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Affiliate Program Incentives 101: How to Choose the Right Rewards in 2024

April 23, 2024

Affiliate Program Incentives 101: How to Choose the Right Rewards

Affiliate marketing isn’t dead. In fact, it was estimated to be a $17-billion industry in early 2023.

It’s poised to grow even bigger throughout the year, with businesses in the US gearing up to spend approximately $13 billion for affiliate marketing. This shows a significant growth compared to 2022 estimates, which was pegged at $8.2 billion. 

Whether you’re running a small business or a global enterprise, businesses of all sizes can benefit from a well-executed affiliate marketing program. When done well, an affiliate program can increase your reach, grow brand awareness, attract new customers, nurture customer loyalty and engagement, and engage brand advocates, content creators, and influencers. Additionally, affiliate marketing gives you access to social proof, such as consumer testimonials and reviews, which plays a role in influencing your audience’s purchasing decisions. 

A BrightLocal 2022 Local Consumer Survey further highlights the impact of consumer reviews. In the survey, they found that 49% of consumers trust reviews as much as recommendations from family and friends, while another 37% shared that they trust reviews as much as recommendations from the social media personalities they follow. Establishing an affiliate program gives your audience access to information or recommendations from your affiliates who are typically third-party individuals who are already using your product or people who love your brand. 

Furthermore, affiliate marketing is measurable, which means you can track your affiliates’ performance and your campaigns’ progress. Through tracking, you can identify top-performing affiliates and reward them accordingly. Moreover, you can determine which parts of your program are doing well, as well as which ones you need to improve. 

Choosing the right incentives is crucial to a successful affiliate program. In this guide, we’ll show you how you can choose the right rewards for your affiliate program, as well as how you can leverage these rewards to maximize your program’s growth potential.

Why Rewarding Affiliates Is a Must

Affiliate programs aren’t just for growing your reach and increasing your sales. It’s also not just about finding the right affiliates who can promote your products or services.

It’s vital that businesses reward affiliates with the right incentives to attract the right talent and maintain their relationship. Furthermore, the right rewards can motivate them to perform better, which can translate to better sales figures, more qualified leads, conversions, and customers, and continuous affiliate engagement. 

Aside from setting up generous commissions, there are many ways to reward your affiliates for bringing in new customers to your business. You can provide coupons, free products, and even competitions or giveaways that your affiliates can offer to their audience.

For example, some new platforms, such as cashback apps, can be used to leverage affiliate program offers. In this model, businesses provide such platforms with an affiliate link. These platforms then promote the affiliate links to their members. When a member makes a purchase using the affiliate link, the business will give a certain percentage to the platform for every successful sale. The platform will then be able to share a percentage of its commission to its members as a cashback incentive that the members can use to save money on their purchases. 

One of the most popular cashback platforms is Rakuten’s Cash Back program. On their website, they explain how the company is able to offer such a reward to its shoppers. Stores pay Rakuten a commission for promoting their brand to Rakuten customers. In turn, Rakuten shares that commission with their shoppers in the form of cash back incentives. 

Types of Affiliate Program Incentives

One-Sided Incentives

With one-sided incentives, only the referrer receives a reward for successful referrals. This model is ideal for brands that want to speed up their customer acquisition process.

Referrers can receive different forms of rewards, such as monetary incentives (cash back, discounts, loyalty points, or in-store credits), gift cards, branded merchandise, or free gifts.

Refersion’s affiliate program, for example, rewards affiliates with a 15% commission for each month that their referred customer maintains their subscription. 

Another example of a one-sided incentive model is Sephora’s Beauty Affiliate Program that rewards successful affiliates with more than just a commission. Affiliates can also enjoy free shipping, free samples, and access to exclusive offers, promotions, newsletters, and creative assets.  

Two-Sided Incentives

Under this model, both the referring party and the referred customer receive rewards for successful referrals. For example, when an affiliate successfully refers a new customer, they can get 15% off their next purchase, while the new customer may receive a gift card or discount for their first purchase. Aside from commissions, brands can also offer other valuable incentives, such as personal discount coupons that their affiliates can use for future purchases.

Milestone Rewards

Milestone rewards are tiered incentives, which means that for every tier that an affiliate clears, they get different incentives. This is ideal for brands that want to get many successful referrals. For example, if an affiliate brings in five successful referrals, they may receive free branded merch. If they get 10 referrals, the affiliate may receive a $50 gift card.

Recurring Commissions

Recurring commissions are given to affiliates regularly, as long as their referred customers are able to maintain their subscriptions. 

For example, PureVPN’s affiliate program offers a recurring commission structure wherein affiliates can receive up to 100% flat commission for monthly plan subscription purchases. For other plans, affiliates can get a 40% commission on top of a 35% lifetime recurring commission. PureVPN also offers special commissions and bonuses for top performers. 

