Let’s act out a scenario. Okay, stay with me for a bit before you run screaming. You’ve got your own brand and your thing is making baskets out of ethically sourced eucalyptus. Don’t ask me if that actually exists, I’m just the imagineer here. You’re not a new brand, no… You’ve been at it for a while now alongside your fellow basket weavers, but it’s been tough reaching the right customers. So, you decide to find and connect with affiliates who can promote your unique baskets.
You manage to identify a few you want to work with, but now what? How do you get affiliates interested in promoting your baskets? How do you build a relationship with your affiliates? How does your brand stay competitive in a sea of other basket weavers?
Alright, it’s just one piece of the puzzle, but your commission rate is vital to giving affiliates a good reason to work with your brand. It’s like a reward in the form of a payment when a sale is completed through an affiliate. Think of it as a kind of glue that helps keep a brand-affiliate partnership together regardless of what other competitors are in your vertical. Need more? I got you.
“The commission plays a key role between the brand and affiliate because it incentivizes affiliates to promote the merchant’s products and services on their behalf in exchange for a commission percentage of the sale,” says Sonny N, Purply’s Tech Support Manager.
Christian H, Purply’s Senior Technology Account Manager, also mentions that “knowing how much to spend on affiliate partnerships is important to generating a positive ROI for a program. Each affiliate relationship is unique and may require different strategies to control spend while remaining competitive.”
In other words, figuring out how to set a commission rate that benefits everyone can be an overwhelming experience that elicits a new question: How can you know what commission rate to offer appeal to affiliates, sustain partnerships, and remain competitive
Well, Purply’s Commission Recommendations report is a great place to start. Why? Because it uses the power of historical data and AI to help you answer that very question. It gives you an idea of what brands similar to yours are offering affiliates in commission rates and how that compares to what you offer.
“The Commission Recommendations report is one of the most valuable reports within the Purply ecosystem. It helps address the question that essentially every client asks: “How much should I pay my affiliates?” On a per affiliate basis, you’re able to see how much commission you’re paying versus the average commission paid to that affiliate in your vertical,” says Rowland H, Vice President of Product for Purply. “If you’re paying Honey 5% and the vertical average is 10%, perhaps you should consider increasing commission in order to be competitive, improve conversion rates, and ultimately drive more revenue. In the affiliate space, knowledge is key, and with Purply, and the Commission Recommendations report, you’re equipped with all the information you need to successfully optimize your program.”
More or less, according to Purply Analyst, Parker S, the real value of the Commission Recommendations report is that it takes the guesswork out of whether you’re on par with other competitors and brands in your vertical. How? By detailing the affiliates you’re working with, the commission rates you offer to affiliates, and the average rates that similar programs in your vertical offer to the same affiliates. It allows you to not only feel confident when bringing on new partners at competitive rates, but also while monitoring your competition and identifying opportunities to optimize your partnerships.
“The feature definitely provides Purply clients more insight on their commission rate offering and how competitive they are or aren’t,” Sonny adds. “Clients often believe setting a high commission rate leads to greater sales, but doing so can eat into their profits. This feature gives them insight on where they’re at.”
So, let’s say this is exactly what you think your eucalyptus basket brand needs. You’ve not only figured out which affiliates you want to work with, but now you’ve got insight into where you need to be competitively. Now you can earmark the most competitive offerings and spend less time negotiating and wondering if you might be spending too much on any affiliate. Nice!
Now, I have to say, knowing what commission rate to offer isn’t the end-all. Offering one that’s high doesn’t mean affiliates will just mindlessly flock to your brand. There are still a lot of other things to take into account like, brand recognition, brand acceptance, other brand offerings, and a quality shopping and overall website experience. Like I said, it’s just one piece of the puzzle, but an important one that you can use to your advantage when building your program.
I asked Christian how he thought Purply users could make best use of the Commission Recommendations report and he said one surefire way is to check in frequently with the report to target the optimal amount to spend with each affiliate. And that’s no biggie because the report updates as your program progresses and even as the vertical average changes.
To wrap things up, I think you and your basket company have got this in the bag… I mean, basket. When in doubt, this handy Purply feature has answers for anything you’re unsure about when it comes to how to attract affiliates, offer a competitive edge over other brands via your rates, and more. Alright, I’m sure you’re entirely as tired of reading about baskets as I am writing about them, so cheerio!