Successfully developing an affiliate program requires strong commitment both in terms of time and money. If the pay is low then the work will be less quality. Products and services that do not have a high margin to work with are not suitable for an affiliate program. In most cases, the primary objective behind an affiliate program is to obtain a particular sales level. Other common objectives include increasing awareness and gaining new customers. The objective will depend on a number of factors. For example, objective may depend on how established the company is. If it is a new business, then will most likely focus on increasing awareness and gaining new customers. If it is an older company with a solid customer base, will most likely focus on sales growth through your affiliates.
Payouts are the most significant factor evaluated by affiliates. Therefore, they are an important consideration when developing an affiliate program. There are basically three payment structures to consider for an affiliate program – pay-per-click, pay-per-lead and pay-per-sale.
Pay-Per-Click – Each time someone clicks on a site through a banner ad, text link, graphic or other access point from the affiliate’s site, will pay the affiliate a fee between $0.02 and $1.00.Pay-Per-Lead – When a potential customer clicks on a banner ad, text link, graphic or other access point from the affiliate’s site, a form comes up, which asks the customer to complete and send. Each time a completed form is sent, the affiliate is paid a fee – usually a flat rate. Pay-Per-Sale – Also called a revenue sharing program, the affiliate is provided with a percentage of the profits when they make a sale – usually between 10 percent and 25 percent. Larger companies may pay more.
If the objective is to increase the awareness of the site and bring more sales then it makes sense to pay to affiliates with a combination of the pay-per-click and pay-per-sale commission structures.
Payouts are the most significant factor evaluated by affiliates. There are different types of payment structure that depend on the affiliate program.
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Tags: Affiliate Marketing