Affiliate marketing is one of the most effective channels for generating sales and new customers. But simply having an affiliate program is not enough to maximize results. The key is keeping your affiliates actively engaged and excited to promote your brand above others. Therein lies the effect of compelling and thoughtful affiliate incentives.
Offering rewards beyond basic affiliate commissions gives affiliates motivation to passionately showcase your products time and time again. Incentives prove that you appreciate your affiliates’ efforts and want to thank them for their promotion.
This article will explore different types of affiliate incentives. We take a look at their unique benefits and share smart tips to choose incentives tailored to your business goals.
What are affiliate incentives?
Affiliate incentives are the rewards affiliates can receive for promoting a product or service, beyond the base commissions you offer them. Popular affiliate incentives include:
- Bonus commissions when affiliates reach certain sales thresholds
- Free products given to top affiliates
- Generous discounts for affiliates to try your products
- Contests and competitions with prizes for top performers
- Tiered commission structures where rates increase at milestones
- Access to exclusive events and experiences
Affiliate incentives work by giving your affiliates extra motivation. They provide a reason for affiliates to keep actively promoting your brand to their followers.
Incentives also make your affiliate program more enticing to potential new affiliates in your niche. You may offer perks beyond the standard commissions that your competitors don’t.
What to consider when choosing affiliate incentives
Picking the right affiliate incentives takes planning. When setting affiliate incentives, you must think about what would motivate affiliates and what your business can consistently afford to pay out.
First, review your budget to select realistic incentive amounts you can maintain long-term. Account for base commission rates, too, as they’re your core affiliate reward.
Next, determine if the incentives will be:
- Available to all affiliates automatically
- Tied to sales goals and performance
- A mix of both fixed and performance incentives
If you want to establish performance-based incentives, what must affiliates accomplish to get an incentive? Must they be a top performer compared to other affiliates? Or must they meet a sales goal?
Performance incentives encourage affiliates to drive higher sales. Fixed incentives help attract new affiliates more easily. As a business owner, you should always brainstorm creative incentives suited to your business model. Subscription programs can offer a recurring lifetime commission, while ecommerce sites can provide discounts.
Analyze competitor incentives, too, and add original ideas to stand out. The ideal incentives align with your growth and budget. They help acquire stellar affiliates while optimizing their ongoing performance.
Key benefits of affiliate incentives
There are many potential benefits of implementing a well-crafted affiliate incentive program:
Attract excited new affiliates
One major benefit is affiliate incentives help you stand out and catch the eye of talented, motivated new affiliates in your industry. They give your program extra appeal compared to competitors who only offer one flat commission rate.
You’ll attract influencers and content creators who are excited about all the ways they can earn extra goodies through your creative rewards.
Keep existing affiliates engaged
Incentives help keep your current affiliates engaged with promoting your brand over the long term. Rather than leading to complacency, your incentives reenergize affiliates. A detailed incentive structure gives them new milestones and rewards to strive for. Affiliates who feel appreciated and see pathways to earn more are more likely to stick with your program for the long haul.
Motivate higher performance
Well-designed performance-based affiliate incentives motivate your affiliates to stretch for higher sales and referral goals. If you offer bonuses for affiliates who make 50 sales per month, your top affiliates will work hard to hit that target every month rather than settling for a lower number.
Reward your best partners
Affiliate incentives let you single out and reward your standout affiliate partners who drive significant sales volumes. For instance, you could create an elite VIP tier just for affiliates who make over 500 lifetime sales, where members get higher commission rates, gifts, and other VIP perks.
Align payouts with business success
Most performance-focused affiliate incentives are tied directly to sales volumes or milestones. This aligns payouts to your company’s revenue. If implemented thoughtfully, your incentive expenditures will rise and fall in line with your program’s overall success, as you’ll only reward results that grow your business.
Popular types of affiliate incentives
Now that we’ve covered the benefits of incentives let’s explore popular types of affiliate incentives used by leading brands:
Temporary commission bonuses
Temporary bonus commissions are extra rewards given out during short time periods when affiliates achieve certain goals. These could be in the form of flat fees or added percentages of sales. For instance, affiliates who make at least 25 sales during the month of August could get a 25% bonus commission on top of their normal rate for that month.
Specific bonus time frames might include:
- Major shopping holidays (Back-to-School, Black Friday, etc.)
- Seasonal sales pushes (Summer Sale, Winter Holidays)
- Promoting new product launches
- Slow sales periods or times with seasonal dips
Temporary bonuses provide a burst in motivation for affiliates to focus their energy during the designated periods. They drive urgency around boosting sales at target times when you aim to increase revenue.
Tiered commission rates
With tiered affiliate commissions, affiliates permanently earn a higher base commission rate once they reach certain lifetime sales milestones with your program.
For instance, your normal commission rate may be 10%, but you might permanently bump up affiliates who make 500 total sales to a 12% commission rate. Reaching an even higher sales tier, like 1000 sales, could bump them up to a 15% rate.
Tiered commissions create long-term loyalty. Affiliates are motivated to stick with your program for the long run because they can progressively unlock better rates through ongoing referrals. Once they reach certain goals for you, their passive income gets a boost.
It’s important to clearly explain your tier system, so affiliates understand how to reach each new level. Adding tiers over time also refreshes excitement.
