By Elisha ‘Lish’ Carroll
So you have been slaving away creating a new product – you’ve tested, you’ve tweaked, you’ve obsessed, and it’s time to send your baby out into the world. It’s time for a launch! Some people love them and some people think it’s a necessary evil, but the best way to garner affiliate attention is to have a contest and give your affiliates the chance to win some awesome prizes.
You think you have covered all of your bases, your product is converting like hotcakes and you want to bring in the affiliates…how do you pick prizes that will bring out the competitive nature of affiliates AND that will fit into your budget? Here are some things to consider:
- Can you offer an experience? For example, do you throw an event or mastermind to which you can give away seats? People love experience prizes and even though they are incredibly high value, they can be very low cost for you.
- Do you want to offer items or cash? Offering actual items rather than cash can be a ton of fun, especially if you can find ways to tie it into a theme with your contest. New electronics and gadgets go over really well BUT people tend to scoop up the newest tech as soon as it comes out. If you offer prizes other than cash be prepared for people to request the monetary value of the prize.
- Do you want to offer incentives other than for the top affiliates? For example you can always offer a higher commission tier for people that hit a certain amount of sales. You can limit the higher commission tiers to the contest period, to be paid as a bonus at the end of the contest.
- Every good contest will have all types of affiliates promoting, and the big guys always win. It’s worth considering the smaller affiliates, since every sale counts, and if they become one of the big guys in the future, they will remember their good experience with you.
- How many prizes do you want to offer? Top 3? Top 5? Top 10? This brings us to one of the most important, and often overlooked questions when it comes to setting up a contest-What is the budget? Should there be a sales minimum for people to qualify for the prize?
There is obviously a lot of thought and planning that goes into structuring a contest and choosing the appropriate prizes. Regardless if this is a launch for your brand new product, or if you are having a contest to thank your affiliates for their support, or re-energizing their interest in your product – offering
prizes and not following through on them can easily kill your relationship with your affiliates. It’s completely counterproductive.
This is where figuring out your budget and deciding whether or not to set prize requirements comes in. A lot of people balk at setting sales minimums for 2 reasons.
First, no one wants to consider that their launch or contest won’t rake in a ton of sales – but it’s a possibility, and honestly it’s not the end of the universe. If for some reason it doesn’t work out to your expectation, take what you learned from the affiliates that promoted, use it, tweak EVERYTHING and try again.
If you set sales minimums you will have that opportunity, without the black cloud of trying to find the funds to provide prizes for an affiliate that
only made a handful of sales out of the not-so-huge profit margin of your not-quite-as-amazing-as-planned contest hanging over your head.
No one wants to think their shiny new product won’t perform, but this isn’t planning for failure. This is simply making sure that this sometimes-fickle industry doesn’t shut you down before you really get started. You can come back from low conversions if you can show your affiliates what you have done to make them better. You can’t come back from promising an affiliate an awesome prize and then not coming through when they expect it. You don’t want to burn your affiliates and this is a really good way to do so.
The second reason people choose not to set sales limits is that they don’t want to look cheap, or like they don’t have faith in their product. It makes sense, BUT nothing looks cheaper than offering a prize and then reneging because you don’t have the means to provide. That causes affiliates to lose faith in you.
So how do you choose the amount you should offer in prizes and the appropriate sales minimums? The minimums need to be reachable but they also need to be a bit of a stretch, and in the end the whole point is that the money those sales bring in should merit the prize you are going to be handing out. It doesn’t hurt to pay attention to other launches or contests in your niche to see what other people are doing. If you know how many sales you can expect from your big affiliates that will definitely help-you can use that as a baseline and set the minimums to be a slight stretch beyond that. Once you determine the prizes you can figure out the minimum.
Here is a quick equation you can use to find sales minimums that you can afford:
- First determine how much YOU make per sale. This is after commissions and any other fees you may pay. To make this easy we will just say you make $5.00/sale
- Determine how much you will be paying out for the prize. Let’s say you are giving out 3 prizes, the top one being $2000 cash.
- For an affiliate to bring in enough sales to cover the prize you are sending out, they would need to make 400 sales ($2000/$5) to win the top prize.
- Keep in mind that you should have a lot of affiliates promoting, so if you feel that your sales minimums are a little high by requiring that each affiliate make enough sales to cover their prize, you will definitely be making up some of the difference from the rest of the contest.
- Another way to look at it, is to take the cost of all the prizes you are offering. Just for this example, say you are offering 3 places. 1st place to receive $2000, 2nd to receive $1000 and 3rd to receive $500.Your total is $3500. You make $5 a sale. Therefore you have to make at least 700 sales in the entire contest to break even on prizes ($3500/$5). If you require your affiliates to make 150 sales to qualify for a prize, your top 3 will at the least, cover 450 sales. That’s over half of what you need to break even. The rest of the affiliates that are promoting would only have to cover 250 sales collectively, for you to break even on your prize money.
Contests are an amazing way to get people engaged. Keep up the communication and fire up affiliates’ competitive spirit to maximize your success. Just don’t forget that it takes some serious planning, and even some math to make sure that your super fun, amazing contest benefits you and your affiliates.