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Who is Lammo?
Posted by Lammo in Question: When is lifetime commission not lifetime commission?
Answer: Whenever a merchant feels like it.
I’ve just received notification that the Joe Browns program will close on buy.at on 3rd September, and I assume that with it will go the promised “lifetime commissions” on all referred customers we have accrued over the years.
Joe Browns commission structure was as follows: 10% on sales within the cookie period, plus 2.5% on every subsequent sale “for life”
Now I should point out at first that this program closure has been handled 100% properly, both by buy.at and Joe Browns, with one calendar month’s notice of the closure given to affiliates, and the generous 90 day cookie period will be honoured beyond that. Top Marks.
I am sad however, to see yet another merchant that promised “lifetime commissions” go back on their promise after a few years. Joe Browns are the latest in a long list of companies to have dropped “lifetime commission” at the drop of a hat, including Gaming Club on DGM, William Hill’s old indie program, and the infamous Blackstar indie program, all of whom I would no longer touch with a very large bargepole.
As anyone who knows me, or who has followed my posts on a4uforum over the years will testify, I’m a big fan of residual commissions, and if a merchant offers the choice of a flat CPA or lifetime profit share, I’ll opt for the profit share every time (as long as the commissions are fair – I remember BetDAQ trying to entice me into their indie program until I pointed out that every punter would need to bet at least £3,500 before I would even get the same amount as a £10 depositing player gets me through TradeDoubler.)
There’s nothing more buy.at could have done to prevent this, and I applaud them (and Joe Browns) for going for this sort of commission model in the first place that rewards affiliates fairly for the lifetime value of a customer that they refer. However, what normally happens with this model is someone know comes into the company (usually a new FD) and says “why are we still paying these affiliates?”,works out how much cashflow they’ll save in the short-term, and pulls the plug.
This, in my opinion is no different to the “bait and switch” procedure used by banks to “reel customers in” with an attractive offer, only to “switch” the offer to something much less desirable. Once again, my wonderful friend at ACME Bank sums it up perfectly…
Of course, there are still merchants out there who recognise the lifetime value that affiliates bring. So, if like me, you like to be rewarded for the true value of every customer you refer, please remember you have a choice in what merchants you promote. I would thoroughly recommend the following:
PrezzyBox on Paid on Results and Affiliate Window
Jackpot Joy on TradeDoubler
Bet 365 independent program
Natural Instinct on Paid on Results
Gadgetstorm on Paid on Results
Bingo Bongo independent program
White Label Dating independent program
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Good post.
I suggest affiliates avoid Joe Browns when they relaunch their affiliate program, which they no doubt will when the dust settles, just as most affiliates I know avoid the sleazy BlackStar/Sendit. These “bait and switchers” should realise that we affiliates are not powerless and will not accept anything they do to us.
What do you know Nadeem, they’ve already relaunched… on Affiliate Window, with a *temporary* increased commission rate of 15% (or a nice big juicy worm rate as it’s better known), but no lifetime commission, and a reduced cookie period of just 30 days.
I certainly won’t be biting though…
Hi there, I’m John Gaukroger, the Online Marketing Manager at Joe Browns and I’d just like to respond to the points that have been raised in this Blog.
Firstly I can understand and appreciate the views that have been expressed; however I’d just like to put into context our experiences with the programme prior to the changes being implemented.
When we originally launched the programme we were advised of the benefits of lifetime commissions but were not informed of the issues surrounding PPC, specifically restricting affiliates from bidding on our brand. We saw significant volumes being generated by affiliates but were concerned when these sales spikes coincided with our own distribution of in-house catalogues to our existing customer base. We investigated further and found that unfortunately affiliates had placed numerous sponsored links on our brand terms (including misspells). By analysing the ‘new’ customers received through the affiliate channel we found that the vast majority were existing customers who had clicked on affiliates sponsored links whilst trying to reach Joe Browns directly. To appreciate this fully, we distribute catalogues to customers every season and a large proportion of these visit the site to order. This meant that we were in effect paying for sales from our existing client base and worse still would continue to do so at 2.5% for subsequent sales every time we re-market to them. The affiliate channel had in effect cut our margins significantly with negligible growth.
