Affiliate Networks and Offers: How to Negotiate Higher Payouts on Offers
One of the biggest “levers” you can have in affiliate marketing is how much you’re getting paid. If you’re getting paid $10 per lead, and your competition’s getting paid $9 a lead, you have a huge advantage.
Now your competition has to make an extra 11% ROI from somewhere just to be even with you.
This is what affiliate marketing is all about – stacking up those incremental gains. Everyone wants that “gem” that’s going to get them a 100% profit boost.
But in reality campaigns work more like this:
- Exclude certain devices = 12% higher ROI
- Test landing pages vs direct linking =17% higher ROI
- Optimize your landing page for speed = 6% higher ROI
- Split test 5 offers and run with the top one = 23% higher ROI
But some of these wins are 10x easier than others.
One of the easiest wins for you is to negotiate higher payouts on the offer.
But getting a pay bump isn’t as simple as “Hey bro, can I get a pay bump so I can make more money.”
Here’s a lesson a learned a long time ago: no one cares about you.
Seriously. Once again: no one cares about you.
People act in their own self-interest.
Whenever you ask people for something always think: “What’s in it for them?”
As soon as they give affiliates pay bumps, the affiliate manager is eating into their own margins.
Has this happened to you before?
You hit up your AM on Skype for a pay bump, then get rejected?
- “Other affiliates are making stacks on the street payout dude”
- “Ah man it’s end of month and we’re struggling to hit our targets”
- “Sorry bro, this offer is on super tight margins, we’re hardly making anything on it”
Trust me, they are hooking up some affiliates with juicy payouts :-). But it’s not like you’ve got to be a super affiliate to get pay bumps.
I’m going to go into some simple strategies to get paid more from your affiliate network.
Do You Know How Affiliate Networks Operate?
Okay they’re not that ruthless, but they wanna make $$ too
Before we start, you gotta look at things from the affiliate network’s perspective.
The affiliate network gets paid from the advertiser, so here’s how the money flows:
- Every single time the advertiser gets a conversion, they pay the affiliate network.
- Then the affiliate network pays you.
Let’s say the advertiser has just got a conversion – they pay the affiliate network $9.
Let’s call this the Advertiser’s Payout.
Next is what the affiliate network pays out. When you first sign up for an affiliate network, you’ll see a low price. Like $5 low.
In this made up example for a lead gen:
- The advertiser is paying $9 to the affiliate network.
- The affiliate network is offering $5 as a street payout.
Following me so far?
As an affiliate, your goal is to get a payout way higher than the $5 offered.
An affiliate network’s dream scenario would be for you to run massive volume at $5. Because then they’re pocketing $4 per lead.
But that’s not that way the real world works. Why would you settle for $5 a lead, when another affiliate network can offer you $8?
So it becomes a game of compromise / negotiation. You’re trying to get a high payout, yet the affiliate network has to profit (and manage their risk).
So why don’t affiliate managers give pay bumps to every affiliate?
- They gotta make money. The offices, parties, and trips to Europe aren’t free.
- It’s also up to the affiliate manager’s discretion in some companies. Every single affiliate manager gets paid differently. But some AMs may get bonuses depending on how much profit they generate. Higher payout = less monies for them (or so they think).
Some affiliate managers might give pay bumps to more affiliates, and hope they make up for it with volume.
Other affiliate managers might never give pay bumps and try to make up for it in higher revenue per conversion (in theory).
“What’s In It For Me?”
Every time your affiliate manager does something, that’s what they are thinking.
“What’s in it for me?”
If they helped you get set up and recommended offers, then you never ran any traffic to them, you can’t blame them for ghosting you.
Affiliate managers didn’t get into their career to help noobies set up tracking links. They’re in it to make money.
So now you know this, how can you use it to your advantage?
1. Send More Volume
When you’re negotiating higher payouts on offers, you’ve gotta have some reason for asking.
If you’re sending high volume, you’ve got a solid reason to ask and they know you’re not kicking the tyres.
You can say you’re breaking even now.
Getting a pay bump can put you over the edge so you can send more volume. More volume means they make more money due to scale.But I know not everyone can do this, so there’s…
2. Focus on Traffic Quality
Let’s look at some scenarios of what might happen with different quality traffic.
You send 500 leads and you get paid at $8 each.
You bank $4,000.
They are horrible leads.
The advertiser paid you $4,000, but what if they only made $2,000 from your leads?
