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:
I think one of the claim people making bonuses hat are a little obscure make is that motivating top affiliates who already have everything they need financially is hard.
Th reason for the toys is because hey are toys and gadgets… whoever is marketing is looking on it as a bit of a game with his competition, and there is a lot of money at stake.
The prize is a symbol, and also a nice gift that they maybe wouldn’t have bough otherwise.
Some of the prizes I have seen in the past have been extremely well thought out – lower end ones being useful, higher end the kind of thing that is very much an extravegant status symbol.
With cash incentives that aren’t even part of some kind of competition, the obvious question is “well why don’t you pay me more in the first place?”
I don’t look on tiered pricing as a bonus, because the accounting is different.
I appreciate you posting your thoughts on the topic, Andy. You’re right, and this is exactly what prizes should be — symbols of appreciation. True motivation should (as it is with super affiliates that you have mentioned) lie within.