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How to Develop a Successful Payout Structure

Sep 28, 2016

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A great way to motivate publishers to increase their performance is to create an affiliate program that utilizes Performance Incentives and Bonuses. To some this might seem like a daunting and overwhelming task but it doesn't have to be! I'm here to help you manage the process in three easy steps that will generate more revenue for your CJ Affiliate program.

Step 1: Decide What You Can Offer

The first thing to do as you develop a successful payout structure is evaluate how much you can pay publishers based on the revenue you expect to earn from each transaction. In order to determine your benchmark commission rate, if you are running a leads based program calculate the life time value (LTV) of a customer, otherwise you can determine what your margin is on a sale. Once you have your estimated base commission rate be sure to pad it so you have some wiggle room for extra payouts in the form of Performance Incentives (commission increase with volume) and Bonuses (one time manual payout).

*TIP: Do not use Performance Incentives and Bonuses as an alternative for a base commission rate that is competitive to other advertisers in the CJ Marketplace.

Step 2: Group Publishers and Set Goals

In order to set up compensation structures that will motivate publishers across the board, divide publishers into segments based on performance: new, inactive, middle, and high-performing. Then create Publisher Groups in the CJ Account Manager. For each Group set different yet inspiring and attainable goals. One way to do this is to create Program Terms with Performance Incentives that will kick in at each level of performance for each group. Another way is to create a manual Bonus for each publisher that has reached the determined goal that you communicated to their Group.

*Tip: It is very important to communicate with your publishers, especially when you make changes to their payout structure or provide an opportunity for them to earn more in commissions. Don't just send publishers an email at the beginning of the campaign, send another email mid-campaign to encourage performance, and send one again at the end of the campaign to congratulate publishers on their success or ask them what you can do to help them reach their goal next time.

Examples of Successful Incentives

  • Bonus: In order to get new affiliates active, an advertiser offers a one-time $50 bonus for the first 10 leads that they generate.

  • Performance Incentives: A publisher that drives an average of five leads per month could have an incentive kick in for driving seven. The group of publishers who average from 10 to 13 sales could be assigned a goal of 17.

  • Contest: An advertiser offers a $500 bonus to the affiliate who can generate the most sales during the next calendar month.

*TIP: Keep in mind that if a publisher joins a program with Performance Incentives mid-month, or has their program terms replaced mid-month, then the Performance Incentives only take into account the transactions from the join or change date and forward (not retroactive to the beginning of the month).

Step 3: Measure Success

For promotional campaigns that offer a bonus or contest prize we find that a 5% response rate is typical. Even if only 3 out of 100 publishers participate and meet the requirements it's well worth your investment—especially if you found your next top publisher. The goal is to increase performance across all publisher segments—small incremental growths across the board do wonders for a program's bottom line.

*TIP: You may only run a campaign for one month but many publishers will continue to leave your campaign up on their sites. This is why we recommend that you look at the results for your campaigns over a three-month period.

 

To learn more about Performance Incentives and Bonuses, please visit the Support Center.

For more information on managing your CJ advertiser program check out these articles:

Top 5 Ways to Strengthen Publisher Relationships

Top 5 Ways to Grow Your Advertiser Program

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