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  1. #1
    Affiliate Manager
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    Spiff Vs Sliding Commission Scale
    Hello fellow AMs!

    If there is already a good thread on this topic, please let me know. Furthermore, I apologize if there is already a thread. I couldn't find it searching..

    I'm debating doing either a sliding commission scale, or a spiff that pays out at certain order thresholds; say $25 for every five orders or whatever.

    Basically, I'm inviting anyone with an opinion on the matter to let me know what they think. I got to get our partners that don't perform that well to step it up a little.

    Thanks in advance,

    Justin

  2. #2
    Moderator MichaelColey's Avatar
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    Just pay a competitive commission. Sliding commissions can be demotivational to many affiliates. If I look at a program and see that they pay a base 1% commission, 2% on sales of $50k-$100k, 3% on sales of $100k-$200k, 4% on sales of $200k-$500k, and 5% on sales over $500k, I'm going to feel like I'm getting shorted on my commissions (unless I can generate over $500k/month in sales). If a sale is worth 5%, pay 5% to everyone.

    I don't mind if a merchant holds back a little for the top performers (for instance 12% if their base is 10%), but I feel like a large disparity from the base to the top tier negatively impacts a program.
    Michael Coley
    Amazing-Bargains.com
     Affiliate Tips | Merchant Best Practices | Affiliate Friendly? | Couponing | CPA Networks? | ABW Tips | Activating Affiliates
    "Education is the most powerful weapon which you can use to change the world." Nelson Mandela

  3. #3
    Affiliate Manager
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    Michael,

    Thanks for the reply. Right now we are offering a competitive commission. It is higher than most of our competitors, but not as high as others. I see your point about a sliding scale being a demotivator.

    My challenge is that I really want to award our partners that are making sales and try to bump up the performance of those partners that are doing okay.

    Great comments as usual Mr. Coley!

  4. #4
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    Fyi........
    you'll never make everyone happy with your commission structure...........

  5. #5
    Affiliate Manager
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    Shoelover,

    Thanks for the feedback. Do you care to elaborate? If you are one of our affiliates, please let me know what I can do to make the program better. I take my affiliate management duties seriously, so when someone complains I need to know why. Go ahead and post your answer on the forum, but I also encourage you to call me. If you are one of our affiliates, you'll know that my direct phone number is included in every email I send out.

    Cheers,
    Justin

  6. #6
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    I run an affiliate program as well. And when I ask questions such as yours, I get the same sort of response - different things motivate different people and you wont make everyone happy.

    Like the person who didnt like the sliding scale of commissions. For some merchants, depending on their operating margins, the "value" of a sale depends on the volume of sales being generated.

    Some affiliates like free shipping offers because it increases conversions, other don't care. Others see discounts as a bad thing, some would rather have a higher commission than a product offer that increases conversions. Some love bonuses for hitting certain milestones, other dislike programs that dare offer a bonus for hitting targets and view bonuses as a sign of a weak program.

    bottom line is that it is all over the board

  7. #7
    Affiliate Manager
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    Shoelover,

    Sorry about that! I misunderstood your reply. I thought you were a disgruntled affiliate . You are definitely correct, different people are motivated by different things.

  8. #8
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    no problem.

    As an aside, I was just told I was antagaonizing my affiliates by sending out this email that would help boost their commissions to a potential 20% a sale

    Happy New Year.

    At XXXX, 2008 has officially been deemed the year of the affiliate - XXXX's goal is grow its affiliate sales by leaps and bounds. By the end of 2008, XXX XXX wants to generate $xxx,xxx a month of affiliate sales and payout as much as $xxxxx a month in sales commissions to you. And we wont be too upset if we exceed these amounts

    This is the plan for XXXXX affiliate program for 2008 that will allow affiliates to earn as much as 20% on every sale.

    1. Increase base commission to 15% for every affiliate who shows us that they have active links to our website. Active links must be demonstrated to XXXX each month by simply responding to our monthly email and including a link to one of your pages that has a XXXXX banner or text link on it. If you do not send us in your link at the beginning of every month, your commission will revert back to a base of 10%. We will prompt you to send us your links.


    2. XXX XXX will pay you for your input!!! When XXX asks for feedback or input from affiliates, XXXX XXX will reward those who respond with meaningful insight (i.e. telling us that our ideas our great doesn't count - We want and need specific and explicit input to our questions) by increasing their XXXX XXX commission by an extra 0.5% per response. Affiliates are eligible to earn a maximum of 5%. We may ask you to tell us if you like our artwork (Why or why not - how can we change it), if you like the layout of our site, or which affiliate programs are your favorite and how should XXXX XXXX emulate those programs etc...

    Additionally, XXXX XXXX is on the verge of making an announcement about a marketing arrangement that will greatly add to brand recognition of XXXX products.

    So remember - send us your links!!

  9. #9
    Moderator MichaelColey's Avatar
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    I wouldn't say antagonizing, but I would say annoying. Affiliates aren't here to email you monthly or give you feedback. We're here to send you sales.

    Giving someone a commission for showing that their links are active isn't a bad idea, but requiring them to confirm it monthly is asinine.

