View Poll Results: What would you rather want [commission amounts are made up]?

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  • A program that pays 25% on all referred sales

    21 91.30%
  • One that pays close to 33% but on new customers only

    1 4.35%
  • I have a better idea! [elaborate in a post]

    1 4.35%
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Thread: New Customers at +30% Commission or ... ?

  1. #1
    AM Navigator Geno Prussakov's Avatar
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    Question New Customers at +30% Commission or ... ?
    Dear ABW-ers,

    I have a client who is considering increasing their default commission by over 30%, but at the same time limiting valid (read: commissionable) sales to sales that come from new customers only. Meaning, if a sale comes from a customer already registered in their database, they will void it (unless there is a clear proof that the affiliate added value to the new sale... which, for example, may be demonstrated by showing a referral URL from a content site that adds value, or a PPC campaign that bids on a competitive term).

    How do you feel about such a shift?

    Many thanks in advance for your feedback.

    Geno

  2. #2
    Affiliate Manager Howard Gottlieb's Avatar
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    We are looking for repeat customers (hopefully) not building someone else's customer base. To us the 8 points is not enough of a difference.
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  3. #3
    ABW Ambassador kaizen's Avatar
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    I wonder how long before the merchant is tempted to start skimming a bit by voiding valid sales, or if they are honest, how long before they are suspected/accused of doing so anyway?

    The clear proof qualifier opens up a can of worms as well. There are a lot of crappy sites out there where the webmaster believes that value is being added, and a lot of marginal sites where it could be argued either way.
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  4. #4
    AM Navigator Geno Prussakov's Avatar
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    Quote Originally Posted by visitourmall
    We are looking for repeat customers (hopefully) not building someone else's customer base. To us the 8 points is not enough of a difference.
    Good point, H., and looking forward to more feedback and votes.

    Geno

  5. #5
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
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    No way. Commissions should be paid (even at the lower rate) on all legitimate sales.

    Quote Originally Posted by Geno Prussakov
    ...unless there is a clear proof that the affiliate added value to the new sale... which, for example, may be demonstrated by showing a referral URL from a content site that adds value, or a PPC campaign that bids on a competitive term...
    This would be difficult, burdensome, and too time-consuming to have to prove each time. Plus, affiliates may have to disclose proprietary secrets regarding their sites and methods.

    Also, this type of system would let unscrupulous merchants (not those you're promoting) pad the books and say most sales are from returning customers - just enough commissions paid to keep the affiliate active.
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  6. #6
    AM Navigator Geno Prussakov's Avatar
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    All fine points, and I appreciate your feedback. Looking forward to more.

    Thanks a million, everyone.

    Geno

  7. #7
    Moderator MichaelColey's Avatar
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    Those programs that only pay for new customers typically pay FAR MORE for those new customers (i.e. think LIFETIME VALUE). For instance, eBay pays $25+ for new customers (on top of a generous revenue share).

    I would strongly encourage a NEW CUSTOMER BOUNTY on top of affiliate commissions, if new customers are important to the merchant.
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  8. #8
    Visual Artist & ABW Ambassador lostdeviant's Avatar
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    Commissions should be paid on all sales during the cookie period.

  9. #9
    Troll Killer and best Snooper!
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    Geno, is your client willing to pay 30% on new customers who order by telephone or just online? Is tracking in place to handle that?

  10. #10
    Life is Supposed to be Fun! Rexanne's Avatar
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    what everyone else already said. :-)

    I voted for 25% across all sales - without question - anything else is asking for trouble and abuse of trust.
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  11. #11
    What's the word? Rhia7's Avatar
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    Pay 25% on all referred sales with an additional bonus for the referral of new customers
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  12. #12
    Beachy Bill's Avatar
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    I responded to the poll and second Rhia7's suggestion of an additional bonus (acquisition fee?) for "new" customers.

    So, that's just my 2-cents, er...ah... make that 25-cents (on the dollar).
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  13. #13
    Comfortably Numb John Powell's Avatar
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    Commissions will be paid for new customers only.
    Excerpt from the TOS of an ink merchant that is familiar here. I didn't like it then and still don't. I'll take the lower commission and hope for the repeats.


  14. #14
    AM Navigator Geno Prussakov's Avatar
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    Quote Originally Posted by Rhea
    Geno, is your client willing to pay 30% on new customers who order by telephone or just online? Is tracking in place to handle that?
    All regular tracking is in place (both phone and online), but not the tracking that can automatically distintinguish the new customers from the repeat ones. They would want to do it by hand.

