Wednesday, October 31, 2007

Residual commission

When joining an affiliate program, one should always look for a residual commission model, simply because the enormous potential in recruiting potential long term customers for the affiliate program. Many affiliate programs offer residual – sometimes named recurring commission – but not all are of the same nature, and sometimes the term residual is flat out misleading.

What does residual commission mean?

When referring a new customer to a pay per sale affiliate program, you will always get a commission on that sale, should it occur within the set period of time (length of cookie). With a residual commission, you will earn a commission not only on the first sale, but on all future purchases of that person. The referred customer will – in a matter of speaking – be yours; earning you commissions every time he revisits the affiliate site and buys something else.

Full vs. Limited residual commission

Some affiliate programs claming to offer residual commission will decrease the commission earned, limit the products eligible for commission or limiting the period of time the customers stays yours.

When facing a program like this, you need to look at the details of the program to see if they are really offering residual commission, or if they are using the term only to recruit more affiliates. If you decide on the latter, find another affiliate program - without limitations or lower residual commission - to join.

Potentials of residual commission

Clearly, the possibility to make a commission on future sales will make the overall revenue on each referred customer larger, but how much more can one make with a residual model?

Research shows that a surprisingly low percentage of online customers will return to make additional purchases from the same website. The reasons for this are unclear, but theories imply its in part because of the wide variety of online stores – making it easy to find a new web shop offering a lower price on the next item to be bought – and part because of the many dissatisfied customers of online shopping sites with little or no customer care.

Taking this in mind, the chance of one particular customer returning to an un-named web shop might seem slim, but if you choose your affiliate program carefully, you’ll see the statistics are lying – There are ways of greatly improving the chance of referring customers who will return again and again.

To fully take advantage of the residual commission model is to find an affiliate program of an extremely high quality. If you can find a well known brand in your niche, offering residual commission, you are one giant step closer to making some serious money.

Choosing a smaller alternative – perhaps with a higher commission – may prove wise when dealing with regular pay per sale programs, but if you are hoping for your referrals to return for some more shopping, you better be damn sure the site you are sending them to is of good quality. There are a few important things to consider when deciding on an affiliate program:

Overall look and feel of the website

If the website you refer visitors to – hoping to convert them into returning customers – looks shady, poorly designed or very slow loading, this will make the potential customer think twice. If they can’t afford a decent website, how much of a company is there behind the page?


Is it easy to navigate on the website? Are you likely to find what you are looking for, or are you bound to grow tired of it all and search google for an alternative shop?

A wide range of products

If the affiliate program only sells a few different products, the chances of someone needing more than one of course decreases, be sure to find a program with a wide range of products.


The prices on all merchandise is important, if they aren’t competitive, people will rarely – if ever – return for a second try.

When you have researched all your potential affiliate programs - offering residual commission - you should have a clear view of which ones will be more likely to attract their customers for a second, third and fourth time.

1 comment:

strive4impact said...

So Theo, what would you recommend would be good industries or companies that would make residual commissions possible?

Just curious if you'd be interested in exchanging ideas on this topic, since I've found some good residual programs/industries, and sounds like you might have too.

Please let me know if you'd be interested in exchnaging ideas.


Jonathan Kraft
Residual Commission Advice At Affiliate Advice