Western Governors University (WGU) MGMT6020 C215 Operations Management Practice Exam

The affiliate revenue model is designed for companies to generate income by earning commissions based on performance. In this model, businesses partner with other companies or affiliates to promote their products or services. The affiliates earn a fee or percentage of sales generated from customers they refer through their marketing efforts, which demonstrates the performance-based incentive aspect of this model.

This approach aligns the financial success of the affiliates with the success of the businesses they promote, effectively incentivizing them to drive traffic and conversions. The more they sell or lead customers to the business, the more they earn, which is a key characteristic of performance-based revenue generation.

In contrast, the other models, such as subscription, freemium, and transactional revenue models, do not primarily focus on performance incentives in the same way, as they may rely on fixed fees, free access with paid upgrades, or single transaction fees instead of commissions based on performance outcomes.