Affiliate Tiers Demystified

In a multi-tier affiliate program, the affiliates are related with each other among two or more levels. The level zero or first tier is the same as in a regular affiliate program. The difference in a multi-tier program stems from the additional tiers – marketers also earn a commission on sales generated by other participants that they referred to the program.

Affiliate tiers is one of the most powerful features of the Affiliates Enterprise plugin for WordPress. Tiers allow you to create networks of affiliates, where new affiliates are assigned to their referring affiliate. In terms of referrals, they will also grant tiered commissions to their referring affiliate. An affiliate can have more than one network of affiliates, without any restrictions regarding the dimensions or the number of affiliates.

In a multi-tier affiliate program, the affiliates are related with each other among two or more levels. The level zero or first tier is the same as in a regular affiliate program. The difference in a multi-tier program stems from the additional tiers – marketers also earn a commission on sales generated by other participants that they referred to the program.

Multi-level Marketing or Pyramid Scheme?

While you read about multiple levels in what follows, the image of a pyramid or inverted pyramid may come to mind. And you may very likely be familiar with the infamous denomination of a Pyramid Scheme. If you were looking for that, then we’re sorry but this post won’t explain how to set that up 😉

So what’s the difference? Pyramid schemes serve a disgraceful purpose – the entire purpose of a pyramid scheme is to deceive people, to get your money and use you to recruit more unfortunate victims. MLM or Multi-Level-Marketing has little to nothing to do with that, MLM is used to promote a legitimate business that offers real products or services which provide genuine value to its customers. And that’s what this post is about.

Original Referrer – OR

Original Referrer – abbreviated as OR – is the affiliate who refers a new lead, a new customer or a transaction as for example a purchase order. This referral in turn, can produce tier referrals. The meaning of OR is abstract, because we don’t set a particular affiliate to be OR. Each time a referral is recorded, the OR is the affiliate involved in that referral.

For example: Affiliate A refers a new sale – Affiliate A is the OR here. A referral is recorded and a commission is granted. If Affiliate A has been referred by another affiliate, Affiliate B, a tiered commission will be granted to Affiliate B.

Referrals vs Tiered Referrals

Referrals can occur whenever an action takes place on the site running the affiliate program. A referral can occur because of a referred sale, booking, form submission etc.

On the other hand, Tiered Referrals may occur only whenever there is a Referral recorded on the same site.

Levels

Affiliates Enterprise supports an unlimited number of Levels of Tiers*. Basically, this means that our system can grant unlimited tiered commissions per referral. Whenever the OR records a referral, referring affiliates in all levels can benefit with a tiered commission.

* A soft limit of 111 levels is imposed unless the AFF_ENT_UNLIMITED constant is defined.

Level Commissions

Level Commissions are determined by the OR and the level rates we have set. In order to define a level rate we should do the following based on the commissions tool we use. There are two options for this:

  • Rates system – all the commissions are set in one place, under Affiliates > Rates.
  • Legacy system – each commission is set individually depending on the feature or integration we are setting up. This system is still supported by Affiliates Pro and Enterprise for backwards compatibility.

Using Rates

  1. Go to Affiliates > Rates and add a new rate. Select Rate and set a Value.
  2. For the Level field, choose the level number.
  3. Click the Create button.

Repeat this process for all the Levels you plan to use on your system. The result in Rates table should be like this:

Level rates

Example of Level rates

Further information on using rates is available on the Rates documentation page for Affiliates Enterprise.

Using the Legacy System

  1. Go to Affiliates > Tiers and under Level Rates section set a rate per level.
  2. Click on the Save button.
Example of legacy Tier rates

Example of legacy Tier rates

How does each Level Rate apply

Regardless of which system we decide to use, the process is the same. Whenever a referral is recorded, the referrer of OR will get a tiered commission based on the rate at Level 1, the referrer of the referrer will get a tiered commission based on the rate at Level 2, etc. As I mentioned, the meaning of OR is abstract but it determines how the system calculates the levels.

In your system under Affiliates > Referrals you will notice something like this:

Example of a Referral and tiered referrals

Example of a Referral and tiered referrals

Let’s see some more details to explain the flow that takes place in the background.

Example 1:

Assume that we have set rates for Level 1 and Level 2 and there are the following relations between our affiliates.

  • Affiliate A has referred Affiliate B.
  • Affiliate B has referred Affiliate C.
  • Affiliate C refers a new sale.

The new sale will result in the following:

  1. Affiliate C is considered the OR and gets a referral and commission because of the new sale.
  2. Affiliate B will get a tiered commission based on the rate set for Level 1, as the referrer of Affiliate C.
  3. Affiliate A will get a tiered commission based on the rate set for Level 2, as the referrer of Affiliate B.

 

Example 2:

Assume that we have set rates for Level 1 and Level 2 and there are the following relations between our affiliates.

  • Affiliate A has referred Affiliate B.
  • Affiliate B has referred Affiliate C.
  • Affiliate C has referred Affiliate D.
  • Affiliate D refers a new sale.

The new sale will result in the following:

  1. Affiliate D is considered the OR and gets a referral and commission because of the new sale.
  2. Affiliate C will get a tiered commission based on the rate set for Level 1, as the referrer of Affiliate D.
  3. Affiliate B will get a tiered commission based on the rate set for Level 2, as the referrer of Affiliate C.

Please note that in this case Affiliate A will not get a tiered commission, because we have set rates for two Levels of tiers. The same would happen if we had set the number of Levels to 2 under Affiliates > Tiers.

Relations between Affiliates

The relations for an affiliate can be seen in the Dashboard if we visit Affiliates > Manage Affiliates and click Edit. There is a section called Tiers that displays the Referrer and Referred affiliates.

The Referrer will show the name of the affiliate who has referred the affiliate we currently edit. If not set, then the affiliate has no referrer.

The Referred affiliates will show the complete tree of affiliates referred by the affiliate we currently edit. If nothing shows up, then the affiliate hasn’t referred any other affiliate(s) yet.

Example:

  • Affiliate A has referred Affiliate B
  • Affiliate B has referred Affiliate C
  • Affiliate C has referred Affiliate D

If we choose to edit Affiliate B:

Affiliates relations overview

  • Affiliate A will be the Referrer.
  • Affiliate C will be under Depth 1.
  • Affiliate D will be under Depth 2.

To conclude

The features around tiers that are built into Affiliates Enterprise are powerful yet easy-to-use tools, that will help you expand your appearance on the internet even more. Once you fully comprehend the basic concept, setting up an affiliate network will become an ordinary task.

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