How Retailers can Lower Commission Rates without Losing Affiliates

As markets fluctuate, one of the most common things retailers need to lower is their affiliate commission rates.

When handled incorrectly, this change can lead to a reduction in performance – or worse affiliates leaving in droves and the downfall of an affiliate program.

Affiliate commission rates are one of the first things marketing directors look at when the economy takes a hit.  

“How can we control costs?”  “How can we become more profitable?”  “Are we paying our affiliates too much?”

It’s inevitable, and honestly good business to evaluate all your cost structures to ensure the health of your affiliate program and company.

There are a few key aspects to lowering affiliate commission rates without loosing affiliates: 

Accurate Data

 When making changes to commission rates be sure you are making decisions based on solid data. You need to know:

  • Sales Volume
  • Cost of Customer Acquisition
  • Lifetime Value of Affiliate Customers
  • Profitability of Each Affiliate Partner 
  • Average Order Size of Each Affiliate Partner
  • Number of Repeat Sales for Each Affiliate Partner

Communicate with Affiliates

Aside from poor data, the biggest mistake you can make is not communicating with your affiliate partners. 

Call your producing affiliates as soon as you know you need to make a change. By involving them in the process you will gain their trust, help prepare them for the coming change and may even be able avoid the need for change in the first place.

The economy is stumbling and you need every advantage you can get to be successful. Do not underestimate the value of your affiliate relationships.

Are your affiliate commission theories supported by data or simply the thoughts of someone outside of the marketing department? 

Schedule time on Jamie’s calendar here to walk through the process of changing commission structures and affiliate rates.

Video: Make solid commissioning decisions in your affiliate marketing program.

Transcript of “Make solid commissioning decisions in your affiliate marketing program” video:

Hey, Jamie Birch here!

Tomorrow, I get to spend a whole day helping business owners and those who have been affected by the Coronavirus pandemic. If you are an affiliate manager, director of digital marketing, an e-commerce vice president etc., and you are trying to figure out what’s best for your affiliate program in relation to commission structure, I am here to help.

Many advertisers are making changes right now to their commission structures, and I want to make sure you know how to properly handle these changes – the ins and outs, and the positives and negatives.

If you are looking to make modifications to your commission rates and want help during the current pandemic, visit calendly.com/jamiebirch to set up a time to meet with me. If you can’t find a time that works for you, e-mail me at contact information or leave a comment on LinkedIn.

I would love to help and walk you through the process of setting up commission structures and affiliate payouts, and how discuss we do this with our clients at JEBCommerce.

Stay safe and let me know how I can help!

Wavy divider
Posted in ,