I'm designing an affiliate program to pay affiliates for referrals. But before going too far, I'd like to know what type of affiliate program people are most likely to want? One-time payment for each referral? Or a smaller recurring payment? There are benefits to both:

One-time Referral payment
- Host can afford to pay more
- Only pays affiliate once
- i.e. Host may pay affiliate a one-time $25.00 referral fee
- Affiliate gets a larger up-front payment

Recurring Referral payments
- Host typically pays a percentage of all payments received by the referral, indefintely.
- i.e. Host may pay affiliate 20% of all invoices generated by the referral (i.e. $5.00 every month).
- Affiliate gets smaller up-front payment, but gets paid every month

So what do you think potential affiliates would prefer?

Thanks :)

Rob.

Personally, from my perspective, I'd perfer a larger one-time payment because there's no guarantees how long a client will stick around, and also trust relationship with the host must be established on these monthly payments. Also, it's a whole lot easier to manage just one large payment than a bunch of small ones.

Thanks for the feedback, webbist101.

As far as the management goes, that's no problem with a program like iDevAffiliate installed.... it practically takes care of itself. But you're right in the sense that you do still have to make the payments to the affiliates :)

I agree with webbist101. People tend to switch hosting companies frequently and hosting companies tend to go out of business or switch methodologies frequently. Most people are also short sighted so even if you could prove that they would make more in the long run, they're generally more concerned about how much they're getting this month ;)

If you go with a small recurring fee, I would recommend that you make sure you are absolutely satisfied with it so that you do not have to change later. You might also want to try getting a small test group of 5-10 affiliates in a beta program before going live to determine any problems.

Remember there's also nothing stopping you from offering both! If you can set up two different affiliate pay systems, you can let your affiliates choose which they prefer.

Last... while I haven't seen any affiliate programs that do the recurring fee, you may want to search for one and send an e-mail to the host and ask them how popular it is. Perhaps they can compare it or explain why they chose to use that method (make sure you're asking as a possible affiliate rather than competitor, of course ;)).

Thanks HostingEnthusiast! Great feedback indeed.

I see the "Larger One-time Payments" is ahead by a slim margin, 3-2. Too small a sample to draw any conclusions from...

I prefer one-time payments as well, if you want a broader group of research find a few companies that offer % and do a search on google for their affiliate tag, then do a search for lunarpage, etc, I'm betting the one time payment hosts are in a lot more top 10.