Remember my Puma Affiliate Program Manager Doesn’t Get It post on 1/7/2011? Well, checking my affiliate account’s email box today I’ve found a follow-up message which reads as follows (highlighting mine):

At first, when I just started reading it, I thought: “Awesome!! They finally get it!”… but as I read on, I realized that they didn’t.

Looking at things in light of the previous email, the affiliate manager’s above message essentially says:

• That prior note “was sent to you in error”
• We apologize “for this oversight”
• We meant to “to provide you with additional resources and opportunities to drive transactions and optimize your relationship with PUMA”
• We wanted to receive “insight” which “helps us to prioritize program updates and ensure that we create a more productive affiliate program”

The last sentence is highly confusing, but some bits of their text do leave room for hope. The affiliate manager seems to understand what they need to do — motivate affiliates by providing them with “additional resources” and stimulate them by “opportunities” (not threats).

However, the above text is only half-okay. There isn’t a word about the previous removal threat, and neither is there any guarantee that it won’t happen in the future. Affiliates are just being told that “based upon your approval date” into the program “this communication was sent to you in error.” Additionally, that last sentence is highly confusing, and reads as if being entirely out of place.

In my opinion, there is one main lesson for every affiliate manager to learn here: when an error has been committed (as is obvious in the Puma case) you want correct it, and do it in a way that leaves no further open questions.

Affiliates of Puma.com who haven’t generated a sale in 2010 have just received an email from the program’s manager. Here’s an excerpt from it:

I’ve checked my records, and it looks like I personally applied (and got approved) into this particular affiliate program 2 months and 1 week ago:

Looking at the dates, it is clear that they’re giving me 4 full months to generate a sale, or I “may be removed” from the program.

One would’ve thought that after all that has been written about the ineffectiveness of affiliate manager ultimatums and get-active-or-we’ll-kick-you-out emails to affiliates, at least managers of the larger affiliate programs would’ve learned something. Alas! Apparently some still believe in motivation by threat (which never works!) and do not know what it is to genuinely care for “the little guy”.

Dear Puma affiliate program manager, read these articles. I hope they will help you rethink your strategy and become a better motivator than this.

Those who follow my blog, magazine articles, and conference presentations know how fascinated I am with the subject of motivation, especially when it comes to effective motivation of such a unique “workforce” as affiliates.

Needless to say why a post published on Econsultancy.com yesterday has immediately drawn my attention — right upon spotting its title in my Google Alerts list of notifications — “The art of affiliate incentives”.

Overall, it’s a good solid article by Owen Hewitson, a Client Strategist at Affiliate Window/Buy.at. But I have two things to add to the important subject he has chosen to tackle.

First of all, it is important to make sure that the goals (that qualify an affiliate for the prize/incentive/motivator) are achievable. Nothing is more useless than a “performance incentive” which sets unrealistic (or close to unrealistic) performance goals.

There’s a merchant on Commission Junction — with a default commission level of 6%, and an average order value (AOV) of some $650 — who has the following commission increases embedded in the structure of their affiliate program:

A simple calculation tell us that to reach $35,000 in monthly sales, you want to refer over 53 sales for the merchant’s expensive merchandise. This will give the additional 0.5% (or $175). If you send them some 77 sales in any given month, you’ll get an extra 1%. Yes, it’s gonna be $500 in extra commissions, but c’mon, 77 orders with an AOV of $650 — that’s hardly an enticing goal. It is actually very similar to the “winner-takes-all prize draws” mentioned in the “The art of affiliate incentives” article.

Secondly, Owen has surely gotten my attention when he started his “Which incentives work” section with “Rather than offering cash prizes, one of the most effective ways to incentivise affiliates is to offer them a ‘money-can’t-buy’ reward…” But when I started reading about “VIP tickets”, “adventure weekends to destinations such as Monaco and Las Vegas”, “trips to Bali, Cannes and Venice”, iPads, and laptops, I couldn’t help but shake my head in disappointment. These are still extrinsic motivators (just a bit more expensive, that’s it!) and external incentives like these always lose in comparison with those that produce a real and lasting motivation. It’s good to use them as a starting point, and a stepping stone on the way to cultivating intrinsic motivators within affiliates, but not as ultimate motivators of any sort.

