A tiered commission structure motivates affiliates using commission rate tiers. Unlike flat commission plans, tiered commissions encourage your affiliate team to hit sales milestones. As performance increases, your members earn a higher commission rate.
The most basic sales incentive plan awards a flat rate—X% or $X on every deal or per item. Tiered commissions, on the other hand, pay a rate until an affiliate hits a certain total referral order value, total referral order number or total earned commission value. When well-designed, these plans can increase your overall performance, while remaining easy to administer, understand, and communicate.
In short, like many business questions, the answer is it depends. Companies often put tiered commission structures into play when they feel that the flat rate plan is not driving the desired performance. Thus, they opt for a plan where they can specifically reward affiliates who over-perform and, at the same time, motivate "the middle" tier to increase their performance.
In our app, you can build your own auto-tier commission rule easily with three main types of conditions. Your affiliates will get automatically leveled up once their performances meet the level condition set, the conditions could be based on:
Total referral order value (total value of sales your affiliate refers successfully, only sales with approved commission are counted)
Total referral order number (total number of sales your affiliate refers successfully, only sales with approved commission are counted)
Total earned commission value (total value of approved commission your affiliate gets)
To set the conditions, go to Program tab on the left menu, click on Auto-tier commission:
Click Active to enable the Auto-tier commission feature, then choose one of three conditions, then set the program and its condition value accordingly.
One program can be set with one level only;
The condition value of higher-level must be higher than that of the lower level;
The maximum number of levels you can set is the number of Active programs you are having in your account.
You can choose the Level condition to be Total referral order value
There are 3 programs available in the account, you can set the condition as below:
In this setting:
Affiliates who have less than 500$ in total referral sales (only sales of approved commission count) will be on Program 1.
Those who reach 500$ in total sales will be moved automatically to Program 2.
And once they get 1000$ in total, they will jump to Program 3.
Once a program is deactivated or deleted, its level condition on the auto-tier commission setting will be deleted as well.