That’s a commission rate that is paid out to the partners for the incentives and is issued for the valuable actions stated in the affiliate commission conditions, including increased sales, higher traffic, better engagement, or more actions on a site, etc.
A commission rate itself defines a payment associated with either a fixed payment or a percentage of a sale. That’s a backbone of affiliate marketing programs that can greatly stimulate to keep your affiliates engaged in the program and help them constantly improve their performance for better rewards.
Setting up the right affiliate commission rate (and conditions as well) usually requires some time and knowledge, but it can assist in creating a winning strategy for successfully running the affiliate marketing campaign. Here is a simple guide to set the most effective affiliate commission rate:
- Choose the type of affiliate commission (payment type, percentage or flat rate, the actual sum of commission rate)
- Estimate the average customer lifetime value
- Analyze the competitors’ commission rates
- Set your starting rates on the lower side (to make them more valuable for the first partners, and increase the commission rate later without losing the affiliates)
- Plan the bonuses for your affiliates if possible (to stimulate your affiliate partners to do a better job, like the increased commission rate)
- Consider the affiliate commission conditions
