Data-Driven Strategy Design for Affiliate Programs: Couponing

July 27, 2016
Kellie Hudson
Kellie Hudson
Data Driven Affiliate Marketing Blog

Couponing is typically seen as a divisive topic as well as a necessary evil within the affiliate marketing space. When marketing channel owners dig into metrics regarding coupon redemption and incremental value, consumer behavior can be surprising.

We’ve encountered sitewide coupons advertised on sitewide banners that had actual redemption rates of less than 40%. Sales driven by these codes on affiliate sites are even less likely to be incremental, creating further challenges to determine the true value of couponing. So what gives?

As affiliate programs get smarter about attribution and program managers uncover insights into the channel’s role in driving and assisting conversions, coupon strategies have been forced to evolve. Here are five critical areas in which a coupon strategy can grow into a smart, profitable way to acquire new customers and encourage conversions.

Qualitative x Quantitative Data: What About Your Product?

Take into account the type of product you sell—are you truly a consumer good or more of a novelty or non-necessity? Are you a high-ticket item or do you run a low AOV? On what level do you reasonably need to “convince” a consumer to convert? Encourage coupon affiliates to keep these brand and product details in mind when strategizing next steps and fielding opportunities for your next sale. Similar to product placement at the supermarket, merchandising your deal with complementary products that are already being promoted on these sites can also bring visibility to the product line you’re pushing.

Dangers of Over-Couponing

There can be negative effects of couponing too often through the affiliate channel. For example, repeatedly offering 25% off can adversely affect consumer mindset before they even enter the consideration phase—the perceived value of the product will be 25% less than rack.

Often, to salvage the top line during tough year over year comp weeks, you will have to discount even deeper, hurting the overall profit margins of the business. Smaller AOV’s also make year over year figures even more difficult to reach. The bottom line—discount where it is due, but constant advertisement of coupon codes will hurt the brand. Not only will there will be a perpetual struggle to get “back to rack”, you will have to sell more product to achieve the same results as years prior.

Mix Up Your Messaging Without Mixing Up Your Message

Try using price points as a lead in to grab attention, call out potential savings, or theme messaging and avoid associating your brand with words that may do more harm than good. While using words like “bargain” or “cheap” might catch attention, you are setting a pricing expectation when the visitor travels to site. If there are a very limited number of products “starting at $1.99” or “as low as $19” or these products aren’t on the landing page and are difficult to find, then there is risk of a disjointed pricing experience and a barrier to purchasing. Keep your message short and simple, and make your featured products easy to find on the landing page to avoid confusion and page bounces.

Reward Smaller Partner Sets

One challenging issue with coupon partners is the competitive nature within the partner set for organic search engine listings. I’ve seen partners slide from top producer to massive revenue loss and suffer as a performance marketer simply because their Google keyword rankings fell two or three spots for coupon keyword search results. Partners who actively promote your products to their user base should be rewarded for their efforts.

Create a separate tier for partners who passively collect last-clicks to protect ROI and distribute advertising budget to those who really dedicate time to promote your brand. Regularly sharing data insights with these active partners can also offer you a holistic look at the competitors within the ecosystem, fluctuations in your share of the market, and how well coupons are actually reaching active deal-seekers. Using anonymized partner competitor data can help design a better coupon launch day, time, messaging, and launch strategy.

Internal Attribution vs. Value in the Sale Assist

If your attribution model is solely last click or allows little visibility into channel touchpoints, attributing true value to the affiliate channel and its coupons can be difficult. One way to gauge the value of how a publisher set can either drive or assist in sales is to run a partner-only coupon and look at last-click sales revenue driven by that coupon code for each paid media channel.

If you happen to find a lot of revenue comes through other channels, you can effectively determine the level of reach and awareness that partners can bring and subsequently better quantify the value of any paid media or email newsletters that were run. This data can also create a compelling argument to run an affiliate-only promotion.

Overall, a solid coupon strategy can not only aid promotional efforts but also engage shoppers in higher areas of the funnel and keep the brand top of mind when the customer is ready to convert.

 

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