Affiliate marketing: Payment issues turn off clients

Nearly 41% of affiliates have stopped working with an affiliate network because of a payment issue, according to new research.

The study. from Tipalti, found that of those who did not already end a relationship with an affiliate network, 65% say they would stop working with a network because of consistent payment problems.

The survey of over 250 global affiliate partners on their satisfaction with the state of affiliate commission payments identifies gaps in satisfaction between U.S.-based affiliates and those outside of the United States.

This study exposed several key affiliate payment insights, including the need for greater communication with affiliates, the high level of retention risk affiliate network programs face with unsatisfied affiliates due to payment issues, and a clear gap between U.S.-based affiliates and those in the global space.
Among other noteworthy findings, the study identified that nearly 41% of affiliates have stopped working with an affiliate network because of a payment issue. Of those who did not already end a relationship with an affiliate network, 65% say they would stop working with a network because of consistent payment problems.

The Importance of Payments to Affiliates

According to the research, affiliate network managers should take notice that payments are immensely important to their affiliates and that it can drive their loyalty or attrition. Nearly all affiliates surveyed agreed that:

• Being paid on time is important (99.5%)

• They expect an ability to verify payment status online (99.5%) and to be automatically notified when payment issues arise (98.1%).

• They appreciate a broad choice of payment methods (93.6%) as well as being able to get paid when certain threshold numbers are met (90.1%).

• Consistent payment issues cause significant frustration and can cause them to drop out of a network or program (65%).

The Chasm Between Global Affiliates Versus U.S.-Based Affiliates

Both U.S. (52%) and non-U.S. (41%) affiliates have experienced late payments, but global affiliates also have issues with payments never arriving at all. 34.8% of non-U.S. affiliates have had a situation where they did not receive payment compared to 13% of U.S. affiliates. The survey also identified distinct differences between U.S.-based affiliates and those in other countries.

For example:

• While U.S.-based affiliates prefer PayPal and ACH, global affiliates prefer PayPal and wire transfers (and show a greater willingness to pay for transfer fees). Echeck /International ACH was the third most popular payment method for global affiliates.

• 66% of global affiliates want to be paid in local currency.

• While 61% of U.S. affiliates say their networks collect W-9 tax ID information, the answer is not as clear for global affiliates where nearly 68% say that W-8 collection is either not happening or they don’t know.

• The overall satisfaction levels vary greatly between U.S. and global affiliates with the non-U.S. affiliates having a more negative perception of their payment experience. While only 9% of US affiliates say payments need improvement, nearly 20% of non-U.S. affiliates say payment operations need improvement.

“Affiliate networks need to consider the influence their global affiliate partners have on their ongoing business success and how their commission payments processes are impacting their ability to recruit and retain the best affiliate marketers.” said Chen Amit, CEO and co-founder of Tipalti. “Programs that employ operational best-payment practices, such as improving affiliate on-boarding, offering affiliates a secure portal to check their payment status 24 / 7, immediately notifying affiliates about payment progress or issues, and providing a range of payment methods and currency choices, will ultimately achieve greater network success and stability.”

The “Global Affiliate Networks Payment Satisfaction Report” survey, conducted by Tipalti in June and July of 2015 polled participants from multiple social networks (including LinkedIn) and the AffiliateFix forum. More than 250 people responded and the global mix of respondents included 69% non-U.S.-based affiliates. Affiliates varied in size ranging from smaller (those generating compensation under $10,000 a year) – 63% – to larger affiliates (those that had affiliate compensation of over $200,000).

The detailed report can be accessed here.