How Commission Rate Adjustment Helped AP Client Increase Profitability
AP client wanted to adjust the commission rates paid to their affiliates as a part of their new focus on profitability. To help them accomplish their new goals, the team implemented unique strategies to help the client adjust their commission rates in ways that would also ensure their relationships with publishers remained strong.
Since the AP account team did not have access to most of the metrics required to calculate net margin (as they were generated from client’s internal numbers), the team worked with the client to set up separate reports within the client’s Google Analytics account, which could then be emailed to the AP account team for proper reporting and monitoring moving forward.
“In order to help the client move forward with their new profit focus and net margin goals, we needed to create a net margin calculator so that our AP team and the client could see what net margin was looking like for the affiliate channel,” said Heather Creamer, the AP manager on the client’s account. “This process involved many iterations and conversations with the client to ensure that we had the right calculations in place.”
Once the client understood what changes would need to be made to the program and how those changes might impact the revenue momentum that had been building since the beginning of the year, the team laid out different scenarios for the impact the commission changes might have.
“Using the net margin calculator we created, we put together a few different models for the client so they could see what impact commission changes might have on the different affiliates in their program,” said Creamer. “For example, we had one model that showed both the savings and revenue loss the client might realize if they dropped their commission rate from 15% to 10%, and then another that showed a reduction from 15% to 13%.”
Once the new commission rates were set, the account manager set up a call with affiliates who would be most impacted by the change.
“Communication with affiliates is always important, but even more so when their commission rates are being adjusted. We personally called the top affiliates in the program, explained the client’s new goals and were very transparent with them about why the commission adjustments were needed,” said Creamer. “While it was understandable that they weren’t thrilled about getting paid a lower commission rate, their reaction was respectful and accommodating. They really appreciated being brought into the loop and the fact that we took the time to call them and explain the situation.”
Download the full case study for more detail and to learn how the new commission rates are helping the client reach their new profitability goals.
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