Is my payout fair and competitive?

[jaidai]

My partners and I just launched our first affiliate program for our services (multimedia, web design, marketing, graphic design and print)

We have our payout set as the following:
tier 1: 10%
tier 2: 7%

Our products base prices range from
$49 - $999, with add-ons and such going as far as $5000 and more. So our affiliate can make a nice amount depending how they choose to market us. We also allow our affiliates to create their own links using the keywords of their choice. And it comes with an ebook written by Lisa Preston (instant niche emails / secret article converter fame).

One of products we sell is a web site maintenance plan that gives clients either 1 free web page developed, 5 free images created/manipulated, text updates and tech support (@ $35/a month) or 1 free web page developed, 5 free images created/manipulated, text updates, 15% off our regular prices, wholesale printing and tech support (@ $60/a month). Our competition usually offers this for around $75 / hour.

We are debating offering the web site maintenance plan eligible for commissions. or at least what type of limitations we should put on web site maintenance plan commissions. If we did offer this as part of the affiliate program we are considering either a commission pay as follows:
1. If they sell the monthly option: we would pay a recurring commission only for 5 times/ per client (so they would get 5 months worth of commission)
2. If they sell the quarterly option: we would pay a recurring commission only for 4 times 4 per client (so they would get 12 months worth of commission)
3. If they sell the quarterly option: we would pay a commission only for 3 times/ months per client (so they would get 18 months worth of commission)
4. If they sell the quarterly option: we would pay a commission only for 2 times/ months per client (so they would get 24 months worth of commission)

Of course the above is based upon the client resubscribing, otherwise you would only recieve a commission for what the client purchased.

I have 2 questions:
1. with the products we sale, tier 1/2 setup, and the options/materials we give them to help push us, Are we offering a good/attractive affiliate program?

and

2. Would Affiliates be interested in pushing the maintenance programs as part of the affiliate program?

Any input would be helpful since this is new territory for us.

[sorry for the long post ]

[Lynn Terry]

I think that it would certainly be a very appealing program for affiliates - yes. Obviously there are a lot of related topics and websites, so your affiliate program should do very well online - considering the size of the market.

[jaidai]

Thank lynn for the input. What do you think about making the maintenance plan eligible for commissions?

[Lynn Terry]

[Jim Guinn]

Affiliates work hard to bring you business at no cost to you. Pay them well for their efforts and give them residual commissions when the customer they bring you buys "added" services as time goes on. To be honest, in the web design area, 20% is more appropriate. Forget 2nd tier in this industry.

Jim

[jaidai]

Jim,
are you saying we are less likely have affiliates who would push an affiliate program to get 2nd tier profits?

[Jim Guinn]

I believe affiliates would welcome a 20% one tier residual commission more and probably work harder...than if there was a 10% Tier 1 and 7% Tier 2.

Affiliates, when you can get good ones, are tired of trying to nurture "deadbeat" 2nd Tier affiliates just to squeeze out a few more percentage points in commission.

Most affiliates who ARE making money would rather find a program that pays well based on their efforts alone...especially if the company compensates well...rather than having a reduced 1st Tier and the "unknown" under them on a second.

I know I would pass you up in a heart beat just based on your original commission figures.

Pay your affiliates well, give them the highest incentives you can, give them a good product, and you will get more, and more faithful affiliates. Forget 2nd Tier.

Jim

[jaidai]

[Rocco]

I agree with Jim honestly.

[jaidai]

Thanks for your input guys. It was very valuable. I wanted to keep the 2nd tier because we have a couple of people who have put us on their mailing list and will promote us through that.

Our commission will now be
Tier 1: 20%
Tier 2: 7%

We will be adding the maintenance plan to be eligible for commissions, and we will not put any limitations on that. Which means as long as the person they refer continues with a maintenance plan, they will recieve a commission.

so monthly maintenance plan referrals will get a commission for every month paid. Quarterly maintenance plan referrals will get a commission for every Quarter paid. Semi-Annual maintenance plan referrals will get a commission for every 6 months paid. and annual maintenance plan referrals will get a commission for every 12 months paid.

You guys have been a big help. I now see that your affiliates are really a sales team without a salary!

We have several connections with the entertainment industry. I think we will do some contests and such - and give the winners prizes like VIP tickets to movie premieres or things like that.

Do you guys feel contests work?

[Lynn Terry]

Those sound like good changes

As for contests, I see Affiliate Managers do this from time to time and it does motivate - depending on what the incentives are.