More on the topic:

A speech given by Dan Pink at the RSA and later animated by Cognitive Media was uploaded to YouTube last month, and has already received close to 400,000 views, and a storm of accolades from marketing and management professionals around the world. No wonder why. Dan talks one of the most fascinating subjects in the world — human motivation. In his speech he points out that the so-popular carrot-and-stick method generally works for simple, straightforward tasks, but “when a task gets more complicated” and “requires some conceptual, creative thinking, those kind of motivators don’t work.” He doesn’t talk about it, but the fact is that monetary bonuses, which so many of us, managers, are using as the main motivators, stop being motivating when used repetitively, and you cannot motivate a worker by the same amount of bonus indefinitely (larger amounts start being expected, and at one point, the whole model stops making economic sense to the employer/manager).

Dan emphasizes that with tasks that involve purely mechanical skills, monetary (read: extrinsic) motivators work well; but when the task calls for rudimentary skills, larger rewards have actually been registered to lead to poorer performance. The experiment has been replicated in hundreds of settings, and in all contexts experimenters have seen that “higher incentives led to worse performance.”

There are 3 motivators that lead to better performance and personal satisfaction. They are:

1. Autonomy — the desire to be self-directed
2. Mastery — the urge to get better at stuff
3. Purpose — that transcendent something that really makes you race to work in the morning

Why can’t I help, but think affiliate marketing (an industry that has autonomous marketers at its very foundation!) here? All three of the above-quoted things are called intrinsic (i.e. stemming from within the individual) motivators, and they’ve been proven to create the most lasting motivation, regardless of the context.

In my opinion, this research has implications both for affiliate program managers, and for affiliates:

~ Affiliate program manages should finally understand that extrinsic motivators are NOT the only, and neither the best, way to motivate affiliates. They should look beyond the immediate monetary remuneration and, as Frederick Herzberg said, seek to “charge a person’s battery, and then recharge it, and recharge it again” (through external bonuses only), but by focusing on “intrinsic factors” which “answer people’s deep-seated need for growth and achievement” help affiliates get a generator of their own.

~ Affiliates can get good ideas from this presentation (e.g. about creating new user-driven websites in unsaturated niches).

Grab a drink, a pen and paper, and devote 10 minutes of your life to this superb presentation of “the surprising truth about what motivates us” (you won’t regret it):

Have you ever wondered if there are any other motivators available to affiliate program managers besides cash bonuses, prizes, and other extrinsic means of affiliate motivation?

There are!

It has also been proven that the more cash bonuses you give out, the more the per-bonus amount is expected to increase to create the same drive next time you decide to motivate by cash.

Super affiliates, who are also in this business for the money, are not picking affiliate programs based on the amount of an activation bonus, or even performance bonuses interwoven into the payment structure. Most of the time they have a longer term plan on how to succeed with this or that affiliate program, and their motivation comes from the challenge, the interesting work they’re getting themselves involved in, and the opportunity for further learning and advancement.

Read more in my newest article on affiliate motivation in the April 2010 issue of the FeedFront magazine, which may be read online or downloaded here.

See also the post on how the CSN Stores’ affiliate program manager uses some of the principles I’ve written about in the above-quoted article. Whether they are doing it intuitively or not, I certainly applaud the approach.

Earlier this week I have received a newsletter geared at CSN Stores’ affiliates that have generated some traffic for their affiliate program, but no sales. The opening text of the newsletter read:

Congratulations! You have been chosen as a CSN Stores Affiliate Program Rising Star. All the members of this group have been able to bring in a significant amount of traffic to our sites over the last few month. We want to help you make sure those visits lead to sales and commissions! For the next month, April 1st- May 1st, the CSN Stores Affiliate program will be offering an exclusive promotion to the members of this Rising Stars group.

If in the month of April you can convert just 10 sales you will receive an additional $150 bonus on top of your commissions!

