Drip commissions

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Who is this article for?

This article will be useful to you if you're a company on PartnerStack looking to use drip commissions to pay partners incrementally, and/or over a specified period of time.

What are drip commissions?

Drip commissions are commissions automatically created in a "scheduled" state as a result of a sign-up or transaction (or specified action). Drip commissions have delays and cycles that enable you to pay a partner after a certain time has passed, or pay a commission out in installments over a specified period of time.

Drip commissions are commonly used to account for customer cancellation periods, and to pay for a high-value transaction being paid out over 12 months instead of all at once.

Drip commissions can help prevent loss to your company in the event the partners' customer cancels their subscription or requests a refund. 

Drip delay length

A drip's delay length is the amount of time the trigger will wait before starting the drip cycle. Delay lengths can be measured in days, weeks, months or years. Delay lengths are commonly used when there is a refund policy/cancellation period.

For example, your company offers a one-month refund period after a product is purchased. With that policy in place, you'll likely want to wait 30 days before creating a commission for your partner for that transaction, in the event that their referral does request a refund. After the 30 days pass if no refund has occurred, your partners' commissions will be generated.

Once a payout is sent to a Partner through PartnerStack, we can't "claw it back". This is a common use case for putting the delay in place!

Drip cycle length

A drip's cycle length is the time between each drip. Cycles can be measured in days, weeks, months or years. If your drip commissions will only have one occurence, you do not need to specify a drip cycle length.

Drip occurences

Drip occurences are the number of commissions that should be created throughout the entire drip period. This is the number of times you would like the specified commission amount issued to the partner.

How cycles and occurences work together

Using drip cycles and occurences allows a commission to be paid out over a certain period of time. This is commonly done when an annualized subscription is purchased upfront, but the customer can cancel part way through their subscription.

For example, your partners' referral purchases a yearly subscription. Instead of paying the partner a commission all at once (in case the referral cancels mid-year), you can use a drip commission to pay the partner out over time. 

For example:

A referral purchases a $1200.00 annual subscription. You, the company, want to pay your partner 20% over 12 months. Paying 20% of $1200.00 would equal a total commission of $240.00. We want to pay this $240 over 12 months = a $20 commission paid out each month, for 12 months.

  • Drip commission amount (flat): $20
  • Drip cycle length: 1 month
  • Drip delay length: 1 month (if we want to delay the first commission generation by 30 days)
  • Drip occurences: 12

The above drip set up would delay commission generation by 30 days, and then pay the partner $20 every 30 days 12 times for a total of $240.

If the referral cancels on month 7, the remaining 5 months will not be paid out and the partner will only earn commissions while the subscription is/was active.

Viewing drip commissions on your dashboard

Ongoing drip commission can be viewed in your Commissions and Invoices > Ongoing drip commissions tab. 

Here you can search for a partner's name to view ongoing drip commissions they have or can filter the table by drip status. 

Drip commission statuses:

Created: The drip commission has been created and there are pending payments to the partner.

Terminated: The drip commission was ended prematurely before the total commission amount was paid to the partner. Drip commissions can be ended: automatically (due to an associated partnership, customer or transaction) being archived; or manually via the dashboard.

Complete: The drip commission total has been paid to the partner.

Creating a drip commission

Triggers are highly customizable and are heavily influenced by the data available through your integrations. Because of this, we highly recommend talking to your customer success expert or the PartnerStack support team before you start creating them yourself.

When creating a trigger select "Generate a drip commission" as the trigger's action. Note, when building a drip commission trigger you will need to calculate the commission amounts you would like paid for each occurance. This is the amount/percentage that should be entered in the commission amount.

Do not set use your desired final commission total as the individual commission amount. 

To calculate what your commission amount should be, divide your desired final commission total by the amount of occurences the drip should have.

i.e. if the partner should earn $300 total over a period of 6 months and you would like to pay the partner each month your commission amount will be $50 with 6 occurences and a cycle length of 1 month.

As you create your trigger, the drip description will update to show you how the drip would behave if an event occured today to trigger the drip.

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