You Need Volume For a Payout Bump?
When you start running an offer for a network, you’re almost never getting the highest payout available for that offer. You start at the “street” payout and can then haggle with your Affiliate Manager for a higher payout. Most of the time, if you ask for a higher payout, you’ll hear something like “uhh, ok, well, if you get 100 leads then i’ll bump your payout to $x.” The first thing that always comes to Nickycakes’ mind is, “why do they need volume from me to increase my payout? if they’re getting the same payout from the merchant for each lead, why are my 4 leads a day worth less, per lead, than someone elses 100 leads per day?”
To understand this, you need to understand why payout increases are given for offers. There are 2 reasons for payout bumps:
1. Lead Quality – If the leads you are generating are high quality and end up making more money for the merchant on the backend, they might be willing to pay you more for those leads. Unfortunately, since you have no real relationship with the merchant, and only the network, you might never see this money, even if the merchant starts paying the network more for your leads. For this reason, it may be a good idea to ask your network about how your lead quality is doing after running an offer for a couple months. Keep in mind that the merchants, in general, are making much more money per lead than you are.
2. Affiliate Value – Networks want to keep your traffic with them. They know that there are tons of other networks out there for you to choose from. They also know that there is always the possibility that you will contact the merchant directly and try to make a deal with them cutting out the middleman. For this reason, networks do what they can to keep your traffic on their network. Payout bumps are just one way for the network to keep you loyal to them and not jump ship to another network.
If you ask your affiliate manager why volume determines a higher payout, in most cases they will give you some BS about how that’s just the “rule” and that they can’t give payout bumps without volume unless they talk to their boss or whatever. Very few (but there are some) will tell you the real reason: With higher volume, your leads are NOT worth any more than at low volume, but you as an affiliate are worth more to the network when you’re bringing in more revenue for them, which is the reason you will get higher payouts.
Unfortunately for the new guy, this makes it more difficult to get started in the industry. Often even a 10% increase in payout can mean the difference between a profitable campain and a complete failure. If you’re already an established affiliate with a network and are doing high volume, it’s much easier to crank out new profitable campaigns because you’re probably going to automatically get a great payout right off the bat.
Anyway, never be afraid to ask for more money per lead, because it’s ALWAYS available.
Nice post man, like always, they are filled with juicy info
I totally agree cakes. I just signed up for a few new networks, and the first thing they ask me is “How much volume are you going to do?”. Granted, an obvious question that an affiliate manager should ask, however I have no idea how well I am going to get their “x” exclusive to convert, if I did I wouldn’t be working because I could then see the future.
Wicked post cakes! Makes a lot of sense seeing how things are structured.
Your AM must hate you cakes? I guess the fact that you send crazy traffic to them must make up for this fact.
Whats with the captcha?
@mubin:
Can’t say any of my AM’s hate me.
The captcha is cause akismet is a pile of shit but i get about 100 spam comments a day that i dont want to manually delete so this is the next best option.
The captcha is probably to keep the tards out. I would like to add onto what cakes said.
In the case that get the BS about needing x amount of leads before a payout, determine how much you need per lead to make the campaign profitable. If you are barely breaking even or losing some money, it may be worth losing some money to generate the lead requirements. When they see you mean business, up your payout, and make the losses back.
Say it is $2 per lead. And you did 50 in one day. That is $100. But it cost you $120 to run it for that day. You could easily get a $1 bump. Then you would make $150 given the same stats. a $30 profit for the day.
Yeah I know it may not seem like a lot per day, it was just an example of how much of a difference a payout increase can make. $2/lead is probably a zip submit or email submit, and probably wouldn’t get you a $1 bump. Like I said, it was an example. Maybe cakes can come up with a better one. Im exhausted from work and though I would check out some blogs. Something I don’t have much time for anymore.
This post just made me shoot an email at my AM asking for higher payouts on some campaigns I’ve been pushing.
Thanks, nickycakes.
