Next Getting Ready For Christmas

[Frostie]

It appears that Next are dropping their commission rates from 4% to 3%, just as the Christmas traffic is starting to arrive. I wonder who will be next to also lower their commission levels just before Christmas?

The reasons given are;
- well, there's no reason reason at all which is sad

The email does mention that their 'much wider communications programme' includes ' high profile TV adverts'. Why do companies do this? They have a system in place that costs them a guaranteed 4% per guaranteed sale, yet they drop commissions to fund a TV advert that doesn't guarantee a single sale?

Bit miffed at this, especially the 48hr notice. Do no networks have a clause in place that protects decreased rates for a specified length of time? Program closure is usually 1 month, PPC introductions should IMO be 14 days, increase in %age should be immediate and decrease should be 7 days.

Not a happy day here at the Frost Farm

EDIT
Just noticed in the email the reasons are to 'accommodate elements such as returns and cancelled orders'. Surely these type of things are built in when first deciding on the commission structure?

[Elaine]

well I'm bl**dy fuming - I was just considering increasing their profile, despite the skanky 4% - you can't tell me that they don't have a heck of a good margin on all their products - but now this - it's a joke

I'm beginning to get the feeling that some merchants are just taking the proverbial when it comes to paying Affiliates what they are due - reducing rates inceasing rejections - I reckon we should all simply promote Prezzy Box and Buyagift - at least they appreciate us.

[Shane]

hmmmm let's turn NEXT into LAST instead

vote with ya mouse fingers

let's stamp this out before it starts again this year !

[Keith]

Next was next on my list to be added to my new site, it just lost its place in the queue

[KevinEdwards]

Hi,

I appreciate this is short notice on the commission drop - and we apologise for this - but I stand by the commission rate, it is still fair and competitive.

When asked by merchants what commission rates we recommend they pay it's fine to benchmark against competitors all things being equal but lets look at the facts here:

Next pay out on all returns. Current return rate is around 50%. In other words you can pretty much double the commission at a stroke. 6% now doesn't look so uncompetitive.

Let's now factor in the deletion rate - well there isn't one. We very occasionally delete the odd rogue sale but the approval rate is in excess of 99% AND we validate sales daily. Anyone looking at cashflow on this programme needn't worry. As we pay twice a month at Affiliate Window the turnaround time on your earnings is exceptionally fast and puts many other programmes to shame.

So what else does Next have going for it? Lets look at the conversion rate. A click to sale rate of 2-3% on a clothing programme is not unusual, perfectly respectable if unspectacular. Well Next boasts an 8-10% conversion rate, significantly higher than many of its competitors so again all affiliates making sales stand to benefit from this.

You don't need me to tell you that looking logically at a programme if it converts twice as well as a competitor the merchant can afford to pay half the commission to put itself on an equal footing and we'd be failing in our jobs if we didn't advise accordingly.

So whilst I appreciate your comments and am more than happy to discuss on a one to one basis (contact details below) I don't believe Next to be a remotely uncompetitive programme. This is not only borne out by the commission we pay out but the sheer number of affiliates who record clicks, impressions and sales every month.

Finally I should add that Next is very much focused on new customer acquisition and is exceptionally keen for affiliates to push the Next Directory. With the current TV ads adding significantly to the affiliate revenue and showcasing a range of new clothes now is a great time to push the Directory, especially as we pay £5 for every sign-up.

Thanks,

[Elaine]

[QUOTE]/Current return rate is around 50%[QUOTE]

okey dokey - but catalogues/department stores sell more than just clothes - so for those affiliates who promote housewares, toys, soft furnishing etc and don't attract a 50% return rate - can we expect a higher rate? Some programmes have different tiers depending on the products bought - seems a much fairer way of doing things?

[KevinEdwards]

Hi Elaine,

Completely agree with you and I know your focus for Next is not on clothing.

Paying different rates on different products has been discussed and i-level is aware of the need to reward affiliates who are driving non-clothing sales differently.

At this present time there will be no change due to the whole programme being assessed for its profitability. I know this has been a slow burn (the programme has been live since January) but it's still out there as an option, so don't think it's not on the agenda.

Ultimately you need to make the judgement call if you're going to hang around and wait to see if one day that changes. Realistically it won't happen this side of Christmas.

Thanks,

[Elaine]

thanks for your honesty Kevin - and your very speedy response - going to have to think about this one.

[jbrown_gtfc]

A free delivery discount code for affiliates to use, would go a long way towards retaining their high exposure on our site in the run up to Christmas.

Thoughts?

JB

[aaclapham]

When I first started Affiliate Marketing I joined the networks and was like a kid in a sweetie jar - big brand name, must have them not even looking at what commission they were giving out.

Two years on I will not touch a merchant with less than 5%, and concentrate on merchants with 10%.

I can only spend x time promoting merchants and I want the maximum return for my work. Fair enough you might not get as many sales but I only want to work with merchants that appreciate my hard work.

[Ditzy]

As a Next catalogue customer I have been guilty of ordering two sizes of something and sending the one that doesn't fit back ... you can never be sure from season to season or style to style what size you will be.

Having said that I wouldn't dream of ordering large items like furniture if there was any chance of having to send them back ... not least because it's just too much hassle.

Am I right in saying that John Lewis have different commission rates depending on which category the item you sell falls in to?

I understand that Next has to deal with a lot of returns but it seems unfair that affiliates who are promoting items, such as furniture, which make the company a decent wedge of money are then penalised for someone elses returned goods.

It will be interesting to see where Next go next

[fionah]

Hi all,

Kevin has covered off a lot of points here brilliantly. But as the affiliate planner for next with i-level I just wanted to introduce myself and answer a few points that have been mentioned since.

Ditzy / Elaine, You both mentioned that you would like to see a commission structure that reflects the products bought. I do agree that products such as furniture have lower return rates and of course different margins from clothing. Moving towards commission tiers that reflect those factors is obviously a sensible decision and one that has been discussed. However, at the moment the next site isn’t set up in a way which deals with this type of structure easily. We are investigating work arounds though so we’ll keep you informed.

jbrown_gtfc, Customers who order a directory do get free delivery on their purchases at present anyway. Because next are currently focusing on new customer acquisitions it wouldn’t make sense to offer customers an incentive to not sign up for a directory. As much as I’d love to offer it to you, it’s just not feasible given the current objectives.

Obviously Kevin, Rachel or myself are more than happy to answer any questions you may have so please feel free to contact me. My email is fiona.hammond@i-level.com.

Thanks,

Fiona

[Spreader]

I'm

beginning to get the feeling that some merchants are just taking the proverbial when it comes to paying Affiliates what they are due - reducing rates inceasing rejections - I reckon we should all simply promote Prezzy Box and Buyagift - at least they appreciate us.

I whole heartedly agree Elaine. Vote Elaine, Elaine for president - she obviously knows her pop!