Ask Trnd


How much commissions should I be offering?

So, you’re building your influencer program and your goal is to increase sales and find new customers. You’re off to a great start! Determining the goal of your program is the first step to any great plan and if you’ve decided to enable Trnd to achieve this goal then you’re definitely on the right track. 

But now, you’re curious about how much you should be offering in commissions to be successful.

Commissions are just one incentive for ambassadors and affiliates to stay motivated to share your brand. In fact, they’re a big one! So, offering a commission that is generous and worthwhile is important. It also has to make sense for your company. 

Factors for Choosing the Right Commission 

Choosing the right commission is going to come down to all the costs to acquire a new customer, cost of your product, and costs of your program maintenance. You certainly don’t want to offer a commission that puts you at a loss or disadvantage, which is why the general rule of thumb is to make the commission somewhere between 10-30% of the product’s retail price.

  1. Cost.  We all know that retaining a customer is far less expensive than acquiring a new one. So, when you can leverage influencers and ambassadors to do the new acquisition work for you, well it can be a lot more cost effective! 

Why? You’re not paying to cross your fingers that someone new will see your ad and convert to a paying customer. Instead, you’re leveraging an influencer’s reach to an audience that already trusts what they have to say, and you’re paying only for when they acquire a customer for you. 

A great commission structure is built on what you believe the ambassador or influencer’s network is going to be worth to your brand.  

Understanding your costs is an essential first step to making your influencer program successful, but it’s not the only factor. 

  1. Impact and reach. You also have to calculate the reach and impact your influencer network will have on your business. The best influencer marketing managers know that your social reach is the reach of your brand + the reach of your loyal brand ambassadors, especially if they are sharing consistently.  

Finding the right ambassadors for your brand that will effectively share with their network is another factor to determining the commission you should offer. 

Offering a Commission That Works 

The benefit to having an influencer program that allows ambassadors to go out and spread your brand is that you’re getting a two for one deal. 

Not only are they increasing your brand awareness by sharing about your product via social media and positive testimonials, but also they are landing you new customers! 

The higher the commission rate, the higher the incentive. 

You have opportunities to build a commission plan and test what works to further incentivize your influencers.

When you’re finding people who are fanatical about your product and want to share it, they will absolutely stay loyal if you offer to increase their incentives over time. A great way to get started is to offer no commission, but give them free products every month to use and share with their friends and following. 

Then, consider boosting it up the more they share. If they are consistently getting a few sales for your company each month, then their commission could be set at 15%. 

Consistently over five sales every month? Then, they could earn up to a 30% commission! Plus, they get to choose two to three products for free each month instead of just one. 

This is just one idea for how to tier your commissions and offer more incentives to those that share more often and have more success. But, you can build a loyalty plan that has multiple tiers or just a couple. It’s all about testing what works for your brand. 

Final thoughts

At Trnd, we talk to a lot of brands every day and study the way they think about influencer marketing. When it comes to utilizing Trnd, the very best are incentivizing loyal fans who have a great network of followers and they are doing this through wonderful commissions. 

A commission that makes sense for your company, but can be on the higher end will absolutely encourage someone to work harder for you. There’s a mutual benefit that feels rewarding.

More incentives will lead people to do more. Everyone wants an opportunity to do better or get more free products. These individuals who do more then turn into long term, ultra-fans. 

Ultimately, an influencer program is an opportunity to grow your network. As influencers continue to increase their reach and brand, your company's brand reach is growing in parallel. 

Tiering your commission plan can lead to really strong partnerships that end up lasting for years. When you’re considering how much to pay, put some pen to paper (or clicks to keyboard) and map out your goals, the costs, and the potential return. Then, let that be your baseline to iterate and test.