Something that’s quite often mentioned on some affiliate forums is affiliate commission and what it takes into account. Now for different sectors its going to vary quite a lot based on a number of factors, im only going to cover the subject briefly.
The main affiliate argument is that they spend a lot of time, and money to get a sale. But for the merchant they don’t just get a sale, they get a customer. Now this is 100% valid, the merchant acquires a customer for the cost of one sale – so understandably the affiliate feels a bit ripped off, they might have received their £15 commission for that sale but the merchant gets a customer who might be worth £100, £200 or more over time.
The other side of the argument is this, customer retention and customer loyalty isn’t free. For example lets say a PPC affiliate drives a sale to a merchant and the user is then converted into a customer and the affiliate paid out a percentage of that sale. The customer is then very unlikely to return of their own free will, by this I mean they are unlikely to return without some sort of marketing effort unless the merchant is a very big brand. So for their second purchase the customer might go to their cashback site and purchase through them, in which case the merchant is still paying out on a sale to an existing customer. The customer might search for the product they are after and see the merchant name in the listings, remember them and click to buy. In which case either an affiliate is buying that traffic and being rewarded on the sale or the merchant is paying and paying for that click.
As you can imagine online a user looking for something is going to pick up a lot of tracking, the number of users who make a sale without and sort of tracking applied is very very low. People browse, price check, price compare, read reviews all these activities at some stage will involve some marketing effort – hardly anything online is free.
So when an affiliate asks for a commission to match the customer value rather than just one of the sale value can it really be justified?