They lost money with your leads. Don’t be surprised if you get paused. This is the reason most CPA offers have caps.
You send 500 leads at $8 a lead.
You bank $4,000 again.
The leads are targeted and amazing.
The advertiser paid out $4,000 to you, but they turned those leads into $12,000.
What do you think they’re going to do in this case? They’re going to want more leads.
They’re gonna take you on an all expenses paid trip to Vegas if you keep delivering those leads.
They’ll do everything to keep you.
Before you were getting paid $8, now they may raise your payout to $12.
You just got a 50% payout.
Learning how to improve your lead quality will make you a lot of money as an affiliate.
3. Leverage Their Competition.
If you’re only just breaking even, it’s gonna be tough.
The affiliate network is making money, the advertiser is making money, but you’re not.
This is when you can bargain with you AM.
You know they’re making money on the offer, otherwise they wouldn’t be running it (90% of the time)
Here’s how you could pitch it:
“I’m breaking even on this offer, and thanks for recommending it. But it’s getting tight. I’d love to stick with you guys if I can find a way to make it work for both of us…
If you could bump me up an extra $X I can start to scale up the volume and make you guys some REAL money on this offer.
I see XYZ affiliate network are offering $1.50 more per conversion, what do you say? My shout for a night out in Bangkok at AWA if we can get this across the line :-)”
There’s no need to be a jerk when you’re negotiating.
Your affiliate manager has feelings (somewhere deep inside).
Think of it like you’re negotiating with a friend and you’re buying their car.
You both want to win, but you don’t wanna be rude and keep the friendship alive.
4. Build a Stronger Relationship with Your Affiliate Managers
There are benefits to having a great relationship with your affiliate managers.
They can “keep it real” with you.
“Bro, this is how much we get paid from the advertiser, this is literally the most we can offer you.”
“Word on the street is this advertiser is closing up soon, here are another 3 offers to test so you don’t lose momentum or your traffic placements.”
Not only that, but they can offer you the highest $ right from the beginning so you don’t have to play the pay bump game.
If you were an affiliate manager, would you give payouts to the affiliates who you’re tight with, or random guys demanding pay bumps on Skype?
How do you build the relationship?
- Treat them well
- Get on a Skype call with them if you can
- Thank them if they give you an offer that does well
- Meet them in person (affiliate conferences or travel to their city)
What To Do With Your Higher Payout?
Think of a higher payout like a dividend on a stock.
If you’ve got 50k in stocks and you get a $1,200 dividend, what are you gonna do?
You could drop it on a night out or a Louis Vuitton belt.
But that’s not gonna change your life.
You should be reinvesting it into more split tests and your campaigns.
The reinvestment could pay off 100x.
Where to reinvest?
- Upgrade your servers
- Try out a different bidding strategy
- Run more landing page split tests
- Test out different targeting or placements now that you’ve got the cash flow
Huge paydays come when you can drive more volume and expand your targeting.
Nobody got rich off pushing a single app install to Samsung S3s in Kenya on 3G between 7pm-10pm on the weekends.
Pay bumps allow you to invest more into the campaign and open the traffic floodgates.
Be Careful When You Negotiate Higher Payouts
Affiliates can be dumb and assume higher payout is everything.
Sometimes the affiliate network literally can’t give you a higher payout because they aren’t making any money.
In that case they can scrub / shave you to make it look as if you’re getting paid more when you’re really not.
Affiliate: I want a pay bump to $9!
Affiliate Manager: We can’t do that, we’re only getting paid $9 from the advertiser.
Affiliate: I don’t give a fuck!!! Make it happen or I’m switching networks.
Affiliate Manager: Hey boss, the affiliate’s being a chode and wants a $9 payout. We’re only getting $9 from the advertiser.
Network Boss: Bump his payout to $9 then and scrub 20% of his traffic. He won’t notice.
Affiliate Manager: On it boss!
Affiliate Manager: Bro, I was able to hook you up with that $9 payout you want
Affiliate: Hell yea I always get what I want! Brb, off to the Gucci Store!
If you’re confused here’s some info on scrubbing or shaving in affiliate marketing.
That’s why it’s important to always split-test affiliate networks.
Win + Win = Pay Bumps
You should always work on getting paid more.
But in order to get paid more, you have to create a win / win situation for everyone involved.
If the affiliate network isn’t making money ‘cause your leads are weak, you’re more likely to get paused than get a pay bump.
Also, it helps if you and your affiliate manager are homies.