Splitting commissions between affiliates

[unitminer]

Our company lunched Split commissions feature in our own affiliate program and it immediately started huge discussion between us and our affiliates.
The same feature will be able to use also our customers, but before we will release it I would like to discuss with you our experience from last few hours.

What is common decision process of our customers:
1. Customer reads somewhere, that there is anything like affiliate marketing
2. Customer search for affiliate software (e.g. on google), maybe he clicks on Adwords campaign of any affiliate
3. Customer wants to compare product with multiple competitors - he visits software comparison site
4. Later he reads forums and asks about opinion on selected software other users
5. etc ...
As you can see, decision process of customer can be shaped by multiple affiliates.

Until now affiliate softwares assigned commissions just to first or just to last affiliate, which referred sale.

We started maybe as first affiliate program reward all our affiliates working on same sale ... so also affiliates, which got nothing in the past get commission (smaller but gets at least something)

BUT Interesting thing: Now some of our affiliates are unhappy, that they got smaller commissions .... Some of them got commissions, which they will never get in the past and they are still unhappy .... isn't it paradox ?

We are sure, that it is now much more fair for all affiliates, but not all our affiliates understand it in same way.

Does anybody here any experiences about similar problem ?
Or do you have own opinion ?

 

[Linda Buquet]

Various affiliates and merchants will all have a different opinion on what method is best - 1st, last or split commissions.

Since you already have the capability to add split commissions, I say offer it and let the merchant decide which way he wants to do it.

 

[MattMcWilliams]

unitimer I think your spirit is right but that starts getting very complicated.

Last affiliate wins is the only accepted practice and my suggestion is to do that since it is proven to work.

 

[Linda Buquet]

Totally agree with you Matt and meant to add that 'last in' is industry standard and best way to go.

But his company offers an affiliate tracking software program, so I thought from their viewpoint, adding that feature since it's already developed could be a benefit just in case a merchant for some reason wants to have the ability to use that option.

 

[MattMcWilliams]

Ah OK Makes sense

 

[unitminer]

Hi,

Thx. for your response.
I wrote my first entry because I was a really confused from first negative reaction of some of our affiliates in our affiliate program, when I informed them about this huge change.

BUT it seems we were good advocates and now also affiliates, which had really negative opinion agree with our settings. We explained reasons and really every affiliate agreed, that we are correct. This is big step forward for us and we are now 100% sure, that we did right decision.


Back to Matt's opinion about "Last affiliate" - this is completely wrong and I can explain why:

Last Affiliate gets commission:
- only reason is to satisfy last affiliate, which knows, that he or his client did the sale - most common case is, that affiliate orders his own copy of product - very bad reputation for your affiliate program .... It is fraud for all other affiliates

First affiliate gets commissions:
this is more accurate technique, because first affiliate was probably the first, who introduced the product to customer and customer later just started examination, if product he found is good (maybe through other affiliates content like product comparison sites)


Both techniques are used only because of one reason !!!!
No affiliate software offer option to pay all affiliates working on same sale (at least until now). From this fact springs the fact, why affiliate marketers push first or last affiliate commissions! They had no other options.


Now we are planning to test next settings, which allows our software:
We will pay commissions to all affiliates, but we will give special bonus for first affiliate (I mentioned why) and later also for last affiliate.
I think, that we will be closer to opinion of Matt (pay last affiliate) and also to our opinion (pay the last affiliate), but we will be still fair to all of our affiliates, which will get also some % from each sale they referred.

I spoke in last days with multiple affiliate marketers and all of them agree, that our solution is revolutionary and opens big space for them. E.g. this solution was used to track more exactly ROI of Adwords campaigns .... Imagine, that you pay Adwords, you see some conversions in adwords, but you have to pay commissions also to other affiliates from same sale .... exact metric is hard without splitting of commission between affiliate "Adwords" and last or first affiliate

I can inform you later about our tests in our own affiliate program and about experiences of all our customers using this feature if you are interested.

 

[mla16]

I think it would depend on whether the commissions offered for the last affiliate were reduced because of the fact the other affiliates were also getting a slice??

 

[MattMcWilliams]

I think it would depend on whether the commissions offered for the last affiliate were reduced because of the fact the other affiliates were also getting a slice??

Good point...if not then great idea actually

 

[Linda Buquet]

Last Affiliate gets commission:
- only reason is to satisfy last affiliate, which knows, that he or his client did the sale - most common case is, that affiliate orders his own copy of product - very bad reputation for your affiliate program .... It is fraud for all other affiliates

First affiliate gets commissions:
this is more accurate technique, because first affiliate was probably the first, who introduced the product to customer and customer later just started examination, if product he found is good (maybe through other affiliates content like product comparison sites)

I disagree as do most affiliates, as does most of the industry.

If it's software or make money online products then sometimes the last affiliate was buying for himself, but that rarely happens with regular retail products and many affiliate programs prohibit it.

The reason it should be 1st, not last. is if the 1st affiliate did not close the deal they should not get the commission. The last affiliate, the one that actually helped finalize the sale should be the one that's paid.

There is a big problem that happens with 1st cookie gets the sale programs. Savvy affiliates that have been around the block will tell you this. If it's an established program that's been around for a long time or is pretty popular, PROs won't promote it at all. They know there is a good chance the customer got cookied 6 months or a year ago so even if they do the work to convince the customer to buy today, they won't get paid. They certainly won't do any PPC or paid marketing for a 1st in cookie program.

MarketHealth (previously JoeBucks) is one large affiliate program that used to have 1st in cookies and was forced to change because affiliates demanded it.

"I think it would depend on whether the commissions offered for the last affiliate were reduced because of the fact the other affiliates were also getting a slice??"

I'm sure commission would be reduced. He isn't talking paying EXTRA commission, but sharing the earned commission between 2 affiliates.

 

[unitminer]

Linda, but don't you think, that first affiliate introduced merchant's "best product" to visitor and if he will not do that, last affiliate has no chance to convince the customer, because customer will even not start searching for it ?

(BTW: cookie validity you can set in each good affiliate software, so old cookies 6 months you can filter without problems)

My question: Shouldn't first affiliate (or any affiliate in between) receive some percentages of whole commission ? Did they less effort to introduce "best-product" to visitor ?

As I mentioned, our software allows you to slice commissions and reward last or first affiliate with extra bonus. So also your scenario is possible to define (last can get up to 100% bonus - means whole commission for last).


I'm pretty sure, that affiliate industry standard "Last affiliate gets commission" was based just on fact, that softwares had no other options. We talked about this with some other affiliates and merchants and they agreed, that commission system used in the past was mainly formed by limitations of affiliate softwares.