Traditional affiliate programs segment conversions into two (main) categories:
- Originating from an affiliate, which trigger compensation to the linked account.
- Everything else, where that compensation is gravy for the business.
The simple reality is that purchases without referrals are more profitable, at least in the context of that single transaction.
How then, do we handle non-referrals?
Keeping things as they are would mean doing nothing. Retaining the extra as profit, which the company is absolutely entitled to do, but that makes for a very boring discussion. Let us explore alternative uses for it.
Use it as a prize fund for an affiliate competition. Material prizes or cash may work well, but ask your affiliates which they would prefer! Depending on the number of affiliates competing, consider a multi-tiered competition. Discouraging new affiliates by pitting them against established veterans does not seem wise.
Apply it as a bonus to select affiliates based on predefined criteria, such as:
- Top performing newcomer (most leads, sales, revenue generated, in 30-45 days since enrolment).
- Most improved affiliate (raw metrics increase, percentages are too easy to game).
- Highest retention rate (based on some hybrid metric of referrals still active and ages of those accounts).
Randomly gift it to affiliates. The pool of candidates could be drawn from:
- All affiliates.
- Active affiliates (made a sale in the last N days).
- New affiliates enrolled in the program for less than N weeks (inspiration).
- Veteran affiliates (loyalty).
Combining these methods would be effective too. Multiple draws with different criteria.
Much like affiliate bonuses, except the rewards are given to clients instead.
- A free N months of service, for recurring billing situations.
- A license for another product offered by your company.
- An extra license to gift to another party.
Applying the criteria outlined earlier for affiliates (loyalty rewards for long-term clients, and motivational bonuses for newer clients), these rewards can create a positive client experience.
Consider a product that offers multiple editions (Personal and Professional, for example). Offer gift licenses (for distribution to another party) to a handful of randomly selected clients who have the Professional Edition, then track upgrades from those gift licenses and treating it as an affiliate sale or upgrade.
How effective would something like this be?