Next - Commission changes - Is There Any Irony

[Qui Gon Jinn]

I am not going to say word, yet, except that Next won the A4U Award for Best New Comer Merchant which has had a program of some sort for years, so figure that out. And was this expected considering the year affiliates have had to endure. I don't really promote Next, incidental traffic if that.

So those who do might have pro's & cons to debate on the commission reduction. We were pinged to check email inbox with their opinion, so just posted here for feedback & thoughts on the commission reductions on short notice ie the amount of the commission during the sale & the overall reduction pertaining to "claimed" reversal %'s.

It is now almost a year since the Next transactional programme started and I would like to thank you for your efforts to date. I would also like to wish you best wishes for the festive season and the coming New Year. Last order date for Christmas is 21st December and we will not be offering delivery until the End of Season Sale begins on 27th December. During the Sale period, between Friday 21st December 2007 at 5pm and Friday 28th at 6am, the commission for all sales will be 1% on all transactions. This is to take into account large reductions in pricing for sale items and to maintain our 100% approval rate. We Fully understand a 1% commission rate means activity will be unsustainable for some affiliates, however, this is the only way we are able to keep the programme open without temporarily suspending it. The July 2007 sale saw both significant uplifts in volumes and click to sale conversions. The new Season ‘Spring Summer 2008’ begins shortly in which we hope to redevelop the programme with new commission structures, creative for your website, and to gain closer working relationships with affiliates. The New Year will see some important new changes to the Next transactional programme, including a change in the commission to 2% across all product groups. As reiterated in previous communications, this is to take account of the 50%+ return rate. Please rest assured that conversions will remain strong and we will continue to approve all transactions on a daily basis. Only sales generated through illegitimate activity will be declined. Some housekeeping: The company went through a re-brand in July this year and new logos and creative are available from the AW interface for both the Retail and Directory accounts. There are still some old logos and creative on sites and in emails which will dilute the efforts of the rebrand and present a confused message to our customers. Please can you ensure that all creative is up to date and any old logos are removed from your publications immediately? Unfortunately, any affiliates using old creative after Friday 28th December will have their accounts paused until the old creative has been replaced. A directory focused email is now available on the Affiliate Window interface for you to use! Please feel free to download and distribute the email. While this email does not need to be approved before being sent, there are a few rules we would appreciate that you followed: - Please do not state in the sent area or in the subject that the email is from Next (the email must clearly be from you, the affiliate). - The domain where the email is sent from must clearly be the affiliates and must not contain ‘Next’ in it. - The Terms and Conditions, privacy policy and all copy at the bottom must remain in. - An unsubscribe link must always be included in the email, so receivers can unsubscribe from your email list (this is a legal requirement). It would be appreciated if any solus emails be sent to next@affiliatewindow.com for approval prior to sending. This will ensure that all correspondence sent is consistent with the Next brand and present an integrated message to our customers. To help you with your email campaign we may suggest some copy, offer some creative or make a few design tweaks here and there. We’d also like to take this opportunity to say that free delivery voucher codes are not to be used under any circumstances. We wish you all a happy and profitable Christmas and look forward to working with you in the New Year.

[loquax]

It arrived earlier than predicted...

"The January sales are already in full swing and affiliates are enjoying the traditional post Christmas commissions. However, within the first week some merchants announce that they’re not paying commission on any sales items. “Don’t worry” they tell affiliates “you can still earn a massive 2% on all our other items”!"

Affiliate Marketing - 2008 - The Year Ahead | One Little Duck - Affiliate Blog

Jason

[purple]

Originally Posted by loquax It arrived earlier than predicted... "The January sales are already in full swing and affiliates are enjoying the traditional post Christmas commissions. However, within the first week some merchants announce that they’re not paying commission on any sales items. “Don’t worry” they tell affiliates “you can still earn a massive 2% on all our other items”!" Affiliate Marketing - 2008 - The Year Ahead | One Little Duck - Affiliate Blog Jason

Mystic Jason you can see the future what are saturdays winning numbers.

[aaclapham]

One word from me - "Disgraceful"

[Elaine]

Jason I reckon you should remove this article from your blog before you give any other merchants grand ideas :eek:

Have you got any predictions for this weeks lottery instead - I'll send you a cure for your lackamincepieitus

I love the timing of this as well - wonder who's idea that was! Probably hoping it's going to slip under the radar and all be done and forgetten by t'other side of Christmas - I'd love to hear from those affiliates who do usually suffer from tons of returns and rejected commissions, do they find they are actually better off by having such a low commission but 100% acceptance - or - is it simply 'cos it makes life easier for the merchant/network not having to keep track of validations etc?

[Shane]

sad thing is we are not longer suprised by these measures

I just wonder how Next can make a case for this when they don't suddenly halve their staff's wages when the sale is on do they ? surely there is enough profit STILL in sale items to pay the full commission .. the mark ups generally big anyway so the original commission is pretty low IMO as it is so to reduce it is a further spanking

"this is the only way we are able to keep the programme open without temporarily suspending it."

errr suspend it then ! ... why make it acceptable to pay less.. ?? does nobody at networks see the direction this type of action heads down ? seems to be happening more and more because it's being allowed to happen, are networks so desparate for cash that they'll have affiliates treading water on rates rather than being firm and saying to merchants you pay a fair rate or can't play, suspend it till you can.

reduced commissions and zero commissions seem to be occuring too often yet the traffic environments affiliates are operating in are more competitive than ever .. affiliates need MORE commission not less or none !

