Replace Temporary Commission Increases by Bonuses

Posted on4 CommentsCategoriesAffiliate Program Management, General Discussion

I am signed up with a number of affiliate programs for the purpose of monitoring their promotions and affiliate motivation methods; and the day before yesterday (on March 17 at 2:05 pm) one program manager has sent me a newsletter which started with the following text:

I wanted to follow-up with you regarding the Tractor Supply Activation Campaign as our reports show your site has not yet generated any sales with our program for the past 6 months.   We want to help you make the most of our partnership and begin generating steady revenue.

Exclusive One Time Offer!
We have extended you a 7% Private offer now through March 31st as an incentive to become active in the [Merchant’s Name] program.  Please log into your [Affiliate Network’s Name] account to accept this offer to take advantage.

AND, as an extra incentive…

Generate $500 sales during this time frame and we will extend the 7% private offer through April 30th.

Up and downI am not mentioning the name of the company, because it is really irrelevant here. I will use them as an example of how this could have been handled better.

The default affiliate commission in this program is 5%. They have raised it to 7% for me for 14.5 days in March, and are telling me that if I generate $500 in sales during these 14.5 days, they “will extend the 7% private offer through April 30th”. And then what? Then it’ll drop back to 5%. Well… Maybe not. Maybe it will stay at the 7% mark through the end of the next month if I generate $500 (or will it be $1000 for the full month) in April too, and so on.

Here’s why I do not believe it’s a good incentive:

Anything that involves a commission drop isn’t a good idea. It just doesn’t go down very well with affiliates. Once you’ve raised that commission for them, either keep it at that level, or at the very least, give them a longer-term perspective (e.g.: keep generating $500 in sales every month, and we will keep you at the “private offer” level). Another option, which may even be more attractive (as dollar amounts are generally much more enticing than percentages), is offering your affiliates a cash bonus for performance.

For example, if $500 in sales over 14.5 days makes economic sense for you to give affiliates extra 2% in commissions, they why not offer them an automatic $10 bonus on every batch of $500 in sales sent in? After all, it is a fairly small gratitude as it is; so why cut it back at any time?

Also, when bonuses are tied to a time period (say, all sales through the end of Spring will qualify you for a $20 bonus per every $1000 sales sent in), it comes across much better than a temporarily raised commission level.

Affiliates reading this, I would also appreciate your input if you want to post it in the “Comments” area below.

4 thoughts on “Replace Temporary Commission Increases by Bonuses

  1. I think you mentioned the name when you left it in the text of the email. 🙂

    I don’t like when I only have until “the end of the month” to make a sales target and there are only 10 or so days left. It’s tough for me because I usually have all of my promotions planned out a couple of weeks in advance. That said, I do like SOME incentive to get me going that is at least realistic. $500 in 10 days probably isn’t for me for the type of site that I have and this particular merchant. It might be for something more targeted to my demographic (I don’t do any search at all).

    I think the worst are the bonuses that are so out of the realm of possibility that they are actually an insult. For example, I have gotten some that say that if I make $10,000 in sales in a month then I will get a 1% bonus. If they looked at my account, they know that I made about $500 last month. That’s a pretty unrealistic increase for a bonus that small.

  2. Ooops… Fixed the name issue. Thank you, Tricia.

    I was going to touch on the question of short notice too, and I’m glad you‘ve brought it up. It is always best when affiliate feedback comes from an actual affiliate.

    Thank you also for pointing out the unrealistic goal (or challenging for most affiliates).

    Both great points, and frequently repeated merchant mistakes (I actually mentioned them both in my last Affiliate Summit’s presentation). Thank you for your input, my friend.

  3. Hi Geno,

    My company is thinking about starting with a campaign at a new network and they have suggesyed an option to start the program with a volumebonus. So each affiliate that starts will receive a cash bonus at the 1st, 10th, 25th…..till the 1000th of sales. Bonus can go as high as $250. Do you think this will motivate they medium large affiliates to become more active?

  4. Joanna, thank you for your question.

    Yes, this sounds like a good bonus. However, when tying your bonuses to the sale numbers, you want to make sure it will make an economic sense for you as as merchant at all times. I don’t know what your lowest-priced product costs, but make sure that if all of these sales are the sales of this least expensive product, you are still happy paying the bonus(es). It is on this reason that I think it is normally better to tie bonuses to the monetary thresholds (e.g. $100, $250, $500, etc) as opposed to the number of sales (or 1st, 10th, 25th, etc).

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