  15. #15
    AM Navigator Geno Prussakov's Avatar
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    Quote Originally Posted by bumpaw
    Excerpt from the TOS of an ink merchant that is familiar here. I didn't like it then and still don't. I'll take the lower commission and hope for the repeats.
    I know exactly what merchant you're talking about; and just for the sake of clarity -- I am not talking involvement with that company.

  16. #16
    ABW Ambassador simcat's Avatar
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    ..unless there is a clear proof that the affiliate added value to the new sale...
    What does that mean exactly. Can someone give an example of an affiliate that does'nt add value to a sale? Besides spyware, toolbars etc.?

    If I add an aff. link to a page that already gets tons of traffic, do I add value? Lets say I am the most innovative affiliate ever, find all kinds of unique uses for a product...and then lots of other affs. copy me, do I still add value?

  17. #17
    AM Navigator Geno Prussakov's Avatar
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    Quote Originally Posted by simcat
    What does that mean exactly. Can someone give an example of an affiliate that doesn't add value to a sale? Besides spyware, toolbars etc.?

    If I add an aff. link to a page that already gets tons of traffic, do I add value? Lets say I am the most innovative affiliate ever, find all kinds of unique uses for a product...and then lots of other affs. copy me, do I still add value?
    That's where I personally see the main challenge of such a system. One way or another the question of subjectivity will get raised by affiliates -- those partners of yours that are key to the whole relationship -- and this, in its turn, will translate each affiliate sale voided into one more affiliate loosing trust in the merchant.

    The additional bounty (paid on top of the regular commission) for each new customer sent in sounds like a healthy alternative that should make both parties of the relationship happy (both the affiliate, and the merchant).

    Geno

  18. #18
    Moderator MichaelColey's Avatar
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    I think the results of this poll make it clear. Paying on just new customers (especially if it's only marginally more than what you would pay for all customers) is perceived negatively by affiliates. A new customer bounty (in addition to commission), on the other hand, is perceived positively and helps to better align goals.
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  19. #19
    ABW Founder Haiko de Poel, Jr.'s Avatar
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    I've got a "better" idea ... cut the commissions and set up lifetime accounts, then the affs who actually bring the good customers will be rewarded.
    Continued Success,

    Haiko
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  20. #20
    AM Navigator Geno Prussakov's Avatar
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    Quote Originally Posted by Haiko de Poel, Jr.
    I've got a "better" idea ... cut the commissions and set up lifetime accounts, then the affs who actually bring the good customers will be rewarded.
    That's an interesting option, H. Does anyone you know actually do this? It'd be a competitor-killing type of affiliate marketing.

    Geno

  21. #21
    Beachy Bill's Avatar
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    Quote Originally Posted by Geno Prussakov
    ...It'd be a competitor-killing type of affiliate marketing...
    Yes it would. At least that's the feeling I get with my travel sites. I count on a lot of repeat customers. I know I have some that reserve their room(s) through my site every year for a beach vacation, and a couple for every business trip.

    I have no idea how tracking could be implemented through the network(s), but it would give some merchants a competitive edge in attracting affiliates.
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  22. #22
    The Seal of Aproval rematt's Avatar
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    I agree with the consensus that a slightly higher commission for a new customer with zero commission for repeat customers wouldn't get my attention. So I voted for "A program that pays 25% on all referred sales". However something has been bugging me about this scenario all day.

    First, why would a merchant presume that any customer we send to them has more or less value? The value we add is getting a pre-qualified prospect to their cart. If we do that, our job is done. Pay us.

    Second, it appears that the merchant is confused about what value is. If a previous customer of theirs deems it necessary to visit my site before making a new purchase from them, it would appear that I added more value to the transaction than they did. If the customer was totally enthralled with them, why did they end up on my site AGAIN?

    Third, how could I possibly trust a merchant that would make arbitrary decisions regarding my commissions? How would they possibly quantify value? Apply a point system? Would this be something I could measure to keep them honest?

    I hope this poll convinces your client that what they are thinking of would not be a good strategy. If what they are really trying to do is to gain more new customers than a "New Customer Bonus" would be the best tactic as mentioned by others. If they are just looking for a way to pay less in commissions than they need to rethink the structure of their affiliate program.

    -rematt
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