Compensation Trends in Referral Marketing: Fair Rewards for Real Work

Posted by Diana Faye Cichon / September 6, 2024

In the past, referral marketing have faced criticism due to compensation models that favored those at the top, often leaving the people who actually made the sales with a smaller cut. This has contributed to the negative perception of the industry, particularly with narratives about “pyramid” schemes.

Fortunately, today’s compensation trends are moving in a positive direction, with more businesses adopting fairer and more transparent systems.

Paying for Performance: Who Really Earns the Commission?

One of the biggest shifts in referral marketing compensation is the focus on directly rewarding the person who made the sale. Regardless of the price the customer pays, whether it’s a one-time purchase or a subscription, the promoter who drives the sale is now more likely to be compensated fairly.
In older commission structures, when customers signed up for subscription pricing, salespeople often lost out on retail commissions. But this practice is disappearing as companies now see the value in retaining promoters by paying them for their efforts, even when a customer subscribes.
This new trend has been especially appealing to influencers and affiliate marketers from social media platforms like Instagram, YouTube, and Facebook. With fairer compensation models, referral marketing companies can attract and retain influencers who are more likely to promote products to their audiences.

Incentivizing More Than Just Sales

Modern referral marketing compensation plans aren’t just about sales anymore. Companies are increasingly rewarding behaviors that lead to sales, driving long-term success for both the promoters and the business.
These behaviors include hosting webinars, achieving daily goals, and completing smaller tasks that build relationships with potential customers. Many companies now run weekly contests, offering bonuses to the top salespeople based on their activity. For example, the salespeople who invite the most prospects to webinars or those who maintain streaks of hitting their daily goals are rewarded for their consistent effort.

The rise of sophisticated marketing platforms and predictive apps has enabled businesses to track these actions. By monitoring the behaviors of their members, companies can reward consistent performers, not just those who make the final sale. This shift helps create a culture where small, meaningful actions are recognized and incentivized.

NaXum’s Multi-Channel Compensation

NaXum is leading the way in this evolution by offering a platform that enables companies to manage multiple compensation models in one place. The NaXum Platform allows businesses to reward not only direct-to-consumer sales but also direct-to-business and certified reseller channels. It ensures that both the promoters and the companies can grow without needing separate systems for different channels.

By utilizing NaXum’s predictive apps, businesses can track and reward behaviors that lead to success, ensuring fair compensation for everyone involved. Whether it’s rewarding a customer referral, an affiliate sale, or a business-to-business transaction, NaXum makes it easy for companies to manage their referral marketing efforts in a single system.

Conclusion

Compensation models are evolving to ensure that the people doing the real work get paid fairly, and businesses are now rewarding behaviors that build long-term success. This trend is transforming the industry and attracting influencers and marketers looking for a more transparent and rewarding system.

Schedule a discovery today and see how the NaXum Platform can help you manage your referral marketing compensation and boost your business.