One-time vs lifetime commissions

The commission structure you offer shapes which advisors send you referrals, how much effort they put in, and how predictable your cost of sales looks on the P&L. Most programs default to "10% of first-year revenue" without thinking about alternatives. Here's a framework for choosing.

The three shapes

Almost every B2B commission plan is one of three structures.

One-time. A percentage of the first closed deal, paid once. Simple, bounded, predictable.

Fixed-term. A percentage of revenue over a defined window — commonly 12 or 24 months. Bigger total payout, still bounded.

Lifetime. A percentage of revenue for as long as the customer stays. Largest total payout, unbounded.

Each has a right use case.

When one-time works

One-time commissions fit deals with most of the revenue concentrated up front. Implementation services, licenses sold as a one-off, fixed-scope projects. If the customer pays you 80% of their lifetime spend in the first year, a one-time commission on that first deal is close to economically equivalent to lifetime — without the accounting complexity.

They also work when the advisor's real effort is the first introduction. If retaining the customer has nothing to do with the advisor, paying them for retention doesn't buy you anything.

When fixed-term works

Fixed-term (12 or 24 months of revenue) fits subscription businesses where the advisor plausibly influences retention in the early quarters — they pick up on renewal risk, flag expansion opportunities, stay close to the customer during onboarding. If the advisor adds nothing after month 24, cutting the commission off at month 24 aligns cost with value.

Fixed-term is also the least risky way to offer something that looks like lifetime without the open-ended accounting.

When lifetime works

Lifetime commissions fit two situations. One, the advisor is genuinely a long-term partner — they continue to bring expansion, renewal, and cross-sell to the relationship for years. Two, you're in a brutal advisor-recruitment market and lifetime commission is a differentiator you're using on purpose.

Outside those cases, lifetime commissions are usually over-paying. If your customer stays 7 years and pays $1M/year, a 10% lifetime commission hands the advisor $700K on a single introduction. That's fine if the advisor is actively driving that outcome. If they're not, you've committed seven-figure liabilities for work that ended in month three.

Commission percentage

Across all three structures, the industry standard on B2B services referrals is 10% of the revenue in scope. This came from the same economics that priced sales commissions: the advisor is doing the upper-funnel work that would otherwise cost you an SDR team.

If your margin doesn't support 10%, offer 5% and a smaller advisor network. If your margin supports more — e.g., high-margin SaaS — going to 15% or 20% is a recruitment lever. It signals that you value the channel.

Variants and campaigns

Commission plans don't have to be static. A few patterns that work well:

• Campaign bumps. "20% commission on mobile-app projects this quarter." Directs advisor attention to a specific product line.
• Tiered brackets. Higher percentage on larger deals. Rewards advisors who bring enterprise relationships rather than small ones.
• Bonus on retention. Base commission at close, bonus paid at the 12-month anniversary. Aligns advisor with long-term customer health.

Refenture supports all three structures — one-time, fixed-term (any number of months), and lifetime — and lets you run multiple plans simultaneously for different advisors or campaigns.

Quick decision rule

If you're not sure where to start:

• Services or implementation business: one-time, 10% of first contract.
• Subscription/SaaS with predictable retention: fixed-term, 12 months, 10% of recognized revenue.
• Subscription with advisor actively involved long-term: lifetime or 24-month fixed-term, 10%.

Avoid the temptation to get clever in year one. A plan that's simple and generous beats a plan that's elaborate and cheap.