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Reply With QuoteResidual income is but a new choice, and in the case of Natural Instinct it's a no brainier, existing program on Paid On Results was 15% and 90 days cookie, as Natural Instinct wanted to offer customer base income at the same commission rate and longer cookie there was no point in running 2 programs (we could have done that no problem, without affiliate having to change current links).Originally posted by Bob Saver
Of course I want the highest income I can get from a lead/customer delivered via an affiliate program, but is residual income the right approach?
When the idea was initial talked about, we had discussed all the things that customer base would mean, and it's no secret that many merchants use the approach of high initial commission and low cookies to then keep all the return customers visits full value to themselves, that's the model most are being sold on. And to be honest nothing wrong with that, but for an affiliate it’s just a very short term, give me the money now kind of view.
Natural Instinct’s customer base program was going to be a choice to run side by side with the standard commission program. The customer base program was going to have a 12% first sale commission and 8% for all return sales, however after Natural Instinct had a good think about it, he would rather work on getting the volume of sales so his costs go down, he can then get the products cheaper and so make more profit as to be honest not loads of profit in giving affiliate 15% of total sale value (that’s price with VAT and giving customer free postage and packing). So really Natural Instinct's basically saying to the affiliates, we want to work with you, we want you to promote us over any other store in our sector and for doing that we want to make sure your rewarded, time and time again.
You have to look at what the merchant has to offer, with Natural Instinct they offer, competitions, newsletters, when a customer buys something they send in the post along with the order a voucher for 10% off next sale and this voucher has no time limit to when you can spend it. Plus I am sure over time more marketing methods will be developed that will see customer coming back time and time again. Keep in mind that if someone buys something now, they will be on the mailing list for Christmas and Valentines Day next year, the cookie was 30 days and 90 days before and you can't honestly expect most of your user to re-visit them via your links, so your going to earn money from these people during these events. That to me says this merchant wants to build partners.What can I do to influence either the ultimate lifetime value of a customer or the merchants ability to sell-on and develop the relationship to the point that it has full value to me?
Yes, however like I have already said it was going to be 15% for standard and 12% for customer base first sale and 8% for return customer, but that was scraped in favour of giving all partners the chance to earn full commission and benefit form future sales, being a new merchant they couldn't exactly supply what percentage of people bought more than once in year 1. I can tell you looking at the stats here it’s amazing to see a couple of affiliate having return sales already, these couple of sales would have been picked up with the cookie as they are both inside the 90 days but what if the cookie was wiped, that be 2 free sales to the merchant but not with customer base it’s not.Could I be given the option of taking a higher initial bounty rather than rely on the merchant to convert and keep converting? Shouldn't it be the merchant that shoulders the risks (and returns) associated with good quality CRM?
Customer base as I and many other affiliates see it as a truly partner building experience, all the merchants that talk about partnerships really should be taking note before the competition do.
Quality of the customer in my books is simple, if they purchase from the merchant then they are already a quality customer, however getting customers that spend more than average will be down to the type of site you have and the kind of promotions you run. To get more money out of your user base you can remind your users of the site by making it easy to get from your site to the merchants site, also prompted them at key buying periods and so on.Question: What can I do as an affiliate to influence the long term quality of a customer?
The merchant can produce what they like and you would have to take their word that it’s true. I would hope as more time passes this information would be getting passed on to the merchants affiliate partners. However at Paid On Results the affiliate is seen as our number one more important commodity and we will shortly be sharing real stats from the affiliate-produced sales only that have gone via our network. No longer will you get fobbed off with our average basket is £120 rubbish, we will show you what the real average basket from the affiliate sales are, what the conversation rate is and will of course have things like EPC and so on. It will be interesting to see how many return sales you get from customers you send to a merchant and this information will be displayed also.What metrics will merchants produce (and be prepared to share) in the future that will make me prepared to shoulder the risk burden of CRM that is out of my control?
Residual Income and Customer Base income are actually 2 very different products. Residual Income normally means your paid monthly, yearly on the renewal of a service already bought, that someone is simply paying to keep using it. Customer base means they don't have to renew something as it's a one time purchase, however the merchant keeps marketing to them to encourage them to shop again, something all merchants do, the only difference with customer base merchants is that each time they make a purchase you get part of the sale.I will be joining the POR program since it is a better deal - from day one - than the current program. But I wonder what the future holds for residual income?
You know the other networks will start offering residual and customer base programs for all kinds of merchants at some point, this can only be a good thing for everyone. However it has to be accepted that some times the business model can not afford to pay a high percentage each and every time, so you maybe faced with a choice, do I take higher one time commission or do I take lower commission but get paid every time? On Paid On Results, merchants will be able to offer you this choice and you can swap from Standard to Residual without having to change or update your links in anyway. I don't expect all merchants to be a generous as Natural Instinct to offer up such a high percentage for on going sales, so I would definitely take it up and make as much money as you can from it, so that other merchants get the message that given the choice you rather be part of the business and help them grow the client base then be a one hit wonder who happy to swap links to another merchant at the drop of a hat.
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