It’s fair to say that our business has gone through a large learning curve when it comes to running an affiliate programme and we’ve made the decision that the original model that was set up is unfeasible for us as it has effectively increased the margins that we operate on. This has come at a time when we were looking to strengthen our existing relationship with Affiliate Window. We do see value in the affiliate channel, this has been demonstrated to us by particular partners but I hope you can appreciate it needs to be mutually beneficial for all parties.
I’m sorry if people feel that they’ve been misled by the loss of the lifetime element of the new programme but the volume of cross over with our existing client base meant it had to stop. I am aware that not all of the affiliates would have been acting in this manner but their volumes are significantly less. I have however chosen to increase the commission that we are offering until the end of September to partners who are genuinely providing us with the new customers and incremental sales that are needed to make any programme a success.
John Gaukroger
johng@joebrowns.co.uk
My understanding is that it’s the life time of the program, so if a merchant leaves a Network not much network can do about it. It’s not like the Merchant will keep supplying the Network with data of sales after they go, and I am pretty sure most people understand it to be that, however maybe a wording change is needed to make it more clear. For example all Paid On Results programs with a “life time” element as it’ is understood by Affiliates are actually called “Customer Base” programs and they only work as long as the Merchant is with the Network and we have always made that very clear.
By the way PrezzyBox “life time” element only works on Paid On Results. We are the only ones with Customer Base for this program, we did after all come up with the concept and PrezzyBox was the trail blazing Merchant to be the first to use it all them years ago
We would all like residual commission. Its a shame that this has happend and it makes me think twice about signing up with them or others that promise the same
John Gaukroger – - thank you for your explanation.
However, the fact is you claimed to offer lifetime residual income and you are no longer doing so. No matter what silky words or convoluted explanations you offer, you have broken the promise that you made to your business partners. Thereby your reputation has gone down in this industry and, just like some other advertisers who did the same, some affiliates will never work with you again.
You changing your rules has cost affiliates such as me a lot of money. I know of at least one other affiliate who is furious with you.
Offering a sweeter for a few days during the dead season when Brits are sitting on the beach in Spain is not going to sway affiliates opinions of you. Affiliates are savvy businessfolk and they know when they’ve been screwed no matter what the spin.
Rob, thank you for your response. We aimed to offer lifetime residual income for new incremental traffic, which as I understand it, is the whole concept for affiliate based marketing. In truth we ended up paying considerably for our own traffic and subsequent sales. Our programme had been running with Buy.at for some time and we honoured every affiliate commission during this period so affiliates have done very well out of our lack of knowledge. It was however a mistake and the company should not be held to ransom over this indefinitely. This is not a convoluted explanation but pure business fact, if you pay a 3rd party for your own generated sales then you are strangling your own business. If by some accident you were to pay me a percentage of your income for life for no added value how long would you let this continue? If on the other hand, this was based on an additional income stream which I had brought to you, the value would be obvious and anyone would be crazy to stop it.
I take umbrage to your comment that you liken this move to other advertisers in this market. I have never made a bad comment about affiliates. I see great value in their partnerships as long as the parameters are not open to abuse. I have spoken internally about the need to maintain a programme and not to close our minds to affiliate marketing. It was for this reason that I pushed through the current 15% commission to end of September as it is one of our busiest periods with the launch of a new range.
Everyone is entitled to their opinion and I’m sorry that you feel aggrieved but the programme is performing well and we will continue to reward affiliates for the incremental sales they generate. Just how it should have been from the beginning.
[...] Browns new affiliate incentive starts today Is this the same company as the one written about here? __________________ Nadeem, Azam Marketing. ‘1997-2007: 10 Years of Online Marketing Results’ [...]
This still reads as spin. If you offer lifetime commission and then change your mind you cannot possibly expect your affiliate partners to happily go along with that.
Why not fix the underlying issue instead – if ppc bidding on your brand was the real reason you did the cut and run, then why not simply kick out the abusers and withold their commissions?