Firstly, there are various options to choose from when it comes to choosing the right affiliate structure for your business. No one structure is more correct than another – the choice depends completely on your wants, needs and expectations from the programme.
- New vs. existing customer revenue – would your business like to place a stronger emphasis on delivering new customers to your website through the channel? ‘New customer acquisition’ is a very common objective, and splitting your commissions into this structure is possible.
- Product categories and your margins – an increasingly popular way of splitting commissions. Taking this approach will implement a tiered commission structure, whereby higher commissions can be paid out on products which have a higher profit margin, and lower commissions paid on those with smaller profit margins. Your chosen network will be able to advise on how to set up product level tracking and the subsequent commissions attached to these.
- Type of purchase method – if you are a company that offers finance as a payment method, this will need taking into account. It may be necessary to decrease commission on finance orders to protect your margin, or even omit finance orders from commission completely. If you were to omit completely, affiliates would need to be made aware.
It’s imperative that the commission structure you choose to implement is mutually beneficial for both your business and the affiliate. If an affiliate feels valued and rewarded by the commission they are being offered, they will work harder to promote your products and business. The more information made available to an account manager, the more informed their commission structure recommendation can be.
It is also entirely possible to structure your commission on an affiliate sector by sector basis. As the affiliate industry is made up of various sectors, such as voucher code affiliates, cashback affiliates and shopping aggregators, it is often highly recommended to implement a tiered commission structure, dependent on the importance and where the affiliate sits in the overall customer journey.
Think about a typical customer journey, and where certain sectors of affiliates sit within this. For example, a customer be introduced to your brand through a piece of content you have produced. The customer is now subsequently aware of your brand, however, has chosen not to purchase at that time. The customer then returns to your brand website several days later, however, the customer has this time come through an affiliate tracking link on a voucher code website, as they now have an intention to purchase, as they have been provided with a new customer sign up offer. Silverbean believes that affiliates should be paid based on their value and proposition within the customer journey, creating incremental sales.
For the above example, you may wish to offer voucher code publishers a little less commission than your standard, given they are ultimately towards the end of the customer journey. This is of course decided on an industry by industry basis.