If new affiliates refers an affiliate to a program and make money in the future, that’s where a 2 tier affiliate program comes into play.
Affiliates are getting cleverer by the day. So these days, affiliates know the difference between the different types of traffic they can get paid for. There are a lot of definitions though – CPM, CPC, CPA, CPL, CPD and many more.
CPC is clicks, where the publisher (or email marketer and other marketers) gets paid every time a banner or text link is clicked upon.
CPM is impressions, when the publisher (the website owner) gets paid every time a banner is shown.
The other ways of getting paid are grouped together under the term performance marketing – and this is where the term affiliate is most commonly used as well.
An affiliate is a marketer who sends visitors to another site using a variety of methods (such as placing banners or text links on their own site, buying sponsored listings on search engines, email marketing and many other different methods) and gets paid when an action happens. This action can be a lead (CPL stands for Cost per Lead), a Sale (CPS stands for Cost per Sale), a download (CPD stands for Cost per download) and many other variations.
Some in the Internet industry refer to performance based marketing as CPA (cost per acquisition), although the term is also sometimes used for specific types of campaigns such as leads or sales.
Now that we’ve got over the hard part, the rest is easy to understand.
The affiliate gets paid for sending visitors to a specific landing page where an action happens – a lead, a sale, a download or some other sort of action that the advertiser requires. As an example, some advertisers are looking to build up their databases, so they pay for each opt in email address they receive, others want leads from specific locations, so they pay for zip codes, and then try convince the visitors after they fill in their zip code, to fill in a more detailed lead form.
The common denominator is that the affiliate gets paid when an action happens.
A 2 Tier affiliate program is simply finding new marketers to sign up under you to do EXACTLY what you are doing – sending visitors to different offers and getting paid when the visitors perform some sort of action. So why would you want other marketers to sign up under you to promote the same offers? Simple – you get paid a percentage of the amount the affiliate you refer gets paid? Sounds complicated?
Don’t worry; it’s not hard to understand. As an example, say John promotes 5 different offers on a single affiliate network. He gets paid for every lead, sale, email and zip code he generates from these different offers. John now tells Mark about the Network and gets Mark to sign up using a banner or text link that has John’s referral code built into it. Mark now signs up to the Affiliate Network under John and starts promoting various offers and advertisers from the Affiliate Network. These offers DON’T have to be the same offers that John is promoting. Mark can promote ANY of the offers on the Affiliate Network.
And this is the best part…
For any amounts that Mark gets paid, John receives a percentage of the amount over and above what Mark gets paid. So if Mark gets paid $1000 in Month 1, and the 2 Tier Affiliate program is paying 5%, then John would receive $50 just for referring Mark.
But it gets even better…
Some 2 Tier Affiliate Networks pay LIFETIME commissions. So John wouldn’t get a referral commission just for a month or a year – he receives it FOR ALL TIME.
If Mark becomes a super affiliate and starts generating HUGE commissions every month, John can just sit back and collect the checks as he referred him.
There are 3 important things to know when finding affiliates to sign up under you on 2 Tier Affiliate Programs:
Is the affiliate program or affiliate network credible, has proper tracking so your referrals are correctly tracked, has good campaigns and offers for the affiliates to promote so they actually do make money, and do they pay timeously? Assuming that the affiliate program or network is good, what percentage do they pay you on amounts that your referrals get paid? All programs vary so compare different programs to see what the industry standard is.
How long do you continue receiving referral commissions for? Some pay for a month, some for the lifetime, and of course there are many variations in between.
So do your homework and find a 2 Tier program that can make you money long in the future for the work you’re doing today.