# Which Type of Tiered Bonus Offer?

1. What Do You as Affiliate Want? Payout system you preffer?
Hi there.

We are setting up an affiliate program that pays \$50/sale.
Now ... as an incentive we want to pay more to those affiliates that perform better. What would interest you more???

1. 50/sale and if you go over 20 sales a month we pay \$60 per sale and if over 50 sales per month we pay \$70/sale. So pretty much, increase payout per sale

OR

2. We pay same amount per sale, BUT if you sell more than 20 units a month we give a bonus of \$300 and if you sell over 50 units we give a bonus of \$500.

I mean the question here is what would motivate you more?

I appreciate your feedback. Thank you.

2. Second option (if the first is tied to sales within just one month; i.e. if the count starts over on the 1st of every month).

Geno

3. EDITED FOR CALCULATIONS!

Doing the math:
UNDER PLAN A (TIERED)
If a person sells 40 units they get \$2200
If a person sells 70 units they get \$4200

UNDER PLAN B (BONUS)
If a person sells 40 units they get \$2300
If a person sells 70 units they get \$3800

The inequalities to solve here are
50x + 10(x-20) > 50x + 300 if 20<x<50
Solution is x>50 (at cutoff point)

50x + 10(x-20) + 10(x-50) > 50x + 300 if x>50
Solution is x>50 So if more than 50 units are sold the inequality is true and the tiered structure is better.

So it depends on how likely one is to sell over 50 units a month. If not likely, then PLAN B (Bonus) would be better for the affiliate. If they sell over 50 units (can sell close to 2 units a day), then the tiered structure (PLAN A) is much better.

4. Payout system you preffer?
Hi there.

We are setting up an affiliate program that pays \$50/sale.
Now ... as an incentive we want to pay more to those affiliates that perform better. What would interest you more???

1. 50/sale and if you go over 20 sales a month we pay \$60 per sale and if over 50 sales per month we pay \$70/sale. So pretty much, increase payout per sale

OR

2. We pay same amount per sale, BUT if you sell more than 20 units a month we give a bonus of \$300 and if you sell over 50 units we give a bonus of \$500.

I mean the question here is what would motivate you more?

I appreciate your feedback. Thank you.

5. Honestly, when I have opportunities like the ones where you get a bonus at a certain level, I push really hard until I hit that level and then pull back my promotions. If I know that I am going to have an increased amount on every sale and am having a good month, I keep pushing harder and harder through the last day of the month. So while either is an incentive that I would work toward, I would probably actually end up making more sales with option 1.

6. Igor,

Why post one and the same thing in two places (with a difference of a bit over an hour) when you're already getting feedback at http://forum.abestweb.com/showthread.php?t=74633 ?

Geno

7. [I've merged your two threads, moved them, and changed the title.]

If I had to choose, I would usually choose the first for the exact same reason helpingmoms mentioned. Both motivate you to reach the tier, but only the first motivates affiliates to exceed the tier.

Many affiliates despise tiers, especially if there's a big difference between the lower and higher tiers. For instance, many computer and office supply companies have tiers that start at 1% and go up sometimes as high as 5% for high volumes. Small affiliates are "demotivated" when larger affiliates get paid 5X as high of rates.