Today I received an email from Buy.at about changes to the AA programme after their merger with Saga.

The change now forbids any sites offering cashback on AA Programmes.
Now, here’s the interesting bit:

Loyalty partners are still permitted; sites offering points or air-miles are not included in the removal.

“You are still welcome to promote The AA programmes on your site but must not offer any cashback as of Thursday 18th October ”

and then…

“Loyalty partners are still permitted; sites offering points or air-miles are not included in the removal.”

So what constitutes a cashback site? let’s look at a few:

Greasypalm - awards it’s members with cas0h, simple enough

iPoints - awards it’s members with points, which you can swop for products or vouchers

Nectar - Awards its members with points, you can exchange them on the site for products.
However, if you go into Sainsburys you can get cash off your shopping bill. You never actually see hard coin though.
Vpoints - Awards its members with points. The member has a choice of vouchers or cash. Whether it’s a cashback site depends on the member I suppose.
MutualPoints - Awards its members with points, but you can only exchange for them with cash. Hmmm, is this a points site or a cashback site?

I think what this message really means is “we want to work with Nectar & Airmiles because they have huge member bases that can give us more reach, however, we don’t like the look of Greasypalm or Quidco so out you go.”

Behind all the language, these sites can all be put under one name - incentive sites. Any site that offers a reward for shopping through them are essentially filling the same customer desire - something for nothing. My feeling is that this decision has nothing to do with the reward mechanisms, and everything to do with branding.

If that’s the case, why not be honest about it.

“AA have decided to review their affiliate strategy and decided that we only want to work with partners who give us additional advertising reach, free of charge. Having inspected your site, we think it’s a bit grubby so we’re going to drop you like a stone before the new Marketing Director gets appointed from the branding team and asks us what we’ve been doing for the last few years.”

Sometimes decision like this have to be made, and sometimes they are the right ones, made to undo bad decisions made in the past, but there are a few pointers to make sure you aren’t throwing out the baby with the bathwater and killing off potential affiliates who could make the changes you’d like them to.

1) Take time to understand the decision and discuss with all the individuals who have been affected. that includes your affiliates, your agencies, your network, your brand teams. Consider bringing in outside advice from someone who’s own income won’t be affected by the change.

2) Be honest about the changes. If you say points are OK, but you really mean brand is important, you may just find a slew of points sites you dislike popping up instead.

3) Give adequate notice. “By Thursday 18th” when you are already halfway through Thursday 18th, is just not acceptable. A full week’s notice is enough to give your full time and part time affiliates time to change. A month would be better. A day, or a weekend is not.

As to the decision itself, and whether it is a good one…

Cashback sites are a simple enough proposition, AA pay £70 commission on a motor insurance policy, the cashback site splits that commission with the member.

The amount of commission given back varies enormously. Most sites give away 50% of their commission. Some new players like Quidco pay back 100% but charge a membership fee for the site.

What you think of the model depends largely on personal opinion. Some think it just cannibalises sales you “would have made anyway” (don’t you just love that phrase). Others see it as extra value that is given to the consumer that can encourage them to choose one brand over another.

Both are true, the question is does one outweigh the other? Having worked on both sides of the fence I’ve seen how the big sites can shift sales away from arrogant sector leaders. In a very price competitive market like insurance I’ve no doubt that this is the case.

Price means cash, not kettles and coupons, so I think AA may have made exactly the wrong decision.