A new client has asked us what they can do to improve performance of their affiliates. Having analyzed their affiliate base, we’ve found out that the majority of their affiliates are inactive (isn’t this always the case?) and out of those that are actively sending traffic only about 9% yield actual conversions. So, we have proposed (a) activation bonuses for putting up (affiliate) links/banners, and (b) performance bonuses for reaching certain monthly thresholds (e.g.: generate 5 sales, get $100 on top of your regular PPL bounty. The advertiser suggested:
We can have competitions that the affiliate that brings us the highest number of sales in a specific period of time will get a bonus of $500.
Competitions are a great idea. However, for extrinsic motivators to work for the maximum benefit of your affiliate program you want them to be achievable regardless of the level at which this or that affiliate is currently performing. In other words, you want your prize to motivate all affiliates in the program (of course, differently on different levels), and not only those who are already performing well. To make this possible, I always recommend structuring performance-based “competitions” in such a way that every affiliate either (a) competes against (him)/(her)self, or, at least (b) within a reachable range.
Céline Dion is known for saying:
I’m not in competition with anybody but myself. My goal is to beat my last performance.
This is exactly what you want them (your affiliates) to do: “beat [their] last performance” — each on their own level. For some it will mean going from 2 sales a month to 4, for others — from $8,000 in referred orders to $20,000.
One-winner contests may do well, but they will only motivate your higher performers. I say: motivate all. After all, motivating “people to their highest levels of potential” happens when we present them “with opportunities to succeed” [more here]. Why limit the number of those who will chase the opportunity?