We may earn money or products from the companies mentioned in this post.
Before launching a new affiliate program, merchants need to consider, define, and set three main areas of program structure; commissions and attribution, cookie durations, and terms and conditions.
Determining your base line commission needs to take into consideration your average order value and conversion rates. Use these values to help determine the value of both a lead and sale. From there you need to settle on a rate that will entice publishers and affiliates to consider joining (and actively promoting) your program that is low enough to generate profits for your business.
Affiliate commission attribution identifies at what point during the sales process your affiliate partners will win a commission and how that commission will be split. Last click was the original affiliate attribution. New tracking technologies can now identify multiple touch points along the sales process and has opened the door to many options for attribution.
One key consideration is ensuring your content partners do not lose commissions based on a last click model that allows other partners to steal their hard earned commissions. Unique attribution models can help overcome the concerns of many quality content publishers.
Here is a great explanation of what attribution is as written by Sarah Bundy,“It’s understanding your data throughout the click path of your consumer buying cycle to understand what touch points and steps they took to complete a sale or final desired action and then assigning a value to each of these different actions.” SmallBizTrends, 2015
A cookie is the most typical form of tracking commissions for your affiliate partners. The duration of your cookie is the time allowed from click (or action that launches the cookie) to the commissionable action. Typically this cookie duration is set to a minimum of 30 days. Affiliate partners appreciate a longer cookie duration and some programs often use a 90 day cookie duration.
Terms and Conditions
Each location and jurisdiction may have specific laws and rules you need to consider when creating your affiliate programs terms and conditions. Beyond those requirements you will want to include; product exclusions, governing law, payment scheduling and thresholds, exclusion of purchases for the affiliates own use, trademark usage, disclosure requirements, acceptable and non-acceptable promotional methods, termination policies, and a modification clause allowing you to update your terms and conditions. These suggestions of course are just a quick outline of some of the things you will need to consider as part of your terms and conditions. Most affiliate networks provide merchants with a template or framework to begin the process of creating their terms and conditions.