I’ve generated 14 clicks for them (some by myself, some my friends), and not one sale. So while the “significant amount of traffic” part constitutes quite a bit of an exaggeration, I can’t help but love the “Rising Star” hyperbole. This beautiful technique, and the whole text of this affiliate newsletter, reminded me of Bronwyn Fryer’s “Moving Mountains” article in a 2003 issue of Harvard Business Review where the author wrote that to motivate others effectively managers must have “a clear, unbiased understanding of the situation at hand, deep insights into the vagaries of human nature.., the establishment of appropriate and reasonable expectations and goals, and the constructions of a balance set of… incentives.” Fryer also proposed several practical techniques to make one a better motivator. Out of the ones that she listed I thought that immediately relevant ones for affiliate program managers are:

• Start with the truth
• Appeal to greatness
• Make them proud
• Stick to your values
• Provide constant and consistent communication channel
• Build trust
• Care for the little guy
• Set different incentive levels

It seems that the CSN Stores’ affililiate program manager has hit at least half of the above nails right on the head.

Some time ago I joined an affiliate program. I do this frequently — to analyze the styles and approaches of various affiliate program managers. I am not doing this to make money on (or promote) the merchants who run these affiliate programs. However, out of hundreds of affiliate programs who have me (an “affiliate” that sends zero clicks and refers zero sales/leads) on board, this is the first one that has asked me how they can help, and did it in a very interesting way. Here’s the text that I have received in my email two days ago:

Hi Geno,

I want to touch base with you to divulge October information as well as obtain feedback. First, let me give you the numbers for October:

- Your earned $0 in October from 0 clicks
- Eight affiliates made their first sale with us last month and earned an additional $20 bonus
- Bonus payments made up over 12% of the regular commissions paid in October

For the feedback, anything and everything is welcome; from questions to criticism. My role as affiliate manager is to make you more money. If there is something I am not doing that you want me to start doing, let me know. If I am doing something you want me to stop, tell me.

Basically, give me any feedback you want. If you respond with quality feedback for me or the program by Friday, November 6th, I will give you $5 cash! I want to encourage well-thought out feedback and not one line answers just to get the cash. This is meant to help me improve the program so you can be more successful.

Here is how you can reach me:

[contact info and the rest of the message]

This came from Patrick Vesperman of MagnetStreet.com.

I always say that I am not a fan of extrinsic rewards, but there is time and place for them. This is certainly one of those cases! The only thing that I would have changed in his promo is the deadline (giving people a few more days would’ve been nice). Other than that, it’s brilliant!

No, five bucks isn’t a lot of money, but fair enough for a one-liner, right? Also, it is important to mention that the MagnetStreet’s affiliate program (no, I never promote an affiliate program without a good reason, and Patrick has certainly earned this link!) is already one of the top wedding-related affiliate programs at ShareASale. However, this program manager keeps pressing on, and believes that affiliates are not making money with his affiliate program, there is something he may be doing wrong, or isn’t doing something he should be doing. Wow. Simply exemplary. Hundreds (if not thousands) of other affiliate program managers should learn from Patrick.

Today I’ve read an good article by Nigel Nicholson in the Harvard Business Review 81 (1) of 2003. In it, the author looks into the question of motivating “problem people.” Looking at manager-employee relationship in the traditional management context, he described his recipe for working with employees that are neither showing progress, nor benefiting the organization/team. His approach is based on the observation that “problem people” cannot be effectively motivated by extrinsic methods, but it is the motivation from within that the leader/manager should aim at. This is achieved by creating circumstances in which the followers’ “inherent motivation — the natural commitment and drive that most people have — is freed and channeled toward achievement goals.” Nicholson recommends starting with a dramatic change in leader’s own mind-set: going away from “prodding or coaxing” and focusing on methods and techniques that would aim at “removing barriers” that obstruct the employee’s progress “including, quite possibly, your own demotivational management style.”

Among the common mistakes that managers make, Nicholson points out to (i) managers’ belief that “people have the same thought process as we do,” (ii) ignoring the individual aspect, and approaching all employees the same way, and (iii) setting “an impossible goal” failing to realize that we “can’t change people’s character,” as the profound change always “comes from within.” To facilitate this change, a new approach to motivation should be adapted. It should encompass (a) an understanding that every follower does have a “motivational energy”, yet (b) “this energy is often blocked in the workplace,” and (c) “removing blockages” happens when leaders abandon the technique of “pushing solutions on people,” but rather “pull solutions out of them.”

