Affiliate Marketing Strategy and Coupon Codes Leeching

Affiliate Marketing Strategy and Coupon Codes Leeching on Branded Terms

On digital world, the first topic that comes to mind when Affiliate Marketing is mentioned is new traffic/revenue potential, and the second topic that comes to mind is fraud. Or, in many cases, it’s the other way around – fraud first, then traffic/revenue.

Affiliate-Marketing-Brand-Coupon-Code-LeechingDo you have coupon codes?

Most eCommerce websites use coupon codes (or discount codes or promo codes) on their shopping cart. These are used for free shipping, price competitiveness, to build customer loyalty or in one way or the other to convert the visitor on the shopping cart. Some merchants even use Coupon Codes to track the effectiveness of marketing channels. Code ABC123 is from source X vs code XYX789 is from source Y, especially useful in offline marketing.

Do you use Affiliate Marketing?

Most eCommerce websites also use some sort of Affiliate Marketing, from which they hope to generate new traffic and revenue to their website. Not all affiliates are equal. Some are great affiliates websites, whereas others are pure leechers. Examples could be content/resources websites, blog, directories, price comparison, deal sites. and very commonly found coupon codes websites. Marketers need to find a “good” affiliates websites where as avoiding leeching websites, which would just suck away the commission.

Yes, and yes? Then, do you have a strategy to match affiliates with coupons?

Let’s start here: your goal as a eCommerce merchant and the affiliate’s goals are different.  Your goal would be get genuinely new traffic which will convert. You won’t mind paying a certain commission on such valuable traffic, which most likely happens on CPA (cost per acquisition) basis than PPC (Pay per Click) basis. On the other hand, for affiliates, their objectives would be to generate sales, hence they would be asking for higher and higher percentage off coupons, free shipping and more. The strategy part here for the merchants would be to make sure there is no cannibalization, double dipping, or outright paying commission on orders which would have generated anyhow.

Customer Persona: Discount seekers

Here is a typical customer journey:

  1. Customers, regardless of source/medium, arrive on a product page and add product(s) on shopping cart.
  2.  Following a quick price comparison, customers notice the coupon code field on the cart, and thereby know there is a possibility of a discount/offer of some sort.
    • Note, this is why, many eCommerce sites have made it very difficult to find coupon code fields on the shopping cart.
    • Others have made the coupon code box auto-populated for faster conversion as well as to avoid leeching by affiliates.
  3. Customers head to Google, and search for “Brand-name Coupon Code”
  4. Then, they click on top 2-3 affiliate sites such as RetailMeNot, Groupon, Dealplus etc
  5. This will allow customers to use coupon code, get the discount on the product they were already going to buy anyhow.
  6. This completely messes up attribution model.
    1. See below example on Nike Coupon Code. If the customer had arrived at Nike.com from Paid, Organic, email or any other means, now they are looking for promo code, there by the last touch on attribution model could be an affiliate channel.
    2. Even when there is no exact coupon code is matched, the cookie generated in this process, muddies the water allowing affiliate websites to ask for commission.
  7. The worst news, now, as the affiliate website collects commission on sales in addition to the discount offer. So from net Revenue and AOV perspective, if the sale was going to be for $100 without coupon code, now, with 20% off, sales happen at $80 and then to add salt to the injury, 18% commission is charged by the affiliate, resulting in net revenue of $65.60.

Example: How Nike could save thousands in affiliate marketing commission by little SEO work, so their own listing ranks on top with the best offer?

How-Nike-Can-Save-Tons-in-Affiliate-Marketing

How Nike can save a tons of payment in Affiliate Marketing commission?

 

Goal and Target Audience

Whole idea in the scenario above is to avoid direct leeching by affiliates by charging commission on sales bound to happen.  Target audience, in this case, would be the customers who would need to have discounts, which is OK for eCommerce merchants to provide. Customers with this persona is extremely likely to look for discounts exactly before online sales takes place.

Should the Coupon Code page be promoted?
Internally,  the only link we would want to put is on the footer of website, so it helps to rank on Google. Here the idea is to just the minimum amount of marketing, so it’s ranking organically in Google/Bing. Generally speaking, there is no need to promote internal coupon codes, unless we need last minute marketing ideas (e.g. say end-of-months) to drive additional sales. Otherwise, let customers do some digging and find it out themselves. And trust me, they will.

 Process to avoid leeching of affiliates into your “brand coupon code” searches

  1. Build the coupon code page with special discount codes and track-able phone number
  2. Optimize it so the page beats all the existing affiliates pages on Google for “Brand-name Coupon Code(s)”, “Brand-name Discount Code(s)”, “Brand-name Keycodes” etc.
  3. When a “savvy” customer searches for a discount code, they use merchant’s own special discount code instead of affiliate code (so, save your best offer here)
  4. For rest of the customers, let them pay the full amount (hence no need to promote coupon page a whole lot, as it’s organically found)
  5. Bonus: Make sure your own page has the best possible offer than your affiliates.

Example below shows, result for “Emedco Coupon Code”, and note how how brand website is showing up on top

Affiliate-Marketing-Brand-On-Top

Example of how brand name is showing up on top with a strong offer for customers.

Results / Impact

  1. Customers still get the discount however eCommerce merchants will save a big chunk on leeching affiliates commission.
  2. Measure the revenue based upon discount code tracking from your CRM
  3. Force affiliate to do the hard work and find customers on their own, rather than leeching on our brand customers.

Longer Term Solution

Above solution is short term and will begin to save significant chunk in commission right away. For some affiliate heavy businesses, where 75%-80% of traffic is coming from affiliates, this may translate to thousands of dollars savings on daily basis. [Name of business is purposely hidden here, however, I have done the math. :) ] However, in longer term, a better affiliate marketing strategy needs to be sought, such as not relying on cookie, auto-completing coupon code based upon source/referrer or even go 100% coupon code free affiliate marketing. In an ideal circumstances, eCommerce merchants should do a through background check on affiliates before accepting them into the program by asking questions such as how do they generate traffic, a.k.a. avoid poor quality coupon code page websites.

Happy Affiliate Marketing! Now, at least we have one less thing to worry about. And guess what, someone may even link back to your newly built coupon code page earning you more new traffic through referral, as well as some link juice for Search Engine Optimization.

 

 

About Ujjwal Bhattarai

Ujjwal is an engineer by education, a programmer by hobby, and an internet marketer by choice. Other than 1 minute chess, and biking, his passion includes SEO, SEM/PPC, CRO, and Web Development. As a lifelong student of Internet Development, he is hopelessly addicted to Internet, and sincerely believes after fire, wheel, and decimal point, internet is the fourth most important invention in the human history. Catch up with him on Twitter at @uj2wal or at his Google+ .

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