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Need some affordable reward ideasViews: 1113
Oct 10, 2008 2:04 amNeed some affordable reward ideas#

Dexter Black
Hi everyone!

I need your help in suggesting some "reward" idea's to my downline. I'd like to reward anyone in my downline that gets the most in their downline for the week, but am having a hard time thinking up a good affordable reward.

Any ideas?



Private Reply to Dexter Black

Oct 10, 2008 2:20 pmre: Need some affordable reward ideas#

Kurt Schweitzer
You're going to have to define "affordable".

What's your average customer lifetime value?

The lifetime value is defined as the amount of money (profit) you make from a customer over the entire period of your relationship with him/her, from the time they first become a customer of yours to the time they stop buying from you.

As an example, suppose your average customer purchases $1,000 a year from you for five years, and your margin is 40%. In this case the average customer lifetime value is 40% X $1,000 X 5 years = $2,000.

If you spend more than $2,000 to acquire a customer in this case, you've spent the entire profit you'd expect to make from this customer.

(If you want to get really sophisticated you can do a Present Value calculation to determine what that lifetime value is worth in today's dollars. I have a spreadsheet that does that, but it's usually not necessary. Just figure you don't want to spend more than a few percent of that LTV to acquire the customer.)

In your case, you need to figure out the lifetime value of someone being added to your downline's downline. Use that to determine an upper limit to "affordable" for your reward.

Next, you need to determine what will motivate your downline.

One of the companies that supplies the scooters I sell is offering a trip to Jamaica to its top sellers. To be on that trip I need to sell at least 300 of their scooters in a year. That translates to over $500,000 in sales (at the wholesale cost). Even a $5,000 "all expense paid" trip is less than 1% of their sales.

Will this motivate their dealers? Sure, if only because of bragging rights.

Similar motivation might be a trophy or a plaque, or even a name etched on a plaque kept at "headquarters".

Sometimes just the recognition is enough.

Kurt Schweitzer
Urban Village Scooters

Private Reply to Kurt Schweitzer

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