Scale · Partner / Referral Programs

Design Partner Commission Structures

Design a partner commission structure that motivates quality referrals without eating your margin.

foundermanagerAdvanced⏱ 6-10 hours
When to use
Use before publishing your partner agreement. Most agencies pick a commission rate by guess, then either bleed margin or lose partners. Run this when you have at least 6 months of [SERVICES] gross margin data so the model is anchored in reality, not aspiration.
The prompt
You are a partnerships lead at a digital marketing agency who has built a referral channel that drives 30%+ of pipeline. You understand agency unit economics: gross margin, payback, churn, and how commission interacts with all three.
Agency: [AGENCY_NAME] — [SERVICES] | Avg deal: [AVG_DEAL_SIZE] | Gross margin %: [GROSS_MARGIN_PCT] | Avg client tenure: [AVG_TENURE_MONTHS] | Partner type: [PARTNER_TYPE] | Commission basis option: [COMMISSION_BASIS] | Competing program rates partners see: [COMPETITIVE_RATES]
Design a commission structure with: (1) recommended base rate and rationale (showing margin math), (2) commission basis (first-year vs. recurring vs. one-time vs. hybrid) with trade-offs, (3) tier mechanics (what earns tier-up, what triggers tier-down), (4) clawback rules for early churn, (5) payout terms (timing, currency, minimum threshold), and (6) edge cases (multi-partner attribution, partner becomes client, partner leaves their firm).

- Show the actual margin math — don't just suggest a rate
- Tiers must be EARNED on volume + quality, not vibes
- No commission structure that incentivizes sending unqualified leads
- Clawbacks must be fair to the partner (no clawback for client-caused churn)
- Must not violate any reasonable client contract or kickback disclosure rules

Markdown doc with a commission summary table at the top, then sections 1-6. Include one worked example using [AVG_DEAL_SIZE] showing exactly what a partner earns on a typical deal across 12 months.
Variables
  • [AGENCY_NAME] — Your agency's name
  • [SERVICES] — Service lines being commissioned
  • [AVG_DEAL_SIZE] — Average annual contract value
  • [GROSS_MARGIN_PCT] — Gross margin % on the service
  • [AVG_TENURE_MONTHS] — Average client lifetime in months
  • [PARTNER_TYPE] — Partner segment being commissioned
  • [COMMISSION_BASIS] — Your preferred basis (first-year, recurring, one-time)
  • [COMPETITIVE_RATES] — What other agencies/programs pay partners like these
Example input
AGENCY_NAME: Northbeam | SERVICES: SEO + content retainer | AVG_DEAL_SIZE: $72k ACV | GROSS_MARGIN_PCT: 55% | AVG_TENURE_MONTHS: 22 | PARTNER_TYPE: HubSpot Diamond partners | COMMISSION_BASIS: First-year collected revenue | COMPETITIVE_RATES: HubSpot pays 20% Y1, most SEO agencies pay 10-15%
Example output
## Commission Structure — Summary
| Tier | Qualifying Intros (TTM) | Rate | Basis | Payout |
|---|---|---|---|---|
| Bronze | 1-3 closed | 12% | Y1 collected | Quarterly |
| Silver | 4-7 closed | 15% | Y1 collected | Quarterly |
| Gold | 8+ closed | 18% + co-marketing | Y1 collected | Monthly |

### Margin Math on $72k Deal (Silver, 15%)
- Revenue Y1: $72,000 | COGS: $32,400 | GM: $39,600
- Commission: $10,800 | Net GM: $28,800 (40%)
- Still hits payback at month 6

### Clawback
- 100% if churn 180 days OR client-caused

### Edge Case: Multi-Partner
First partner with documented intro wins. Second partner gets 5% "influence" if they materially helped close.
Pro tips
  • Model the worst case — what if 50% of deals churn at month 4? If you go negative, your clawback or rate is wrong
  • Recurring commission >12 months sounds generous but kills program economics by month 18 — cap it
  • Pay commission on collected, not booked, revenue — protects you from non-pay
Works with
ClaudeChatGPTGemini
Done with prompts? Time to install the system
Book a STAOS call
Related prompts