A tiered commission structure motivates affiliates using commission rate tiers. Unlike flat commission plans, tiered commissions encourage your affiliate team to hit sales milestones. As the performance increases, your members earn a higher commission rate.
The most basic sales incentive plan awards a flat rate—X% or $X on every deal or per item. Tiered commissions, on the other hand, would be paid to the affiliates only if they hit a certain total referral order value, total referral order number, or total earned commission value. When well-designed, these plans can increase your overall performance, while remaining easy to administer, understand, and communicate.
In short, like many business concerns, it depends. Companies often put tiered commission structures into play when they feel that the flat rate plan is not driving the desired performance. Thus, they opt for a plan where they can specifically reward affiliates who over-perform and, at the same time, motivate the "middle-tier" to increase their performance.
With our app, you can easily build your own auto-tier commission rule with five main types of conditions. Your affiliates will get automatically leveled up once their performance meets the set condition level. The conditions might be based on:
- Total referral order value: total value of sales your affiliate refers to successfully. Both approved and paid commissions are counted.
- Total referral order number: total number of sales your affiliate refers to successfully. Both approved and paid commissions are counted.
- Total earned commission value: total value of approved and paid commission your affiliate gets.
- Total sales of downline affiliates: total value of approved sales created by downlines of your affiliate.
- Total sales of personal volume: total value of sales your affiliate refers to successfully. Both approved and paid commissions are counted. However, the network commission that your affiliate earns from their downlines will be excluded (in case you enable the Multi-level marketing feature).
To set the condition values, go to Management > Programs > Auto-tier commission:
Switch on Active to enable the Auto-tier commission feature, then choose one of three conditions, and set the program and its condition value accordingly.
- Each level can be set with 1 program only;
- The condition value of the higher level must be higher than the lower level;
- The maximum number of levels you can set is the number of Active programs you have in your account.
You can choose the Level condition to be the Total referral order value
There are 3 programs available in the account, you can set the condition as below:
In this setting:
- Affiliates who have less than 500$ in total referral sales (only sales of approved commission count) will be on program level 1.
- Those who reach 500$ in total sales will be moved automatically to program level 2.
- And once they get 1000$ in total, they will reach program level 3.
Once a program is deactivated or deleted, its level condition on the auto-tier commission setting will be removed as well.
Update: Great news! The function to reset Auto-tier commission after a certain period of time is now available. You can now utilize it to boost sales and optimize your affiliate campaign.
With this function, you can easily select the date on which Auto-tier commission will be reset after a certain period of time, depending on what you set up in the Number of months to reset field.
There are two types of Reset to level that you can choose from:
- Previous level: it will degrade 1 level from the current level of all affiliates after the reset date.
- Fixed level: affiliates will be transferred to the program whose level is indicated after a reset cycle.
You can choose the Reset level to be the Fixed level:
In this setting:
- The system will automatically reset all affiliates' levels to Level 3 after 2 months and on the 29th day of the reset month.
- All levels lower than the Fixed level will not be affected by the reset. Based on the above example, all level 1 and level 2 affiliates' programs will remain unchanged.
- If the reset date does not exist (e.g 29th of February or 31st of April), it will be the closest available date of the reset month (i.e. 28th of February or 30th of April).