"What commission should I offer?" gets answered online with folklore — "20-30% is standard." True-ish, useless. The right rate falls out of your unit economics and motion. Here's how to derive it, plus real anchors for sanity-checking.
Derive the ceiling from unit economics
Start from what a referred customer is worth and what else you'd pay to acquire them:
- 1Compute average lifetime revenue: ARPA × expected months retained (use net revenue churn if you have it).
- 2Find blended paid CAC for the same segment — ads, content, outbound, whatever you actually spend.
- 3Set the commission budget at 40–70% of that CAC. Below 40%, affiliates won't prioritize you; above 70%, organic would've been cheaper anyway.
- 4Divide by lifetime revenue → maximum sustainable percentage. Sanity-check against cash timing: recurring commitments weigh on runway even when LTV math approves them.
Market anchors by product shape
| Product type | Typical offer | Notes |
|---|---|---|
| Prosumer tools ($10–50/mo) | 30–40% recurring, often lifetime | Volume play; deal-site friendly |
| B2B self-serve ($50–500/mo) | 20–30% recurring | The 'standard' range people quote |
| High-ACV B2B ($1k+/mo) | 10–15% recurring or fixed $ per close | Absolute dollars already motivate; protect margin |
| Annual-heavy billing | 25–40% of first-year, one-time | Cash arrives once; matching payout timing simplifies everything |
| Freemium/trial-led | $X per activation + smaller rev share | Pays for the hard part (getting users to activate) |
Rate-setting mistakes that kill programs
- Matching the market instead of your math. A competitor's 30% reflects their margins, not yours.
- Ignoring clawback economics. Refunds touch a few percent of referrals; if you pay instantly and recover manually, effective rate inflates and trust decays. Automate reversals (this is table stakes in our engine).
- One rate forever. Mature programs evolve: launch rich, then introduce volume tiers rewarding the partners driving 80% of revenue — tiered and per-affiliate rates exist for exactly this.
- Forgetting taxes and fees. Payout processing and compliance aren't free; factor the platform's true cost (beware % -of-commission software pricing stacking on top).
What partners actually compare
Sophisticated affiliates evaluate EPC (earnings per click), not headline percentage: 20% of a $200/mo product converting at 3% beats 50% of a $19/mo product converting at 0.7%. When recruiting, lead with earnings potential and proof (your funnel conversion, case studies), and treat the rate as one term among cookie window, payout reliability, and asset quality.
Bottom line: derive your ceiling, anchor against the table, start slightly generous, and let per-partner overrides handle exceptions. If platform pricing that scales with your success bothers you, that's why we priced Sentalong flat.
FAQ
What percentage do most SaaS affiliate programs pay?
Common ranges: 20–30% recurring for self-serve B2B tools, 30–50% one-time on first payment for consumer/prosumer SaaS, and 10–20% recurring for higher-ACV products where absolute dollars per referral are already large.
Is a flat-dollar commission ever better than a percentage?
Yes — flat fees per signup suit free-trial or usage-based products where 'revenue' arrives irregularly, and they make partner expectations crystal-clear. Percentage models scale better as accounts grow.
Want the operational layer handled for you?
Sentalong tracks commissions from real billing events, reverses refunds automatically, and pays affiliates on schedule — flat pricing, no cut of your commissions.