Looking at this method through the prism of affiliate program management, and my own effectiveness as an affiliate manager, I see several implications in Nicholson’s method. As mentioned before, the main peculiarity of affiliates is that they are an independent workforce. Hence, when the problem lays in the affiliate manager – which is “one of the most common blockages” in a traditional management context – affiliates do not join affiliate program managed by such affiliate manager. It is important for me as an affiliate manager to keep perfecting my communication skills, introspection and self-criticism, sincere empathy and open-mindedness, continuing to develop more personal relationships with affiliates in informal contexts. While “employee termination” is an option in Nicholson’s context, it is not an option in the affiliate marketing context. In fact, it predominantly happens vice-versa, and affiliates are the ones that “terminate” relationships with non-empathetic and irresponsive merchants, or those that believe in motivation by fear, or exercise a top-down management approach. Nicholson makes an important statement, from which his whole approach stems. He says that “all available evidence suggests that external incentives – be they pep talks, wads of cash, or even the threat of unpleasant consequences – have limited impact.” In fact, “such inducements are most frequently effective with people who are “already and running,” while “the other folks” should be approached through a highly individualized approach that aims at discovering the “motivation energy” that they already have, and directing it towards “achievable goals.” This insight is directly applicable in the area of affiliate program management.

After my previous two posts on motivating affiliates [Introduction to affiliate motivation and Intrinsic motivation as ultimate goal] I have been reading a lot about different models and frameworks, approaches and interpretations. But today’s reading from Haslam’s Psychology in Organizations: The Social Identity Approach summarized them all too beautifully for me not to blog about it today. Haslam writes that “despite the plethora of seemingly distinct theoretical approaches to motivation a unity of process” can be traced throughout all of them; and this unity “arises from the fact that the nature of work motivation is bound up” with the followers’ “sense of who they are” [italics mine]. Every manager should understand that motivation has two main dimensions: (i) the personal one, and (ii) the organizational one. Here is a chart from Haslam’s book:

I have highlighted the focus on personal identity (self as individual), commitment to career and personal advancement, and motivation by personal needs, norms and goals. This is what affiliate managers should be focused on while seeking to motivate affiliates. Affiliate marketers are highly motivated by personal advancement, and affiliate program managers should motivate by underscoring the affiliate’s personal benefit, and focusing on their individual objectives. Much tailoring should take place, but remember this dimension yourself, and communicate it to the management of your company. Countless affiliate program management mistakes stem from misunderstanding the context, and treating affiliates as employers and members of a team (when, in fact, they are predominantly teams of one). Focus on individual advancement of every affiliate, and personal needs and goals.

I was researching more on motivation in the course of the day today, and at one point while I was reading Frederick Herzberg’s article “One More Time. How Do You Motivate Employees” (Harvard Business Review, Jan. 2003) I realized that making all things go right within any given affiliate program — having a 100% affiliate-friendly website (without “leaks”, with well-converting wisely-formatted landing pages, etc), running ongoing bonus campaigns, providing performance-based commission increases, satisfying every possible creative need affiliates may have, providing a well-categorized detailed product data feed, etc, etc — has little to do with real motivation of affiliates to perform for your affiliate program. Speaking of people management, Herzberg wrote:

…things that make people satisfied and motivated on the job are different in kind from the things that make them dissatisfied. …even if managed brilliantly [environmental factors] don’t motivate anybody to work much harder or smarter. People are motivated, instead, by interesting work, challenge and increasing responsibility. These intrinsic factors answer people’s deep-seated need for growth and achievement. [bold font added by me]

In our context, ensuring that nothing is wrong with your affiliate program, and providing an overall affiliate-friendly environment is no recipe for motivation. Herzberg stresses that neither are “compensation and incentive packages” motivating enough for people. He says that a manager “can charge a person’s battery, and then recharge it, and recharge it again,” but “it is only when one has a generator of one’s own that we can talk about motivation.” [bold font - mine] And again, those normally called “super affiliates” come to mind. They do not need much of outside stimulation. They are prone to growth, learning, continuous advancement, and internal recognition.

With other types of affiliates (at least, before they are grown into super affiliates), you do want to be a “battery charger,” but even with them — do everything possible to cultivate the above quoted motivators within your affiliates, and lead them to a point where they are mainly motivated intinsically (by interesting opportunities with the affiliate campaigns you run, and growth to greater achievements).