    Commissions shouldn't be tied to providing feedback. Many good affiliates will provide feedback anyway. Reward them when they do. And follow their feedback. That's the biggest reward.
    Michael Coley
    Amazing-Bargains.com
     Affiliate Tips | Merchant Best Practices | Affiliate Friendly? | Couponing | CPA Networks? | ABW Tips | Activating Affiliates
    "Education is the most powerful weapon which you can use to change the world." Nelson Mandela

  10. #10
    Beachy Bill's Avatar
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    What Michael said.

    I would certainly provide feedback to substantiate the setting up of text links or banners, but would NOT do it monthly. And, if that requirement would "cost" me 5% in commissions I would be looking for another merchant to promote - pronto.
    Bill / Marketing Blog @ 12PM - Current project: Resurrecting my "baby" at South Baltimore..
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  11. #11
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    First of all, we all know that the majority of people who sign up for affiliate programs don't ever get involved in them - i dare say if you have 5% who are active and sending you sales.

    "commissions" aren't tied to providing feedback or showing me the links - "bonus commissions" are

    Second of all, any reasonable affiliate manager isn't going to start chopping commission once they have started a line of communication with affiliates, the problem is that the majority of affiliates never respond to any email and you can't get a peep out of them.

    While an aff's are not "here to email me monthly", I consider them my salesforce and like my non - internet sales reps with whom I talk to at least once a week, I need to hear from them. If I have to bump their commission, so be it.

    The chances are that a competent affiliate who is generating sales from any program has somewhat of a regular communication with the AM. I can't imagine that any AM who has high producing affiliates doenst attempt to get in touch on a regular basis, unfortunately, I have no real way of getting someone to respond to an email or question short of adding some additional motivation via bonuses.

    A large number of affiliates complain about programs that cut in active or under performing affiliate - this is the exact opposite - im rewarding those who are active and letting those who arent just sit about and make sure they are aware of the benefits of being involved

  12. #12
    Moderator MichaelColey's Avatar
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    Quote Originally Posted by shoelover
    I consider them my salesforce and like my non - internet sales reps with whom I talk to at least once a week, I need to hear from them. If I have to bump their commission, so be it.
    You are showing a severe lack of understanding of affiliates. We don't "work" for anyone, and what you're describing is useless work.

    I have merchants for which I generate 4 or 5 figures a month of commissions that I have never met, have never talked on the phone to, and seldom email. (I have others that I do see, talk with, and email more frequently, but none weekly.) Many affiliates work with hundreds of merchants and some with thousands. If every merchant expected even 5 minutes per week of useless work, those working with hundreds would need to hire another person just to handle those calls.

    The problem with your scenario is that affiliates don't see your offer as a "bump" in commissions, but rather as a "cut" in commissions.
    Michael Coley
    Amazing-Bargains.com
     Affiliate Tips | Merchant Best Practices | Affiliate Friendly? | Couponing | CPA Networks? | ABW Tips | Activating Affiliates
    "Education is the most powerful weapon which you can use to change the world." Nelson Mandela

  13. #13
    The Seal of Aproval rematt's Avatar
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    shoelover, I think it's a great idea to attempt to communicate more with your affiliates, but you may have a few misconceptions as to how a lot of us work.
    I consider them my salesforce and like my non - internet sales reps with whom I talk to at least once a week, I need to hear from them.
    First off, we are not your "sales force". We are independent business people that for the most part do not want a reporting relationship. Trying to force communication will only get you ignored or dropped.

    As for emailing you monthly, forgetaboutit. Most of us work with dozens if not hundreds of merchants. If this became a requirement from even a small percentage it would take an inordinate amount of time that could be spent putting up your creatives.

    It's a great idea to reward affiliates for putting up banners (we love rewards), but as far as ongoing proof, look at it this way: If I'm sending you clicks and sales than I obviously have links up somewhere. Wouldn't that be proof enough? If I'm not sending you clicks and sales, it really doesn't matter what the commission level is.

    -rematt
    "I know that you believe you understand what you think I said, but I'm not sure you realize that what you heard is not what I meant." - Richard Nixon

  14. #14
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    I understand quite clearly, if you can find where i said or implied that affiliates work for me, please point it out. My sales reps are all indies, exactly like affiliates, I only pay them when they make a sale. That doesnt remove the need for communications

    are there any affiliate programs that you guys don't complain about? Some steal commissions, some dont have good payout structures, some pay late, some you join up and never hear from them again, some dont let you bid on key words..........so what is your ideal program

  15. #15
    The Seal of Aproval rematt's Avatar
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    I think someone hinted at it in an earlier post. There is no such thing as an "Ideal" program. Make sure your program is fair and clean and that you respond to affiliate requests and you'll attract and keep good affiliates. You will always have someone that doesn't like some aspect of your program but you can't try to please everybody.

    Two links in MichaelColey's signature can point you in the right direction:

    Merchant Best Practices Forum and Affiliate Friendly Policies

    -rematt
    "I know that you believe you understand what you think I said, but I'm not sure you realize that what you heard is not what I meant." - Richard Nixon

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