Bonus Commissions

Bonus commissions are rewards given to affiliates who meet your pre-defined goals. The great thing about bonus commissions is that they can be tailored to fit your marketing strategy. You’re free to set up its terms, goals, bonus periods, and bonus amounts. For example, you can run a bonus that runs for a month. During this period, affiliates who can bring in five new customers can get a 5% additional bonus, while 10 new customers can give them a 10% bonus, and so on.

If you’re thinking of offering bonuses, you may want to consider the timing. For instance, you can set up bonuses during holidays or around big events like Black Friday or Cyber Monday. Aside from keeping your affiliate program competitive (and motivating your affiliates to perform better), bonuses enable you to offer a new rewards channel. They can also be used as tools to increase your conversions. 

Top Affiliates

This model rewards top affiliates who perform well for a certain period. For example, if you’re looking at their monthly performance, you can reward the affiliate who has brought in the most number of new customers for that particular month. 

Choosing the Right Incentives for Your Affiliate Program

Affiliate program incentives can play a significant role in shaping your affiliate program and building your relationships with your affiliates and customers. Therefore, you need to choose the most appropriate incentive. However, given the options available, choosing the right rewards can get real tricky real fast.

The right incentives enable businesses to attract high-quality affiliates, keep them engaged and motivated, and reap significant returns. Let’s look at how you can choose the right incentives to power your affiliate program.

  1. Audit Your Affiliate Program

If you already have an affiliate program in place, you may want to consider auditing it. Through a full audit, you’ll be able to determine whether or not your program is working or if you need to alter or even overhaul it. You’ll also be able to identify common issues that your program is facing. Some of the things you can uncover during an audit include the state of your onboarding process, how effective your tracking methods are, how you’re engaging your top-performing affiliates, and whether or not you’re offering the right rewards. 

Once you have the audit results, you can use the data to create a more comprehensive plan. This will also help you become better equipped to tailor your program and make it more effective.

  1. Simplify Your Affiliate Program

A good affiliate rewards program doesn’t have to be overly complicated. When you keep things simple, you’re essentially making it easier for your affiliates to bring in new customers to your business and earn their rewards. Plus, simplifying your program will make it easier to track their performance and reward them accordingly. 

  1. Determine Your Incentive Structure

How can you best reward your affiliates? Before you can set out choosing compelling rewards, you first need to identify what your affiliate marketing commission structure should be. Without a solid commission structure in place, you run the risk of having a stagnant program. Plus, you won’t be as effective in motivating your affiliates to perform better.

By implementing definitive commission structures, you can tailor your incentives to better match your different affiliate partners. Aside from having a commission structure in place, brands also need to regularly review it in order for them to effectively maximize their revenue. 

There are five commission structures you can use:

  • Competitive Fixed Margin. Brands will set up predefined commission percentages for successful sales. For example, you can set up a fixed commission of 15% for every successful purchase or new subscription. 
  • Time Decay. The time decay model rewards affiliates for successful conversions that are closer to your desired event or outcome. 
  • Position-Based. The position-based model bases commission according to when an affiliate is able to engage a customer during their buyer’s journey. 
  • Coupon Codes. Coupon codes are popular and offer a more flexible way of rewarding both the affiliate and their audience. Regardless of where the potential buyer has seen the coupon, the affiliate will still be eligible to receive a commission or reward for successful purchases. 
  • Cross-Platform Tracking. In this model, affiliates receive rewards regardless of the device or platform that a consumer uses to make a purchase. For example, a consumer sees your affiliate promoting your product on their mobile phone, but they make a purchase using their laptop. The affiliate is still eligible to receive a reward.
  1. Choose Attractive Incentives

When designing your rewards program, you must keep in mind that it should benefit both you and your affiliates. For affiliates, they can have another income stream that offers potentially lucrative returns. For businesses, a well-planned rewards program allows them to reap significant benefits, such as attracting new customers, generating quality leads, and driving sales.

Thus, when it comes to choosing the right rewards for your affiliate program, you need to get creative.

Do you want to offer solely cash-based rewards like commissions, or do you want to offer other benefits to your affiliates in the form of store discounts, freebies, or custom rewards? Aside from commissions, you can also make use of discount codes. You can offer personal discount codes, which the affiliates can use for personal transactions, or you can offer public discount codes that your affiliates can share with their audience. 

Apart from giving them rewards, it’s also important to recognize your affiliates and their efforts. With this in mind, you may want to consider acknowledging them to make them feel that you appreciate them. You can send them surprise gifts, feature them on your website, or give them awards. 

  1. Consider Including Non-Monetary Rewards and Other Incentives

Affiliates flock to affiliate programs because they offer an alternative way to earn. To keep things interesting, you may want to consider other incentives aside from commission boosts and bonuses. You can offer additional perks to further motivate and engage your affiliates. You can gamify your program and reward leading affiliates with free branded merchandise, access to exclusive offers, or free shipping. 

If you happen to have affiliates who have been with you for a long time, you can encourage them to grow and become an even bigger part of your program by getting them involved in your various business activities. For example, you can ask them for feedback, consider their output when you’re creating a new marketing strategy, or regularly give them updates about your upcoming activities. 

