The recurring commission question

If your business generates recurring revenue from subscriptions, retainers, or repeat purchases, you face a choice: pay agents a one time commission when they bring in a customer, or pay an ongoing commission for as long as that customer stays.

Both approaches have merit, and the right choice depends on your business model, margins, and growth stage.

Arguments for recurring commissions

Agent retention. Agents who earn recurring income from your product are far less likely to leave. They have a growing income stream that they do not want to walk away from. This creates loyalty and reduces the constant need to recruit new agents.

Customer quality. When agents earn ongoing commissions, they are incentivised to find customers who will stay. They become more selective about who they sell to, which reduces your churn rate.

Compounding income. As agents build a portfolio of recurring customers, their monthly income grows even without closing new deals. This makes your product increasingly attractive to agents, which improves recruitment over time.

Arguments against recurring commissions

Margin pressure. If you pay 10% recurring commission and a customer stays for 5 years, you have paid 60% of the first year's revenue in total commissions. For businesses with thin margins, this can be unsustainable.

Complexity. Tracking and paying recurring commissions requires robust systems. You need to know which customers are active, which agent brought them in, and how much each agent is owed each month.

Passive agents. Some agents may become complacent once they have built a recurring income base, focusing on maintaining rather than growing.

A balanced approach

Many businesses find a middle ground: a larger one time commission (20% to 30% of first year value) plus a smaller recurring commission (3% to 5% of ongoing revenue). This front loads the incentive to close deals while maintaining ongoing alignment.

If you are using Zepys, the platform tracks recurring commissions automatically, which removes the operational complexity.

When recurring commissions make sense

Recurring commissions are most valuable when customer churn is your biggest business challenge and when your margins can support the ongoing cost. If you have strong margins and high churn, paying agents to bring in sticky customers is a smart investment.

The bottom line

Recurring commissions are a powerful retention and alignment tool, but they need to be structured carefully to remain sustainable. Start with a small trailing percentage and adjust based on the impact on agent retention and customer quality.