I wonder if "we are having a sale on this month guys so I'm going to pay you half but can you still work full time please" would go down if I tried to manage my staff like that.

[Bud]

I hear 'Dixonitus' is very contagious! :eek:

[purple]

Originally Posted by Shane I wonder if "we are having a sale on this month guys so I'm going to pay you half but can you still work full time please" would go down if I tried to manage my staff like that.

I am sure I heard a story that staff have to work from 5am in the stores for the sales for either no extra money or at least the same rate and no extra for unsocialable hours.

Next had already cut commission for "christmas" but now down to 1% to if you even go high ticket for £100 all you are going to get is a £1.

I guess they do not see the affiliate marketing channel as cost effective.

[Elaine]

Originally Posted by purple I guess they do not see the affiliate marketing channel as cost effective.

I'm sure they would opt out completely if that was the case!

[Fraser]

Originally Posted by purple I guess they do not see the affiliate marketing channel as cost effective.

I think it's the opposite. With these kind of ridiculous commission rates I'm sure they are finding it very cost effective.

[purple]

Originally Posted by Fraser I think it's the opposite. With these kind of ridiculous commission rates I'm sure they are finding it very cost effective.

Fraser and Elaine your right I think I am too much in the xmas spririt, I am enjoying watching the 75p commissions coming in from next too much
What gets me is networks seem to be quite comfortable agreeing that merchants reduces their commission to these levels.

Although I guess the issue is if you dont like it work for someone else, but I bet lots of affiliates will still promote them so they will be loving the extra sales at the lower rate. Cheaper than and advert in the sun etc

[3wdl]

Can't say I'm suprised.

[KevinEdwards]

Hi,

Few points here:

Next retail launched as a new programme in January, hence eligibility for the A4U Expo award (previously the programme only paid out on catalogue requests not online purchases).

Secondly, we thought that suspending the programme, with the administrative headache and communication issues that would bring at this time of year, wasn't a viable option. We also believe that by continuing to offer a commission (albeit a reduced one) affiliates (as always) have the option whether to promote the campaign for the duration of the reduced commission rate.

I fully appreciate the programme will not be sustainable for some (as stated in the email) however there is an element of choice rather than being told that nothing will be earned. Realistically, given the huge number of active affiliates, there was no way we would be able to get the message across to everyone. By continuing to pay we are at least rewarding for promotion.

Sale aside the commission rate will be set at 2% ongoing. This level of commission is acceptable to Next in light of the returns rate and click to sale conversion. Previously at 3% and 4% the programme consistently performed above average for the clothing sector for EPC. I anticipate at 2% it will be around average, possibly lower, however, we will keep everyone posted on earning potential for the Retail element.

Having had involvement with this programme over the past year I've been conscious that Next has continuously sought to achieve an acceptable cost per sale. Something to bear in mind is that no other online promotion supports Retail - everything Next do via other online promotion is geared towards new customer acquisition via the Directory.

When the programme launched we were all amazed at not only the significant average basket value but also the click to sale conversion rate. As I've previously stated, why pay as much as your competitor in commission when you convert significantly higher than they do? Surely this acknowledges you're doing things well elsewhere? Any network worth their salt should be advising on commission rates based on a variety of factors rather than a published competitor base rate.

I can't categorically state whether this programme will be viable for all affiliates. I suspect it won't, but it will be a learning curve for Next that we will support them through.

I know there will be some additional improvements to the programme during 2008 so we look forward to rolling these out and hopefully seeing the benefits for all.

Communicating yesterday didn't give us any satisfaction, however, in light of pending improvements to the programme and in depth discussions with both agency and client we sent the email.

I am on hand all day to take calls and discuss what is happening with the programme. As Affiliate Window is moving offices today I'm not in Greenwich, but you can catch me on my mobile - 07974 810 547 or via personal email - kevin.edwards@gmail.com.


Kind regards,

[purple]

if you promote the next retail programme and a new customer signs up for next directory do you get the sign up and the commission for the sale?

Or do you have to promote next directory to get the lead payment and then you forgo the retail commission

[Fraser]

Originally Posted by KevinEdwards As I've previously stated, why pay as much as your competitor in commission when you convert significantly higher than they do?

I don't actually work with Next and I appreciate the time Kevin has taken to make this response but this line jarred with me and shows what I think is becoming a growing change in attitude generally.

The merchant point of view seems to be "How little can we get away with paying the affiliate" rather than "How can we fairly reward our affiliates".

I don't just mean this about Next but about recent issues like Dixons etc and any merchant that wants to try and push 0-1% commissions.

It just seems to be approaching it from an angle that doesn't make me feel comfortable in the long term.