance" attempts to deal with this issue. They never quite define it either. But I know what you're getting at, and yes, I love incentive bonuses. But as I've stated previously, if your criteria are subjective, I probably won't take a second look. You need to decide which criteria are important to your program and build your bonus structure around them. If it's new customer acquisition, great, pay a bounty for each new customer an affiliate brings in. Besides new customer acquisition or AOV, I'm not sure how you would rate the quality of the traffic that an affiliate sends without factoring in conversions. If you can devise a means and keep it simple, then that may well be what sets your program apart.

    Quote Originally Posted by Kucharczyk
    For your information, without revealing our identity, we are market leader in our field and we have a competitive commission structure. Yes it is not the highest, but as a market leader I believe we don't need to be because we offer so much more compared to our competitors to customers and therefore conversion, AOV, etc are higher. So again, I am just searching for an extra incentive for affiliates....
    Hate to sound like a mercenary, but the bottom line is; will I earn more with your program then with your competitors and can I reasonably expect to be paid what I earn?

    -rematt
    "I know that you believe you understand what you think I said, but I'm not sure you realize that what you heard is not what I meant." - Richard Nixon

  20. #20
    http and a telephoto
    Join Date
    January 18th, 2005
    Location
    NYC
    Posts
    17,708
    Before you can start judging affiliate quality and rewarding affiliates, you need to recruit those affiliates. The way to recruit them is to have competitive commissions and cookie duration, show them you convert, and that your site is worthy of their consideration (no leaks, clear images, easy checkout process). You won't get them to join if you don't pass the screening process.

    Rewards and bonuses are great. I am unclear at what you are attempting to reward though.

    And calling the folks here outdated isn't going to help you in your quest to recruit the best affiliates.
    Deborah Carney
    TeamLoxly.com BookGoodies.com ABCsPlus.com

  21. Newsletter Signup

+ Reply to Thread

Similar Threads

  1. Promotional: New Commission model for Swiss Airlines
    By JCrooks - AffiliateWindow in forum Affiliate Window Program Announcements
    Replies: 0
    Last Post: October 6th, 2014, 09:40 AM
  2. Replies: 3
    Last Post: June 8th, 2011, 01:30 PM
  3. What's a good option for my $500 flat commission affiliate program?
    By untimeshare in forum Starting an Affiliate Program & Merchant Q&A
    Replies: 8
    Last Post: June 23rd, 2010, 09:17 AM
  4. Do Linkshare offer Paypal commission payout option ?
    By Vrindavan in forum Rakuten LinkShare - LS
    Replies: 1
    Last Post: December 12th, 2008, 07:41 AM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •