Performance based marketing can be really attractive for both parties. With the example of affiliate marketing and some tests I did myself I see some basics coming up which I like to share with you.

Performance based can be attractive because there is almost no risk. As a company you only have to pay a commission when a sale is made. For the publisher/sales person there is normally a higher reward.

Performance based solutions don’t suite all marketing campaigns though. Best is to keep in mind a sales agent you pay per sale.

You need a clear goal and clear tracking. If the goal is vague you can better stick to payment per hour or some other sort of payment. When a sales agent has to do all kind of side work he/she will feel this as a distraction if he doesn’t get payed. If he does get payed a company has often the feeling of paying too much.

Tracking must be good. When a sales agent gets the feeling his revenue is going to somebody else he will stop for sure.

The biggest disadvantage of performance based marketing however is time. How do you keep the sales agents motivated. They are investing time and do get a lot of interesting other offers. So there is a competition for the sales person’s time or attention.

This is were trust and incentives get in. And this is exactly the reason why you can do a lot of harm if you are going for a quick gain and forget about your sales agents/affiliates. Be careful you have a name to protect.

This entry was posted on Friday, October 3rd, 2008 at 4:27 pm and is filed under competition, Affiliate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.