Increases : Commission vs Consumer Offer

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One of the top requests an affiliate program manager is likely to receive on any given day is, “Can I get a bigger commission“.  And certainly it’s a question worth asking because it’s rare that the program manager doesn’t have a few percentage points available over what the baseline offer presents. For partners that are making sales and bringing in good business, well who’s going to say no to them! It takes a brave program manager to say no to that!

Getting that bigger commission may involve a bit of positional trading, bump the brand up a slot to get an extra few percentage points on the commission, brush up the content , add a new review or any number of “value-adds” that makes the exchange worthwhile for both merchant and affiliate alike

But, is that the most effective use of those extra percentage points, will it result in a significant increase in revenue for the affiliate? Or would they be better off having a small personalized offer , deal or coupon that can drive a better conversion? A saying we hear often on the forums when discussing the right commission level is “100% of nothing, is nothing!” , meaning, you can offer me as much commission as you want, but if the product doesn’t convert, then it’s a meaningless commission offer.  The battle of conversion increase versus commission increase.

The benefit of any commission increase will be best appreciated if the affiliate sees a corresponding increase in conversions. This in turn is reliant on what changes the affiliate makes to their pages to better position and pre-sell the merchants products or brand. The question is, would a straight up deal or offer be a quicker route to increased conversions?

Obviously the type of consumer deal offered and where it ends up are also going to be key players in conversion, but assuming the affiliate is already sending quality traffic from that source then you’d hope to see a nice spike in the  click-to-order ratio.

You can play with the numbers all day long to try and find the sweet spot, but the reality for  merchants, is that a conversion increase is always better for their bottom line. For an affiliate it’s going to depend on how big an increase that conversion is, versus a potential drop in Average order Value (due to a coupon or deal)  versus what they might gain in earnings with a straight up commission increase. It’s not as clear cut as one might think, or wish it was.

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