Have you ever been tight on your marketing budget and feared you might need to cut commissions? Markets can change, especially when utilizing internet marketers to promote your offers.
Your online sales will drop when you fall out of favor with search engines, promoters, and social media platforms. This causes fewer sales and less cash flow. It's a kneejerk reaction to cut your most significant expense.
Why Your Biggest Selling Expense Isn't An Expense At All
What's that expense? For any successful marketer, your sales commission will be a growing expense. It can be as much as 50% of your initial sale. Yet with a direct marketing mindset, that expense is really an investment.
Your affiliate marketers are like commissioned salespeople. They invest heavily in mailing lists, search engine optimization, and other front-end marketing necessary to place your offers.
If what you have doesn't convert, they will find another offer. Cutting affiliate commissions will only send them walking. If affiliate sales are a big part of what moves your products, fewer sales won't make cash flow better.
Before Smart Marketers Cut Affiliate Commissions, They Do This Instead
Work to make the internet marketing channel more profitable rather than cut commissions. Here are some ideas to get you started increasing cash flow without cutting affiliate commissions:
- Expire commissions after a certain period, then follow up each sale heavily.
- Take measures to increase transaction size or provide an immediate upsell with a high margin.
- Take steps to increase conversion rates across landing pages.
- Measure and test all marketing channels, share your results with affiliate marketers.
- Optimize other areas of your marketing, see what is pulling in measurable revenue.
- Increase overall prices to cover changes in the cost of goods.
- Invest in campaign optimization and analytics to increase conversion rates for affiliates.
- Add an upsell behind your front-end lead generation and affiliate sales at a lower commission tier.
Don't discourage affiliate marketers (your salespeople) by reducing commission. This advice is meant for internet marketing as well as selling across any channel.
In fact, the more you can invest here, the more sales you'll get.
While a few profitable solutions are available, look at everything before cutting established commissions. Often, you'll be surprised by the results. For most clients, they can increase transaction volume and size.
What Would Your Business Be Like Being Able To Pay Top Dollar For Customers?
Being known for paying out more to affiliates attracts top performers. The key is being able to pay more for a customer. Engineer your business to be profitable at a higher cost per lead (CPL) and cost per sale (CPS) so that you gain a unique competitive advantage.
You can literally price your competition out of the market. Being able to invest more in pay-per-click, sales commissions, and list purchases drive out cheap players.
Clients especially like when we help them with cash surges. This can be done with your affiliates, focusing on joint ventures with your top performers. Another option is to cash influx near the end of a typical customer lifecycle.
Either way, having an extensive list of customers is better than a small one. Being cheap upfront with the investment you make in new customers will guarantee fewer sales. Bypass the kneejerk reaction to cut the commission and do something from this article instead.
If you have questions or need help with a specific implementation of sales commissions that are profitable for your business, then schedule a consultation or write with your questions. You'll boost cash flow while building your business when you avoid this more significant sales commission mistake.
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