Marketing · Marketing Strategy

Brand Ambassadors -- What is a fair compensation?

Peter Crane Managing Director at Remington Capital

September 30th, 2016

What is a fair revenue sharing plan (what % of net sales over what period of time)? What is a fair range of equity to offer (vesting over what period of time)? This is for a consumer (beauty) product. Any sample agreements around this would be much appreciated. Thanks in advance!

Paul Lemley Marketer looking for a technical cofounder.

December 24th, 2016

Hi Peter. Hope I'm not too late to the party here. I read the previous answers and wanted to suggest a different model as in my experience, 'affiliate marketing' can become a time consuming effort with little return or affiliate retention. It sounds like you're looking for consistent Brand Ambassadors that can (1) grow with your brand and (2) your brand can grow with their social reach. The best way to enable this sort of growth is to spoil your Brand Ambassadors as early and as often as possible. They're not going to 'want' to put in the early leg work if they're time isn't compensated properly and the brand isn't helping them build their own traction. I recommend being as helpful and open with them. Explain your vision and hope for them as ambassadors, use their feedback and ideas, and make it as easy as possible for them to share your product/brand message and imagery. Sales often don't come hard and fast for affiliates, so only giving them a percentage of each sale tracked from their efforts is an easy way to make them uninterested. Hope this helps!

John Mousseau Proven Management & Marketing Consultant | I Focus on My Passions So You Can Focus on Yours.

October 1st, 2016

Hi Peter. From my experience having worked in the experiential/event marketing industry on the client and agency side for 20+ years, using brand ambassadors to help generate awareness for your brand can be a smart tactic if done right.  BA's are an extension of your brand so selecting so who they are and paying them accordingly is critical.  In my experience, you get what you pay for so offering BA's a revenue share only plan is a risky proposition that I wouldn't recommend.  It could work if you know the BA's personally and they are willing to take the risk with you because of a prior relationship.  If not, I think getting committed BA's will be a challenge.   I'd be happy to talk to your more about this to let me know and we can arrange to talk.

Matthew Brown Advisor, Contractor, Seeker of Truth

September 30th, 2016

Hello Peter, This comes down to your individual business plan, how much overhead does it take to run your company & what sort of marketing budget do you have? You can not just ask, what is fair, without deciding what is first fair for you, what sort of ROI are you looking for here? Do you have previous CPA information that you've run? Just because an influencer has 1,000,000 subcribers, does not make them more valuable than someone with 100,000 subs. the niche & audience engagements are very important as well. When it comes to numbers i've seen, I typically see a 15 - 30% rev-split, now where this revenue is coming from, being gross or net, I do not know, that's up to you to decide. My rule of thumb is, a safety precaution if you will, just estimate that the Influencer will have an average conversion range of 0.3% - 3% then push forward. Good luck! , Matthew Brown

Aleksey Klempner

September 30th, 2016

I would just give them a promo code where they earn $$ per sale. How much would depend on your unit economics and CPA. No equity. ICA and W-9 should be used so you can report on their earnings EOY. 

Leslie Wolfe Founder - ...

October 1st, 2016

Basically, your making people an affiliate. Any sales they refer is "found money." Get as many as you can ...

Armin Ghojehvand, ACA Amibtious ACA with a health subscription business

December 26th, 2016

Hi, I'm with Alex down below - I have 8 brand ambassadors for my health subscription business and they are all on a commission basis. For every 5 customers they sign up they receive a set payment. They also each receive a free subscription. I find this aligns both our goals nicely.