Knowing the difference between traditional affiliate marketing and high-ticket affiliate marketing can drastically increase your income.
One of the disadvantages of traditional affiliate marketing is that you only get paid on front-end sales. Front-end sales are usually low-ticket items.
For example, if you refer a customer and they buy a $100 product, depending on which site you sent them to, your commissions will be anywhere from 2-50%. In rare cases, some programs will offer you more on front-end sales, but for the sake of this example let’s go by what the majority of programs offer, which is usually 2-50%. This would translate to $2-$50 in commission.
When you start marketing online, you’ll quickly realize that it actually costs money to drive traffic to your pages. You’ll have to either pay money to advertise or pay with your time by creating content to attract visitors to your offers. Making low-ticket commissions isn’t going to cut it for you unless you’re selling in huge volumes.
So you need to promote high-ticket products to get bigger commissions. For example, if you’re referring your customers to a product that costs $9,997 and you’re getting 33% commissions, then you’ll get paid $3,300 if a sale takes place. Nice!
Higher commissions mean you don’t need as many sales to make a comfortable income from your business each month.
Companies that use this business model have been around for a while, but hardly any affiliates know about them because high-ticket product offers are not listed on affiliate network sites. For most, you literally have to be invited into their private affiliate program or stumble across them accidentally.
In many cases they’ll also expect you to pick up the phone and make the sale yourself, as very few people will buy a high-ticket program in the $1,000 – $100,000+ range online. These high-end types of sales usually have a longer sales cycle and will involve some human interaction.
Who is High-Ticket Affiliate Marketing For?
When you hear of super affiliates making millions of dollars online, chances are they’re tapping into the high-ticket affiliate marketing model.
Some companies are starting to expand and offer high-ticket programs to their affiliates and also offer access to dedicated sales teams. All the affiliate has to do in this case is send traffic to a low ticket item, like a $29 product, and then the phone sales team of the company will follow up with the customers and offer them many other solutions that cost anywhere from $97 to $50,000 and much more. When a sale takes place, the affiliate will get a commission on the sale no matter what the customer buys in the future.
That can easily translate to thousands of dollars in commissions per sale! All for sending leads to a low ticket offer of just $29.
Of course not everyone will buy subsequent products, but chances are if someone is interested in the front-end product from a company, they’ll also be interested in other products in the same category… if not now, maybe in the future.
Having multiple solutions with progressively increased prices and benefits is often referred to as a Tiered Product Mix.
Why You Need A Tiered Product Mix
Think of Apple. People who bought the iPod when it first came out soon found a need to change their phones to an iPhone. They might even decide to switch from a PC to a Mac. Why? Because they had a chance to test a lower ticket item from Apple and liked the quality. Now it’s easier for them to come back and check out what else Apple has to offer. The fact that the products work seamlessly with each other makes it even more tempting for them to always buy from the same company.
This is the power of building a long-term relationship with a customer; something high-ticket affiliate marketing can offer you.
To tap into high-ticket affiliate marketing programs, you might have to pay a membership fee or a licensing agreement with a vendor. In return for your investment and dedication to their products, they’ll unlock your access to high-ticket commissions. Otherwise they are really under no obligation to share the commissions with you.
How To Succeed With High Ticket Affiliate Marketing
To succeed with affiliate marketing and make a business-level income rather than earning like a commissioned sales person, you’ll need a few things:
- Build your own email list of followers and customers, and build a strong relationship with them.
- Tap into monthly membership programs that pay out reoccurring commissions.
- Tap into high-ticket affiliate marketing programs that tag a customer to you for life. When “your” tagged customer buys something from the same company in the future, you’ll continue to earn commissions on the sales.
All three items above require that you invest in an email automation system and learn how to generate leads and build a relationship with them. They also require that you join the programs you want to promote or pay membership fees that allows you tap into the reoccurring and higher commissions. Otherwise the companies really have no obligation to pay you for any repeat or subsequent sales.
Is This a Scam?
The unexpected costs of High-Ticket Affiliate Marketing programs are why some people start flagging them as scams, and begin to question why they should be active members in order to receive the back-end and reoccurring commissions.
But think about it. If you used a car salesman to help you with a car purchase and they got a commission on the sale, does that mean that they should get commissions on any future cars you buy even if they were not working for that dealership anymore? Of course not! But if they were still working at the same dealership and you visited that location several years down the line and bought another car from them, then they’ll get the commission.
It’s the same online. These companies are sharing the repeat and reoccurring commissions with you as a reward for your loyalty to their company by keeping your membership active. They’re under no legal obligation to pay you any future commissions. They are using this setup as an incentive to keep you as a member and encourage you to recommend their products and services to new clients.
Passive and Residual Income
If you have your own products that you want affiliates to promote on your behalf, you’ll also have to start thinking of ways to incentivize them to keep promoting, or they won’t. Paying affiliates a portion of the commissions for sales they generate is more cost effective than paying for advertising and other promotional methods that might or might not bring in sales.
High-ticket affiliate marketing can also be a great source of passive and residual income.
Some programs also give you a percentage of the sales of anyone you sign up under their program. For example, I represent an education company that offers high-ticket affiliate marketing and 5% residual commissions on second–tier sales. This means that I get 5% commissions on any sales generated by affiliates that signed up to the program under my account. And in turn, they get 5% commissions on any sales generated by those that sign up under their account.
This incentive is in place to encourage affiliates to mentor and coach anyone they sign up under their account.
Because if you sign up someone under your account, it’s in your best interest that they succeed and do well. As they get results, you’ll receive 5% residual income with no effort or additional cost on your part.
Not every one will want to sign up for the affiliate program. Most students purchase the programs for educational purposes. Once they learn about the benefits of high-ticket affiliate marketing and realize that very few companies offer that income model, they decide to add this option as one of their streams of income.
When done right, affiliate marketing can be a great addition to your multiple streams of online income.