For affiliates
Recurring commission: how to work out what a programme is actually worth
Every comparison article ranks affiliate programmes by their headline percentage. It is the least predictive number in the whole deal. Here is the arithmetic that decides what lands in your account, including the case where our own programme comes second.
One customer, four structures
The same referral, on a €50 per month subscription, under four commission structures you will actually be offered. Rounded, and excluding tax, which is how commission is normally calculated.
| Structure | After 1 year | After 3 years |
|---|---|---|
| 30% of the first payment only Common on one-off and lifetime-deal products | €15 | €15 |
| 10% recurring, first 12 months Stops on the anniversary, however long they stay | €60 | €60 |
| 20% recurring, first 12 months Double the rate, same cut-off | €120 | €120 |
| 20% recurring, for as long as they stay The same 20% keeps compounding | €120 | €360 |
Read the last two rows next to each other. Same percentage, same customer, and one pays six times the other. Nothing about the rate explains that, only the duration does.
It also explains why the 30% offer at the top finishes last. A percentage of one payment is a percentage of one payment, however large the percentage is.
Doing it for your own audience
Monthly price, times the commission rate, times the smaller of two numbers: the month limit in the terms, and how long you honestly believe your referrals will stay subscribed.
That second number is the one people leave out, and it is usually the one that decides the answer. An audience of hobbyists who cancel in month three makes a lifetime programme worth no more than a twelve-month one. An audience of businesses that keep the tool for years makes the lifetime programme worth several times as much.
Which is the real question behind picking a programme: not which pays most, but which pays most for the people you can actually reach.
Six things to check in the terms
Roughly in the order that they affect your income.
Does it stop, and when
The single most important line in the terms, and the one most often buried. Look for a month count. If there is none, check whether that means lifetime or simply that they have not decided.
What happens on upgrades
If your referral doubles their plan, does your commission double with it? On a growing account that difference is larger than the rate.
Is tax included in the base
Commission on the amount excluding VAT is normal and correct. Commission quietly calculated on some other base is worth asking about before you promote anything.
How long money is held
Most programmes hold commission for a period so refunds can be deducted first. That is reasonable. A hold with no stated length is not.
What the attribution window is
Business software is a slow decision. A 30-day cookie really does lose sales that a 60 or 90-day cookie keeps, and on consumer products it barely matters at all.
Whether existing customers count
Almost no programme pays for a customer who was already theirs. Worth knowing before you spend effort on an audience that already uses the product.
Where ours sits on that table
Row three, roughly. Ovellan pays 10% to 30% recurring depending on your rank, for the first 12 months of each customer. So on the arithmetic above, a programme that pays for the lifetime of the customer will out-earn us on any referral that stays for years.
We would rather write that down than let you work it out afterwards. If your audience produces customers who stay for years and the total is all you care about, pick a lifetime programme.
Where ours is worth a look: the rate climbs with the number of your referrals who are actively paying, and the rate you reach stays fixed on the customers you already brought in, so a rank change can never claw anything back. From the third rank there is a discount on your own subscription as well. Attribution runs 60 days, which suits a slow business decision, and payouts are monthly in euros.
We are also new, so there is no conversion data to show you yet. That is a fair reason to wait, and worth saying out loud.
Questions
What does recurring commission mean?
You are paid a percentage of every payment the customer makes, not just the first one. On a subscription product that is the difference between being paid once and being paid every month, which is why it dominates any comparison of headline percentages.
Is a higher percentage always better?
No, and the arithmetic above shows why. A programme paying 20% for as long as the customer stays beats one paying 30% for twelve months as soon as that customer passes roughly two years. Work out the duration before you compare the rates.
How do I estimate what I will actually earn?
Take the monthly price, multiply by the commission rate, then by the smaller of two numbers: the programme's month limit, and how many months you honestly think your referrals will stay. The second number is the one people skip, and it is usually the one that decides the result.
Do I need an audience to join one?
Not always. Some programmes, ours included, accept consultants and agencies who recommend tools to clients directly, because a recommendation inside a project converts better than a banner does. Others require a website or a minimum reach, so check the application form before you invest time.
Comparing chatbot programmes specifically? That comparison is here.
See the ovellan programme