  1. Create Clear Terms and Conditions for Your Program

Implementing clear terms and conditions allows brands to implement their rewards program more effectively. When setting your terms and conditions, you must clearly outline when your affiliates can expect to receive their rewards. 

You should also think about how they’ll be eligible for the rewards. Will you be rewarding affiliates who can engage their audience during the awareness stage, or will you be solely focusing rewards for affiliates that drive sales? Will they receive a one-time commission or a recurring one? For payouts, will these be done weekly or monthly? Also look into payment channels. Will you be paying your affiliates via cash, check, PayPal, Wise, etc.?

It’s also worth noting that, while program updates are great, you shouldn’t change your terms regularly to avoid confusion. Constantly changing your program terms can cause your affiliates to become disengaged and lose their loyalty. 

  1. Don’t Forget to Pay Your Affiliates on Time

Make it easier for your affiliates to get their rewards. You wouldn’t want to tarnish your reputation by giving out late or inaccurate payments. Create a schedule and clearly state when your affiliates can expect their payments. Using an affiliate management software like Refersion allows you to efficiently manage affiliate payments and taxes. With Refersion, you can automate conversion approvals, payment scheduling, and direct payments. It also lets you offer more flexible payment options. 

Refersion marketing platform
  1. Provide Your Affiliates with Robust Support

Offering bespoke support to your affiliates allows them to maximize your campaigns better. Personalized support, such as providing them with a dedicated account manager, can help your affiliates activate campaigns faster and more efficiently, which, in turn, can potentially boost your sales faster. Aside from giving them an account manager, you may want to consider giving them access to creative assets that they can use to promote your products or services. Give them the documents they need so they can craft compelling and useful content. If they have questions or concerns, provide them with a dedicated support channel that’s available 24/7. This will allow affiliates from different time zones to get the solutions they need. By offering robust support, you’re also letting your affiliates know that you care about them and that you want them to perform well.

Keeping Your Affiliates Happy

Affiliate marketing programs offer businesses a lot of opportunity for growth, provided that they’re done well. With affiliate programs, it’s not just about raking in a lot of new customers. It’s also about keeping them and your affiliates happy. 

The key to keeping affiliates, particularly your top-performing affiliates, engaged and motivated is to offer exceptional user experiences. You need to create a well-designed and intuitive website that’s easy for them to navigate. 

You can also consider adding a self-service resource hub, which can help answer their frequently asked questions or acts as a how-to guide that will walk them through your affiliate program processes. Additionally, you may want to provide them with tools that will help make their campaigns more seamless and effective, such as creative marketing assets and affiliate marketing tools.

When it comes to choosing a commission rate—this can get tricky. You don’t want to be overly generous and lose out on great returns, but you also don’t want to be too stingy that you risk your affiliates leaving your program and switching to your competitors. If you think that offering higher commission rates isn’t possible yet, you may want to consider offering increased commission for certain periods or with specific promotions. As your business grows, then you can work on scaling your affiliate program so that you can offer more generous rewards. 

Another thing you need to pay attention to is choosing between recurring commissions and one-time payouts. By offering recurring commissions, you’re essentially keeping them engaged and rewarding them for increasing your sales. A new marketing channel doesn’t always automatically have a large audience so recurring commissions or a tiered reward structure can make it easier for affiliates to stay loyal to your affiliate program. 

Lastly, you need to be able to provide your affiliates with an intuitive, easy-to-use dashboard because you want them to easily track their performance and make data-based decisions. 

Wrapping Up

Affiliate marketing programs can drive growth for both businesses and their affiliates. 

It’s important to choose rewards that will help keep your affiliates happy, engaged, and motivated. You want to create affiliate program rewards that will encourage them to remain loyal to your brand while continuing to bring in solid results. 

Keep in mind that your affiliates are helping you promote your brand and sell your goods or services. Therefore, you want to provide them with the best value in return for their services. 


How do different incentive structures impact the behavior and performance of affiliates in various niches or industries?
Different incentive structures can significantly affect affiliate behavior and performance, as certain rewards might be more appealing in specific niches or industries. For example, a high commission rate might motivate affiliates in luxury goods more than in fast-moving consumer goods, where volume-based incentives could be more effective.

What are the long-term effects on brand reputation and customer acquisition when using aggressive incentive strategies like high commissions or bonuses?
Aggressive incentive strategies, like offering high commissions or bonuses, can initially boost brand visibility and customer acquisition. However, over time, they may affect a brand’s reputation if customers perceive the endorsements as insincere or if it leads to overly aggressive marketing tactics.

How do companies ensure fairness and transparency in their affiliate incentive programs to maintain trust and motivation among their affiliates?
Companies can ensure fairness and transparency in their affiliate incentive programs by clearly communicating the terms and conditions, using reliable tracking technology to accurately monitor and report affiliate performance, and providing consistent and timely payouts. Establishing an open line of communication for addressing concerns and feedback also helps maintain trust and motivation among affiliates.

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Written by

Werner Geyser
Werner Geyser