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  1. #1
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    Performance Incentive Best Practice
    Over the years, I have seen merchants offer incentive bonus for their affiliate programs. Incentives often help boost sales for merchants and stimulate affiliates to promote their products aggresively, if practice the right way.

    For merchants who are planning to offer performace incentives in the future, here are my suggestions:

    1. Be relalistic. Something like "$5 bonus for sales over $10000" just won't work.

    2. Don't do "Top X" competition. First off, I have no way to know how close I'm in the competition, plus often time, the winners are usually those questionable players we know who. The best practice is to set a goal. Such as, $ bonus for sales x-y. $$ bonus for sales y-z, $$$ bonus for sales over z...

    3. Follow up your promise. I have been very happy with some merchants who pay out bonus on time. Sometimes I have to spent extra time to track down the affiliate manager to claim the bonus. I still have one outstanding bonus which was claimed a few months back...

  2. #2
    OPM and Moderator Chuck Hamrick's Avatar
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    Do you only prefer a cash bonus. How about a commission increase if you hit a higher sales level? If you did $1000 last year for a merchant at 10% how about 12% if you do $3000 for the month this year? Then you stay at the higher commission and for the period of the test you receive a bonus for the difference if you hit the high sales?

  3. #3
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    Quote Originally Posted by Chuck Hamrick View Post
    Do you only prefer a cash bonus. How about a commission increase if you hit a higher sales level? If you did $1000 last year for a merchant at 10% how about 12% if you do $3000 for the month this year? Then you stay at the higher commission and for the period of the test you receive a bonus for the difference if you hit the high sales?
    Yes, % commission increase is another good form of performance incentive. Some of my CJ merchants has the tiered commission automatically set to sent out bonus every month, which work very well.

  4. #4
    OPM and Moderator Chuck Hamrick's Avatar
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    CJ uses the term Performance Incentive which is good seasonally for all affiliates in a program. For a producer who makes high line sales it is actually a disincentive because they have to wait another pay cycle to get the increased commission. In that case I move them to the higher commission completely. It pays them a higher commission even in off season as an added bonus for the increase in season.

  5. #5
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    That's even better to get a permanent commission increase. Not many merchants offer that(maybe I should ask for it).

    I guess what I don't like is the top x contest, drawings, free pair of shoes...types of incentives .

  6. #6
    OPM and Moderator Chuck Hamrick's Avatar
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    This is a very insightful discussion! Always thought affiliates enjoyed getting actual products from the merchant. I guess if don't really need it then its not much of a motivation. What if instead the bonus offer was the product or equivalent in cash?

  7. #7
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
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    Higher commission levels are significantly more attractive than a small extra payment or product that you may not need, want, or could ever use. Several hours of work adding or replacing products and/or links for a $5 bonus usually is not worth the trouble, as is offering a pc product to a Mac user.
    Quote Originally Posted by Chuck Hamrick View Post
    What if instead the bonus offer was the product or equivalent in cash?
    Every affiliate will have their own threshold. For some it might be that $5, for others $500 may not be enough incentive to take on a time-consuming task.

    As to tiered commissions, why can't more networks/merchants do it like Amazon? As soon as you hit a new tier all commissions for the month are automatically re-computed to the higher rate and are queued to be paid at the higher rate. You can then look at any given transaction and see what you have earned, and there is no additional two or three month or longer lag in receiving earned payments.
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