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<title>The power of no reward | Derek Sivers</title>
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<h1><a href="/" title="Derek Sivers">Derek Sivers</a></h1>
<div class="blogparent"><a href="/blog">Articles</a>:</div>
<h1>The power of no reward</h1>
Are you paying an affiliate fee to your customers to recommend their friends?
It may backfire.
Compare these two scenarios:
“Hey you should check out this website. They’re cool. You’ll like it.”
“Hey you should check out this website. They’re cool. You’ll like it. If you sign up, make sure to <strong>mention my affiliate code</strong> 43625.”
The first one sounds sincere.
I’ll check it out.
But the second one sounds suspicious.
Does my friend <em>really</em> think I’ll like it, or is he only telling me to profit?
Now I don’t trust the recommendation anymore.
Compare these two scenarios:
“Excuse me, neighbor. Can you please help me lift this desk through that door? It’s stuck.”
“Excuse me, neighbor. Can you please help me lift this desk through that door? <strong>I’ll pay you a dollar.</strong>”
The first one is fine.
We all like to think of ourselves as helpful.
And we enjoy a challenge.
But the second one is insulting.
I’m your neighbor!
You don’t need to pay me.
But the amount you offered is even more insulting than nothing.
I’m going to say no.
If my neighbor is looking to hire someone for a dollar, he can hire someone else.
The great book “<a href="/book/PredictablyIrrational">Predictably Irrational</a>” says social psychology tests have shown <strong>we have two different sets of rules: social mindset and market mindset</strong>.
<strong>Social mindset</strong> is warm and fuzzy social human nature: helping friends, being a good generous person, doing what’s right.
<strong>Market mindset</strong> is strictly business: being paid for time and effort, competition, you get what you pay for, and cost/benefit analysis.
<strong>Introducing money into a social relationship switches it to market mindset,</strong> changing the entire relationship, making all the warm-and-fuzzy go away.
Here’s an <a href="/book/PredictablyIrrational">example</a> of what <em>not</em> to do:
A day care center had a problem with parents picking up the kids late.
The teachers were often waiting an extra hour with the kids for tardy parents to show up.
So they added a fine.
$3 each time you are late to pick up your kids.
So now that parents were paying for their tardiness, they used market mindset to decide whether $3 was worth it to be late, and tardiness actually <strong>increased</strong>!
Social mindset had been replaced with market mindset.
What was a decision of social guilt (“I feel bad. I’m late.”) was now a cost/benefit analysis (“I’ll work a little longer, and pay the $3.”)
Realizing their mistake, the day care <strong>removed the fine</strong> a few weeks later, <strong>tardiness increased again</strong>, now that social mindset and market mindset had both been removed.
Poor day care center.
Don’t be like them.
In over <a href="http://www.alfiekohn.org/article/best-results-forget-bonus/">20 published studies</a>, <strong>people who expect to receive a reward do not perform as well as those who expect nothing</strong>.
Don’t underestimate the power of no reward.
Don’t introduce market mindset for social things.
Next time you’re thinking of rewarding your friends or customers with cash, think how offensive it would be to offer to pay for sex.
<img src="/images/bestthings.jpg" alt="The best things in life aren’t things" />
© 2009 <a href="https://sive.rs/">Derek Sivers</a>.
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