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  1. #1
    Affiliate Manager
    Join Date
    January 13th, 2011
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    Cambridge, MA
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    Subscription Products
    I need some input on the best way to payout affiliates for our subscription product. I just got told our cart won't support a recurring pay out for affiliates on ShareASale so I need a new idea.

    Here is one thing I thought of, I can manually track all orders that come in from affiliates. I am thinking an affiliate gets 50% of the sales over a 6 month period, paid out in this way:

    For initial sale the affiliate gets the whole sale, we have a tiered subscription plan where an affiliate would make either $10, $20, or $40 based on the product level. After 6 months the affiliate will get a payout of 2 months, so in the tiered order they would be paid another $20, $40, or $80. Does this sound like a good payout?

    I know you may ask, if I can manually track the 6 month period why not just track monthly payouts, my main issue with this is it will become a nightmare to track all affiliate sales each month and then go through my commerce assistant and check all orders.

    How would you do it?

  2. #2
    ABW Ambassador Greg Rice's Avatar
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    January 18th, 2005
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    Ohio
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    4,889
    There's a couple options for this. The easy one is to calculate the average lifetime value of that customer and pay based on that. For example, if the average customer remains a subscriber for 3 months, you know what the "average" sale amount is. You figure what you can pay as a commission and you can pay based on that. With this, though, you need to keep careful track of who is bringing in sales and the quality of those sales. If an affiliate's average customers are only staying for 1 month, and you're paying out based on 3 months, you have a problem. With this plan you may want to stay away from incentive sites.

    Another method is to setup a procedure to calculate the recurring sales. With SAS, they can pass the affiliate ID to you which you can capture and associate or link to that customer. Then run your reports based on if that customer paid that month and the affiliate ID linked to it. Talk with SAS about options for manually adding these sales but you could just make lump sum payments via SAS to each affiliate (not the best method but ok when you're starting out). With a decent programmer, you can fully automate this.
    Greg Rice Affiliate Program Management
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  4. #3
    Affiliate Manager
    Join Date
    January 13th, 2011
    Location
    Cambridge, MA
    Posts
    6
    Thanks for the input Greg!

    Since we just launched our SaaS model product, we don't have the data for the average worth of a customer. That is why we initially wanted to do a monthly payout. I think since our program is still small, manually attributing a sale to each affiliate each month won't be too difficult. My one worry about the current model we have, is the initial payout is nothing to write home about. For instance if an affiliate sells our Silver plan they get $2 each month for that sale. That seems a tad low, though I think there is a benefit to the residual income, they would have to recruit a whole lot of sales to start seeing some decent income.

    Over time we will get a feel for the average customer, and we will more than likely implement that payout. Really with the plan I proposed I am trying to make an attractive plan any payout of $10, $20, or $40 with the potential to make an additional $20, $40, or $80 if the customer stays on.

    In the current model I sketched out, do you think waiting 6 months is too long, obviously we want to wait that long to protect ourselves, but I don't know if that alone will deter affiliates.

  5. #4
    ABW Ambassador 2busy's Avatar
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    January 17th, 2005
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    You should already have sales statistics when you open an affiliate program. You should not experiment with affiliates to see how your product does. You are expecting affiliates to commit their time and money to find out if you have a viable product. Affiliates can help you increase your sales, but the startup stage is not a very good place to involve affiliate marketing. The network terms are what you need to look at because you can't withhold commissions earned for 6 months to see if the purchaser backs out. I would suggest that you look for a consultation from an experienced OPM to try to do things right. They would need to discuss figures that cannot be done properly here in the forum. There are many OPMs to choose from in this forum.
    Good luck.

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