Cpa Affiliate Networks And Tiered Commission Structures
The topic of this article will focus on an item that is sometimes misunderstood when
it comes to picking an affiliate company to form a professional relationship with, and many of the points in this article can apply equally well to many network marketing companies that use a similar compensation structure. The abbreviation CPA stands for cost-per-aquisition, and the basic core of this business model is to partner with a company that has already developed an online sales system for gaining leads and customers, and you as an affiliate partner will earn commissions based on driving customers to landing pages and then having that customer perform a certain action such as signing up for a newsletter or purchasing a product.The Number #1 Mistake That Affiliate Companies Can Make
If you have been using the internet for any number of years or if you have been watching or reading literature or information from the network marketing industry, you can probably remember watching many new companies appear on the scene only to disappear as quickly as they showed up. Sometimes this is due to shady business owners which operate a fly-by-night business model, but more often the business owner is a person of real integrity that makes the same beginner mistakes that so many new entrepreneurs make when starting a new company or when picking a CPA network to affiliate with.
The number one mistake that so many new CPA networks and network marketing companies make is this: Trying to promote the compensation plan as if it was a product! There is a right way and a wrong way that an affiliate network can use this type of tiered commission structure in their business model: If you do it the right way then you create a system that will reward your affiliates or representatives with long-term success, and if you do it the wrong way then you set yourself up for a fall and there is a possibility that you might even end up in legal trouble.
The Right & Wrong Ways To Use A Tiered Commission Structure
This information will benefit both those people who are on the corporate side of CPA networks and also those affiliates who are looking for a potential affiliate network to form a long-term professional relationship with. The reason that so many companies make the mistake of promoting their commission structure as if it was a product is ego: They probably spent a long time create what they believe to be an intelligent and fair commission structure, and since they spent so much time on it they want to show it off and so they include information about their "brilliant" commission structure when they should really be talking about their products.
A tiered commission structure for a CPA network is not necessary to experience outstanding long-term business success, but when it is employed in the right way it will create a meritocratic model that will reward affiliate marketers for their hard work by creating a small residual income that will grow as the scope of their efforts grows. Here is how you can see whether a company is doing this the right way or the wrong way: If they are treating their commission format as a product, they will probably have a section of their website with banners and other affiliate tools that are supposed to be used to promote their own affiliate site and not the products unrelated to the nature of the company. It does not take a genius to realize that this is redundant circular logic, because for a CPA network to be worthy of gaining super affiliates it must have two things: Great products, and a compensation structure that creates long-term benefits based on merit.
Now this is not to say that any affiliate network that has a section about promoting their own company is bad, but understand that if you are trying to screen out which affiliate networks are good or bad choices then a company who puts the promotional material for its own network ahead of promotional material for their products can indicate to you that they may be amateurs in the CPA industry and that they may not have faith or confidence in their own products.
There is a much better way to do things if you are on the corporate side of the company and you want to include a section about promoting the network itself to earn residual commissions: Wait until a particular affiliate crosses a threshold of either a certain dollar amount in personal commissions (say $50,000) or has been actively working with you for 1-2 years or more, and at this point you can send an email that says something along the lines of "Since you have proven yourself and your marketing talent, we would like to present you with an additional opportunity to market our own network to other aspiring affiliates to increase your residual commissions." An important point here though is to make sure that you do not promote this idea at any point prior to this, otherwise you run the risk of building an enterprise based on the "Ponzi-like" notion of simply exchanging money without any real valuable products or viable business model.
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