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August 13th, 2010, 04:45 PM #1Ideal Commission Structure - Rev Share, CPL, Hybrid?
Which structure do you think would attract the most partners?
Background: We're B2B and we qualify raw leads. The qualification (which would be the "sale") usually happens the same day as the conversion and can take 3 days max. Average revenue per qualified lead is $400. Average qualification (ie. sale) rate ranges from 10-30%.
For 100 leads, average of 20 would qualify, for average revenue of $8000.
- 25% revenue share ($2000 on average)
- $10 CPL ($1000 guaranteed)
- $5 CPL + 10% revenue share ($500 guaranteed + $1000 average)
Right now all of our partners are at the 25% level, but I've heard some feedback that bigger networks might prefer CPL or a hybrid. I look forward to your feedback!
August 13th, 2010, 04:52 PM #2
The best model is the one that aligns the affiliate's interest (commissions) with your own. Leads can be very problematic when it comes to fraud. If you pay a $10 CPL, you're going to find that you get hundereds or perhaps even thousands of affiliates who generate a lot of leads, but whose leads don't convert into sales.
I would highly suggest a pure revenue share, if it's possible. That most closely aligns interests.
August 13th, 2010, 06:30 PM #3
Thanks, Michael. I would prefer the straight revenue share (and that's what we do now), I'm just thinking of ways to possibly attract larger partners. Great point though, I definitely don't want tons of bad leads!
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