When people think about affiliate marketing commissions, it’s usually the ones from large vendors like Amazon. While popular, the commission percentage is small and only takes a single purchase into consideration.
Other large vendors may give a flat commission fee for referrals that become customers. This is attractive because it’s often more than or equal to the initial purchase amount.
There’s a growing group of companies that are offering lifetime commissions to their affiliates. If you can afford to do this in your business then it may be one of the best decisions you make.
This article looks at why you should give serious thought to lifetime commissions for new and current affiliates.
Higher quality affiliates
Low-quality affiliates may be the bane of every business owner’s existence. These are the people who’ll sign up to your affiliate program because they think the offer is nice. When it gets down to the business of selling the product, they don’t understand the nuances of marketing it, the target audience, or the major selling points.
To make up for this, you create content for them and field their calls or messages. In the end, they bring in little to no income for your business but have used up resources that could’ve been used more effectively somewhere else.
High-quality affiliates are a different story. They understand the nuances of marketing affiliate products, do their research about your products and market, and set up their own sales funnels to convert cold traffic into income.
When they reach out to your team, it’s for a joint partnership that’s guaranteed to bring in more revenue for both of you.
The reason why lifetime commissions tend to attract higher quality affiliates is that it takes more time and effort to ramp up. The best affiliates understand this and are willing to invest in the process of building out that income.
They’re not necessarily looking for the vendor that pays out the most per sale. Rather, they’re looking for vendors that have a good retention strategy so their work will be rewarded in the long run.
Affiliates employ long term marketing strategies
This is an indirect benefit to implementing lifetime commissions. When an affiliate marketer gets a hold of a product or service that focuses on a one time commission, they work hard to secure that initial sale.
Many of them will use crash and burn tactics that force customers through a funnel. They may promise bonuses, guidance, and other things in addition to your product.
When it comes time to give those bonuses to the new customer, they either can’t deliver or it’s low quality. The customer is upset and associates the bad experience with your brand. Though they secured the sale in the short term, it has a long term negative effect for your organization.
On the other hand, lifetime commissions incentivize affiliates to put in a bit more work to create better assets and employ strategies that give a positive impression over the long term.
For example, instead of promising the world and failing to deliver, they may instead choose to build an authority site. There, they create high-quality content that’s a mix of affiliate products and educational pages. It may also contain a recommended products section that presents their favorite vendors.
This is what Patt Flynn has done with Smart Passive Income. It has led to an affiliate business that does over $2 million a year.
Less fraud attempts
While you may not be able to get fraud attempts to zero, lifetime commissions can do a lot to curtail them.
Think about the kinds of products that attract affiliates who’re trying to game the system. They’re either high-value tangible products or offer large one-time commissions.
Most affiliate management systems, including PayKickstart, have fraud detection systems in place but no system is foolproof. A lot of what you do to protect yourself boils down to making affiliate fraud less attractive.
Lifetime commissions tend to pay out less on individual sales but make up for it over the entire period the customer buys from the vendor.
For example, many SaaS products offer 30% commissions. Small business SaaS software is often less than a few hundred dollars. 30% of that isn’t much but it adds up over the course of 6 months to a year.
A fraudulent affiliate would skip over it because it’s not worth the effort but those same terms are attractive to honest affiliates. They understand that their efforts compound over time and are willing to put in the effort needed to become successful.
Tap into established affiliate brands
This is related to attracting high-quality affiliates. Many of the affiliates who sign up for programs that offer lifetime commissions have established brands.
They’ve spent time and energy building authority websites which attract a large number of visitors which trust them. Whenever they recommend a product, it’s sure to generate revenue for them and their affiliate partners.
Two things happen:
- They’re picky about the vendors they work with
- They invest time and energy to understand the market the vendor is targeting and whether or not it’ll be a good fit for their audience.
After putting in more effort than a lot of affiliates, it’s natural for them to want to choose partners that allow them to maximize revenue over time. Lifetime commissions are an attractive option because the first sale is just the beginning. They know they’re going to receive even more revenue as time goes on.
An affiliate program, whether it offers lifetime commissions or not isn’t the universal cure to all your growth challenges.
It’s only a good choice once you’ve established demand in your market and clearly define your target customer. Only then will it be a viable choice to grow your business.
When you’re ready, lifetime commissions are an amazing way to attract the right kind of affiliates to support your growth strategy. They spend time and energy to understand your business and what you bring to the table, create better promotions, and help you get in front of more customers than ever before.
Let me know what you think about adopting lifetime commissions in the comments and don’t forget to share.
Daniel Ndukwu is a regular contributor to the PayKickstart blog. He has extensive experience with online businesses, conversion optimization, and subscription revenue models. When he’s not writing insightful content, he works with other entrepreneurs to help them grow their bottom line.