Incentive marketing is a key promotional method in the affiliate channel, and has evolved substantially and can take a wide-range of forms.
Incentive marketing is broadly used to cover a range of marketing activities. Those activities can include:
- Loyalty & Cashback Programs. Sites like Cashrewards and Shopback give customers part or all of the commission you pay them to their users as cashback. Similarly, loyalty partners like Qantas Loyalty and Virgin Velocity offer points for purchases made through their affiliate links. This is the most dominant form of incentive marketing in the affiliate space.
- ‘Free’ Promotions. ‘Free iPod’ and similar programs. Consumers are presented with the opportunity to receive a free iPod. In order to do so, they are required to complete a long list of offers - things like complete a survey, sign up for a trial (eg Blockbuster), apply for an auto insurance quote, etc.
Toolbars and Coupon software
Toolbars and coupon software such as Honey are often used in incentive schemes. Usually presented to customers as a way to save money, these types of programs provide consumers with discounts, cash back, and sometimes even donations to charity on nearly any online shopping site. Once the user downloads the software, a toolbar appears in their browser that activates any time that consumer accesses a site for which the program has an affiliate link
This toolbar will either automatically set a cookie that tells the merchant that the affiliate drove the sale—even though the customer arrived organically—or will flash a message to the customer that a discount is available if they leave the site and return through the affiliate link.
Countering Incentivized Marketing
First and foremost, familiarise yourself with the techniques and consider their impact on your program. If you choose to work with incentive marketers, ensure that you understand exactly how they market your service and what tools they use to do so.
If the affiliate offers a toolbar or other download, familiarise yourself with the software, or reach out to other affiliate managers or Commision Factory to learn more. Online research can yield a great deal of information about the software and whether it may create problems.
Most importantly tie your key metrics back to individual affiliates. These metrics need to go deeper than just commissions paid and should track the ultimate value contributed by each affiliate. This should help identify ay long term issues before they’ve had a negative impact on your service.