Giving affiliates carefully selected free products (or free chances to try your service) helps them write more authentic and detailed reviews, which boosts conversion rates. If affiliates haven’t tried your product before, it’s best to give them a product to try once they become your affiliate. This way, they know what a product is really like before they review.
Other popular options for rewarding affiliates with free products include:
- Shipping new affiliates a welcome package of your products
- Letting affiliates pick sample products after reaching a sales milestone
- Rewarding top monthly affiliates with free product bundles
- Surprising loyal affiliates periodically with new item launches
The ability to try more of your selection helps affiliates discover the products they most believe in. This enables them to better target niche audiences who will love specific items.
For subscription-based businesses, a powerful approach is paying affiliates recurring commissions. Rather than only rewarding the one-time initial purchase, you also pay affiliates a commission on every monthly or annual subscription renewal from customers they bring in.
This encourages affiliates to recruit long-term subscribers who continually renew. Affiliates earn commissions for the full lifetime value of each referral as long as they remain a subscriber.
Generous affiliate discounts
You may want to offer your affiliates deep discounts on your products. It helps them try more items to determine what to feature to their audiences. Discounts make it affordable for affiliates to buy multiple products even if they are more premium-priced.
The more familiar affiliates are with your products firsthand, the better they can assess which ones align best with their follower’s interests based on their niche.
Store credits for the affiliate
Another incentive is giving affiliates credits to redeem in your online stores. These credits let affiliates pick anything they’d like to try or review.
For example, you could:
- Reward new affiliates with a $50 store credit upon joining
- Give a $50 credit every quarter to active affiliates
- Give a $100 credit every quarter to affiliates who made a certain amount of sales
- Award a $500 credit to the monthly top affiliate
The key difference is that credits allow affiliates to choose the exact items they want rather than rely on available discounts. They promote what they select.
Occasionally, some affiliates might earn store credit for rewards based on the sales they make, but credits should be awarded in addition to cash commissions (not instead of cash commissions).
Store credit or discounts for the audience
Offer discounts, promo codes, or store credits to an affiliate’s audience, as this is an incentive for both the affiliate and their followers. Usually, brands make this reward available the moment an affiliate joins the program.
If a discount or store credit is available to affiliates’ audiences once they click the affiliate link, those audiences are more likely to click the link and purchase. This is a great reward for the affiliate as well, as it helps them drive more sales and earn more commissions. And of course it’s also a win for your business, as it helps you increase your revenue through affiliates
Audience discounts make promoting your brand more lucrative and appealing for affiliates. They help affiliates convert more referring traffic into sales.
Free products for the audience
A similar idea is to allow your affiliates to give away a limited number of free products to their audiences. This is typically done via contests, giveaways, or exclusive offers for their niche community.
Even giving away a small amount of free products creates buzz and excitement around your brand. The chance to get free samples motivates the audience to engage with the affiliate’s content.
Gamified rewards turn affiliate incentives into a fun competition, where top performers win amazing prizes. Prizes might include:
- Cash bonuses
- All-expenses paid vacations
- Free product bundles
- Items from desirable brands like The North Face and Yeti
- Electronics like tablets, smartwatches, or laptops
- Gift cards to popular, non-competing retailers
- Event access, like tickets to a show or sporting event
Gamified rewards tap into affiliates’ competitive spirits. If you choose to offer these incentives, it’s best to display a leaderboard so affiliates know where they stand
You’ll also choose how many top-performing affiliates are eligible for bonuses during each period, and how often you’ll award contest winners (typically, contests reward affiliates either monthly, quarterly, or annually). The prizes should be enticing enough to motivate affiliates to push harder.
Exclusive events & experiences
Holding special events just for your affiliates fosters community and brand engagement. These could include webinars, online courses to teach affiliate marketing strategies, or in-person meetups. Retreats, conferences, or social events are also common.
In-person events let affiliates network with you and each other. They feel valued as part of an inner circle.
Tips for maximizing affiliate incentive success
We’d like to end this guide by sharing a few tips to ensure your affiliate incentive program achieves maximum impact:
- Track performance: Use affiliate marketing software to analyze your affiliate program’s key metrics. You’ll see if incentives are optimizing performance. Adjust incentive structures if needed.
- Communicate: Provide complete transparency about how each incentive works. Let affiliates know what they must accomplish to earn rewards.
- Pay out fast: When affiliates meet incentive criteria, pay out rewards ASAP. Follow-through nurtures trust and satisfaction.
- Automate with software: Affiliate management software, like Referral Rock, is your best friend in this game. Use it to set automated payouts of commissions and incentives based on sales data, including tiered commissions.
- Incentivize affiliates for desired outcomes: Structure incentives to drive the business results you value most. That could be anything from attracting big-name affiliates to gaining new subscribers.
- Get affiliate feedback: Survey affiliates or form an advisory council to learn what incentive types excite them most.
- Refresh and evolve: Add new incentives periodically to sustain momentum. Retire incentives delivering low ROI.
Boost your affiliate program with affiliate incentives
Affiliate incentives are a powerful way to boost program performance by giving your affiliates compelling motivation to promote your products. Take time to design creative incentives tailored to your business model and growth goals.
Everything you’ve read here today can be achieved with Referral Rock’s flexible, powerful affiliate marketing software. Sign up for a demo today and see how you can take your incentive program to the next level!