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<title>The power of no reward </title>
<p>
Are you paying an affiliate fee to your customers to recommend their friends?
</p><p>
Think again. It may backfire.
</p><p>
<h4>Compare these two scenarios:</h4>
<ol>
<li>“Hey you should check out this website. They're cool. You'll like it.”</li>
<li>“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.”</li>
</ol></p><p>
The first one sounds sincere. I'll check it out.
</p><p>
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? <strong>Now I don't trust the recommendation anymore</strong>.
</p>
<h4>Compare these two scenarios:</h4>
<ol>
<li>“Excuse me, neighbor. Can you please help me lift this desk through that door? It's stuck.”</li>
<li>“Excuse me, neighbor. Can you please help me lift this desk through that door? <strong>I'll pay you a dollar.</strong>”</li>
</ol><p>
The first one is fine. We all like to think of ourselves as helpful. And we enjoy a challenge.
</p><p>
But the second one is insulting. A dollar? 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. <strong>If my neighbor is looking to hire someone for a dollar, he can hire someone else</strong>.
</p>
<hr />
<p>
The great book “<a href="http://sivers.org/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>.
</p><p>
<strong>Social mindset</strong> is warm and fuzzy social human nature: helping friends, being a good generous person, doing what's right.
</p><p>
<strong>Market mindset</strong> is strictly business: being paid for time and effort, competition, you get what you pay for, and cost/benefit analysis.
</p><p>
<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.
</p>
<hr />
<p>
Here's an <a href="http://sivers.org/book/PredictablyIrrational">example</a> of what <em>not</em> to do:
</p><p>
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.
</p><p>
So they added a fine. $3 each time you are late to pick up your kids.
</p><p>
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>!
</p><p>
<strong>Social mindset had been replaced with market mindset</strong>. What was a decision of social guilt (“I feel bad. I'm late.”) was now a cost/benefit analysis (“It's fine. It's worth $3.”)
</p><p>
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.
</p><p>
Poor day care center. Don't be like them.
</p>
<hr />
<p>
This <a href="http://www.alfiekohn.org/managing/fbrftb.htm">great article by Alfie Kohn</a> shows that in over 20 published studies, <strong>people who expect to receive a reward do not perform as well as those who expect nothing</strong>.
</p><p>
<strong>Don't underestimate the power of no reward.</strong> Don't introduce market mindset for social things.
</p><p>
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.
</p>
<img src="http://sivers.org/images/bestthings.jpg" width="500" height="375" alt="The best things in life aren't things" />