@wade: quit spamming your blog link all over my comments
With a lot of the more reputable networks, simply talking to your AM before you even start the campaign and letting him/her know that you are interested in driving long term, quality traffic should be enough to give you some wiggle room. Let them know that you have done some research on quality keywords (ie: ‘buy auto insurance policy’ for an insurance offer) and you don’t know how much volume you could do with the current payout and the competitive nature of the vertical. This will make them much more receptive to help you out then ‘i did 100 leads today, can i get a bump?!’.
I think the reason most affiliate networks don’t give payout bumps without seeing some volume is just to weed out the tire-kickers and dumb newbies. If they automatically bump everyones payout for no reason at all, whats the point in even having a set payout price anyway if everyone assumes they should get a higher price?
I’m sure these affiliate networks have hundreds of retards and newbies signing up every day who will never send them more than a few hundred dollars in commissions ever. It would simply be a waste of money for them to spend a lot of time giving payout bumps individually to all of these people when it doesn’t improve the affiliate network’s business in the long term.
Speaking from a merchant’s perspective, I “typically” give bumps to the larger affiliates b/c I can really get a good feel for their lead value.
If someone sends me 3 leads per month, it’s hard to ballpark their lead quality (and my profit)…3 leads isn’t statistically significant. Alternatively if someone sends 1,000 leads per month, I have much more confidence in my calculations. If that affiliate is bringing solid quality & ROI for me, I’ll work with them to grow the commission and their volume. However,if you send me 10,000 leads per month and the quality is crap…you’ll keep your street payout rate. The volume MUST be quality. Volume alone doesn’t do much for me. If I want huge amounts of crappy leads, I’ll just pick-up the phone and contact a random co-reg provider.
The little guy isn’t always screwed though. Every now and then I will dig into my affiliate base and look for hidden gems (small/quality affiliates who may need some help or motivation to give my offer more exposure). In this case, I’ll offer a higher payout or bonus if they give me a more prominent feature or post additional links.
At the end of the day, I’m up against traffic and revenue goals just like Publishers are (or should be). In order to hit my volume numbers (while still keeping a solid ROI) I have to balance the mix of “special” payouts and street payouts. If I giveaway the store I may do more volume, but I’ll miss my profit targets (it’s a numbers game).
FWIW, I typically don’t respond to brand new affiliates who ask for special payouts. I don’t have the time to waste on this…too many people promise the world and then never deliver. However, if you develop a month or two of history (and then ask for a bump) your odds are much higher…now you’ve got some skin in the game too!
What is wrong with a little signature? At least I posted quite a bit, instead of like, “oh wow nicky you so good. clicky my site.”. I didn’t feel it was spam by posting a decent post. Just because I added my website as a signature doesn’t make it spam.
Just voicing my opinion, but it is your site afterall.
How are affiliate managers compensated?
Do they get a % of each lead/sale you generate? So if they give you a pay bump they would be cutting into their margin or are they payed some other way.
On the flip side, don’t forget that if you get pulled from an offer for shitty traffic (but it was profitable for you), you can always negotiate a lower payout and be allowed to continue running it.
Payout tiers/”bumps” are used to encourage more sales/leads to be sent. If I’m an affiliate making $20 a sale, but I see that I can make $25 per sale if I drive another X leads per month, I’ll work my ass off to get there. And once I’m there, I’ll drive even more, and eventually just ask for the max.
When it comes to payout bumps it’s an easy rule to follow. Traffic first, then ask. Show me don’t tell me at least that’s the rule I’ve always followed. Send 1k dating leads a day and then shut them off. Guess who’ll be knocking on your door offering you the top payout? Probably a little different response then you saying you’re going to send 1k leads a day before you send any right?
I’m on both ends as I own a network as well.. build a relationship with you affiliate manager/team leader. Once you have a base relationship established talk with them about what you’re thinking. For example I have affiliates pull their traffic and go elsewhere without saying a word. It’s kind of perplexing as they just disappear. Now as an affiliate I know my traffic can just dry up one day. Shit happens like that. The key is communication with your go to person. I have to tell people no I don’t have that offer or can’t pay you that much all the time. But I really appreciate the affiliates which I have a relationship built with that at least give me the opportunity to help them.
Just my 2 cents from both sides of the fence.